Source: http://conflictoflaws.net/2007/ecj-judgment-on-art-5-1-b-brussels-i-regulation-color-drack/
Timestamp: 2019-04-19 01:22:40+00:00

Document:
Today, the European Court of Justice pronounced its judgment in Case C-386/05 (Color Drack GmbH v LEXX International Vertriebs GmbH).
According to the Court, the first indent of Art. 5 (1) (b) Brussels I Regulation is applicable in cases where there are several places of delivery within a single Member State.
The case concerns a reference for a preliminary ruling from the Austrian Supreme Court (Oberste Gerichtshof) and relates for the first time to the interpretation of Art. 5 (1) Brussels Regulation.
The Court had to deal with the question whether the first indent of Art. 5 (1) (b) Brussels I Regulation, which provides that in disputes relating to international contracts for the sale of goods the plaintiff may sue the defendant in the court of the place where, under the contract, the goods were delivered or should have been delivered, is applicable – and if yes, in which matter – if the action relates to goods delivered in several places in a Member State.
The background of the case is as follows: A company the registered office of which is in Austria (Color Drack GmbH) purchased sunglasses from a company (LEXX International Vertriebs GmbH) the registered office of which is in Germany. Color Drack GmbH paid the sunglasses in full, but had LEXX International Vertriebs GmbH to deliver them directly to its customers in different places in Austria. Subsequently, Color Drack GmbH returned the unsold sunglasses to LEXX International Vertriebs GmbH and asked to repay the respective sum. Since LEXX International Vertriebs GmbH did not pay, Color Drack GmbH brought a payment action against LEXX International Vertriebs GmbH at the District Court in St. Johann (Austria), in the jurisdiction of which its registered office is situated.
While the District Court ruled that it had jurisdiction under Art. 5 (1) (b) Brussels I, LEXX International Vertriebs GmbH appealed and the Regional Court Salzburg set aside the judgment due to the fact that the District Court had lacked territorial jurisdiction. The Regional Court argued, Art. 5 (1) (b) Brussels I Regulation provided for a single place of connection for all claims arising from a sales contract. However, the autonomous determination of such a place was not possible where – as in the present case – the goods had been delivered to several customers located in different places in Austria. Consequently, jurisdiction could not be based on Art. 5 (1) (b) Brussels I Regulation, but rather – pursuant to Art. 5 (1) (c) – on Art. 5 (1) (a) Brussels I Regulation. According to this provision, Color Drack GmbH should have brought the proceedings in Nuremberg (Germany) – and not in Austria.
Is Article 5 (1) (b) of Council Regulation (EC) No 44/2001 […] to be interpreted as meaning that a seller of goods domiciled in one Member State who, as agreed, has delivered the goods to the purchaser, domiciled in another Member State, at various places within that other Member State, can be sued by the purchaser regarding a claim under the contract relating to all the (part) deliveries – if need be, at the plaintiff’s choice – before the court of one of those places (of performance)?
Where there are several places of delivery, Article 5(1)(b) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters is applicable if, as agreed between the parties, the goods have been delivered in different places in a single Member State.
If the action relates to all the deliveries, it is for the law of the Member State in which the goods have been delivered to determine whether the plaintiff may sue the defendant in the court of the place of delivery of his choice or only in the court of one of those places. If the law of that State does not lay down rules on special jurisdiction, the plaintiff may sue the defendant in the court of the place of delivery of his choice.
The first indent of Article 5(1)(b) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as applying where there are several places of delivery within a single Member State. In such a case, the court having jurisdiction to hear all the actions based on the contract for the sale of goods is that in the area of the principal place of delivery, which must be determined on the basis of economic criteria. In the absence of determining factors for establishing the principal place of delivery, the plaintiff may sue the defendant in the court for the place of delivery of its choice.
Thus, by establishing a criterion for determining “place of delivery” in cases where there are several places of delivery, the Court’s reasoning differs from the Advocate General’s Opinion who did not establish criteria for the determination of the competent court, but held that this was a matter to be determined according to national procedural law. However, the Court and the Advocate General agree insofar as the plaintiff may sue the defendant in the court of the place of delivery of its choice in the absence of a determinable court.
See also our older post on the Advocate General’s Opinion which can be found here.

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