Jurisdiction in the international sale of movable property.
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Often the parties, who enter into an international contract of sale of movable goods, omit for various reasons to decide and define which court is competent to decide on a possible dispute concerning the contract itself.
In the absence of such a choice, it is necessary to identify the parameters dictated by the Regulation 44/2001. The same provides that:
- the court where the defendant has its residence is competent to decide (Art. 2.1);
- "a person domiciled in the territory of a Member State may be sued in another Member State" and specifically, in the case of the sale of goods, "the place, situated in a Member State, where the goods were delivered or should have been delivered under the contract" (Art. 5.1(b)).
E.g. An Italian company sells goods to a Swedish company. The parties agree that the goods are to be delivered to a dealer based in Spain. The Swedish company delivers the goods on time, but the Swedish company fails to perform.
The Swedish company wants to take legal action and turned to a lawyer for clarification.
Ex .art 2,1 reg. 44/2001 in this case (in the absence of choice of the parties) the competent jurisdiction is that of the defendant, i.e. the Swedish Jurisdiction.
In any case, theArticle 5.1(b) provides as a special forum, in the alternative, the court of the place where the goods were delivered or should have been delivered (Spain).
Therefore, the Italian seller (to his surprise) will have no right of action in Italy to demand payment for his goods.
It is important to emphasise that according to a United Sections of the Supreme Courtthis principle is also applicable where the seller intends to sue for the mere payment of the consideration.
On this point, the Supreme Court stated that 'on the subject of the international sale of goods, Article 5(1)(b) of the EC Regulation No. 44/2001 of 22 December 2000, is to be interpreted as meaning that, in contracts of sale, the obligation relied on in the action is to be understood as meaning not the obligation relied on by the plaintiff but the obligation characterising the contract and, therefore, in contracts for the sale of goods, that of delivery of the goods; Therefore, even in the case of an action relating to the mere payment of the consideration, the place to be considered, for the purposes of jurisdiction, is the place of delivery of the goods, which, if not established in the contract, will have to be identified with reference to the principles already affirmed by the ECJ, the place being determined according to the conflict rules of the court seised."[1]
ABSTRACT
in the absence of choice it is competent to adjudicate also on questions concerning the payment of consideration:
- the court where the defendant has his residence (Art. 2. reg. 44/2001)
- the court where the goods were to be delivered (Art. 5 reg. 44/2001)
- even in the case of an action relating to the mere payment of consideration, the place to be considered, for the purposes of jurisdiction, is the place of delivery of the goods
[1] Civil Cassation 2009 No. 3059 Giust. civ. Mass. 2009, 3, 479
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Choice or non-choice of applicable law
[:en]One of the first steps in drafting an international contract is choice of applicable law. Only after such an assessment can a contract be correctly drafted, as only in this way can the parties draft a contract on the basis of the normative dictates of the chosen legal system.
This element is often 'snubbed' or put in second place.
plan by the uninitiated, believing this to be a mere formality.
Usually, parties wishing to start a collaboration in the international sphere insert into a contract what they usually insert into national contracts, sometimes using contracts they have already used to regulate national relations.
In reality, a lack of choice can lead to unpleasant surprises on the part of one or more contractors.
Case 1
For ease of understanding, it is considered necessary to give two classic examples of problems related precisely to a failure to choose the applicable law.
An Italian principal enters into an agency contract with a French promoter. The parties do not choose the applicable law, as they consider it to be entirely superfluous. After an employment relationship of four years, the Italian principal stops production. The French agent therefore requests an indemnity equal to two years' commissions, based on the rules of French law. In this case, in the absence of choice, the agent's law, i.e. French law, applies. The principal, following a discussion with his lawyer, realises that under Italian law the severance payment is much lower (ex Article 1751 of the Civil Code "the amount of the allowance may not exceed a figure equivalent to an annual allowance...) .
Case 2
An Italian company enters into a contract for the supply of goods with an American company. Nothing is specified in the contract as to the applicable law. In addition, a penalty clause is stipulated that obliges the American seller to pay a penalty of € 10,000.00 in case of delay in delivery of the goods. The goods are shipped more than a month late and yet the American company does not want to fulfil the penalty payment. The company turns to a lawyer to ask for clarification of the coercive methods of payment. To the client's surprise, the lawyer explains to him that the situation varies greatly depending on the applicable law. In fact, the penalty clause is valid unless the court reduces the amount if it is manifestly excessive (Article 1384 of the Civil Code.). In contrast, American law does not provide for the possibility of stipulating penalties (penalty), but only forms of lump-sum fixing of damages (liquidated damages).
One of the first steps in drafting an international contract is choice of applicable law. Only after such an assessment can a contract be correctly drafted, as only in this way can the parties draft a contract on the basis of the normative dictates of the chosen legal system.
This element is often 'snubbed' or put in second place.
plan by the uninitiated, believing this to be a mere formality.
Usually, parties wishing to start a collaboration in the international sphere insert into a contract what they usually insert into national contracts, sometimes using contracts they have already used to regulate national relations.
In reality, a lack of choice can lead to unpleasant surprises on the part of one or more contractors.
Case 1
For ease of understanding, it is considered necessary to give two classic examples of problems related precisely to a failure to choose the applicable law.
An Italian principal enters into an agency contract with a French promoter. The parties do not choose the applicable law, as they consider it to be entirely superfluous. Following a four-year employment relationship, the Italian principal stops production. The French agent therefore requests an indemnity equal to two years of commissions, based on the rules of French law. In this case, in the absence of choice, the agent's law, i.e. French law, applies. The proposer, following a discussion with his lawyer, realises that under Italian law the severance payment is much lower (ex Article 1751 of the Civil Code "the amount of the allowance may not exceed a figure equivalent to an annual allowance...) .
Case 2
An Italian company enters into a contract for the supply of goods with an American company. Nothing is specified in the contract as to the applicable law. In addition, a penalty clause is stipulated that obliges the American seller to pay a penalty of € 10,000.00 in case of delay in delivery of the goods. The goods are shipped more than a month late and yet the American company does not want to fulfil the penalty payment. The company turns to a lawyer to ask for clarification of the coercive methods of payment. To the client's surprise, the lawyer explains to him that the situation varies greatly depending on the applicable law. In fact, the penalty clause is valid unless the court reduces the amount if it is manifestly excessive (Article 1384 of the Civil Code.). In contrast, American law does not provide for the possibility of stipulating penalties (penalty), but only forms of lump-sum fixing of damages (liquidated damages).
[:en]One of the first steps in drafting an international contract is choice of applicable law. Only after such an assessment can a contract be correctly drafted, as only in this way can the parties draft a contract on the basis of the normative dictates of the chosen legal system.
This element is often 'snubbed' or put in second place.
plan by the uninitiated, believing this to be a mere formality.
Usually, parties wishing to start a collaboration in the international sphere insert into a contract what they usually insert into national contracts, sometimes using contracts they have already used to regulate national relations.
In reality, a lack of choice can lead to unpleasant surprises on the part of one or more contractors.
Case 1
For ease of understanding, it is considered necessary to give two classic examples of problems related precisely to a failure to choose the applicable law.
An Italian principal enters into an agency contract with a French promoter. The parties do not choose the applicable law, as they consider it to be entirely superfluous. Following a four-year employment relationship, the Italian principal stops production. The French agent therefore requests an indemnity equal to two years of commissions, based on the rules of French law. In this case, in the absence of choice, the agent's law, i.e. French law, applies. The proposer, following a discussion with his lawyer, realises that under Italian law the severance payment is much lower (ex Article 1751 of the Civil Code "the amount of the allowance may not exceed a figure equivalent to an annual allowance...) .
Case 2
An Italian company enters into a contract for the supply of goods with an American company. Nothing is specified in the contract as to the applicable law. In addition, a penalty clause is stipulated that obliges the American seller to pay a penalty of € 10,000.00 in case of delay in delivery of the goods. The goods are shipped more than a month late and yet the American company does not want to fulfil the penalty payment. The company turns to a lawyer to ask for clarification of the coercive methods of payment. To the client's surprise, the lawyer explains to him that the situation varies greatly depending on the applicable law. In fact, the penalty clause is valid unless the court reduces the amount if it is manifestly excessive (Article 1384 of the Civil Code.). In contrast, American law does not provide for the possibility of stipulating penalties (penalty), but only forms of lump-sum fixing of damages (liquidated damages).
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The legal nature of the associated firm in Italy.
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It is now well known that associated law firms are, in fact, without their own legal personalityfalling, according to case law, "toWithin those phenomena of aggregation of interests to which the law attributes the ability to act as autonomous centres of imputation of relations legal,munites of legal representation in accordance with the rules laid down in Article 36 et seq. of the Civil Code."[1]
In bankruptcythis characteristic is highly relevant. In fact, according to a constant orientation of the Supreme Court of Cassation, the associated studios have legal representation, do not claim any privileges when it comes to admission to the liabilities in bankruptcy. For the Supreme Court, the firm is not, in fact, assimilated to the individual subject favoured by the'Article 2751 bis n. 2., this right being insusceptible of analogical extension.
A possible solution to this problem would be the assignment of the claim arising out of the services rendered personally by the individual lawyer to the law firm. This condition, however, must in any event be attached and proven, since it cannot be considered, in the abstract, as a legal or natural effect of the lawyer's participation in the firm, an autonomous centre of interests.[2]
ABSTRACT
the associated Italian firm:
- is a phenomenon of aggregation of interests without legal personality, but with legal representation;
- in bankruptcy does not enjoy the privilege of Article 2751a(2)
- an assignment of the claim arising out of services rendered personally by the individual lawyer is still possible
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The Rome I Regulation and the applicable law.
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If the parties do not identify the law to which the contractual relationship is subjectthe linking criteria provided for in Article 4 of the Rome I Regulation (593/2008)
Specifically theArticle 4.1 unequivocally identifies which law is to be applied to a series of contracts where the parties have not made the choice (sale, provision of services, franchising, distribution). It reads, in fact, that:
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a contract for the sale of goods is governed by the law of the country in which the seller has his habitual residence;
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the contract for the provision of services is governed by the law of the country in which the service provider has his habitual residence;
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a contract having as its object a right in rem in immovable property or a lease of immovable property is governed by the law of the country in which the property is situated;
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Notwithstanding (c), the letting of a property concluded for temporary private use for a period of not more than six consecutive months shall be governed by the law of the country in which the owner has his habitual residence, provided that the tenant is a natural person and has his habitual residence in the same country;
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The franchise contract is governed by the law of the country in which the franchisee has its habitual residence;
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the distribution contract is governed by the law of the country in which the distributor has his habitual residence;
LArticle 4.2 of the RegulationIt further provides that if the contract does not fall within the categories set forth in Art. 4.1 it shall be governed by the law of the country in which the party to be performed under the contract has its habitual residence;
L'Article 4.3Finally, it provides that if none of these criteria makes it possible to determine the applicable law, the contract shall be governed by the law of the country with which it is most closely connected.
ABSTRACT
In case of no choice check:
- whether the contract falls within the categories covered by Art. 4(1) of the Rome I Regulation
- otherwise, the law in which the party is to perform the characteristic performance applies
- finally, if none of the above criteria allows the determination of the applicable law, the contract is the law of the country with which it is most closely connected
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Jurisdiction under EC Reg. 44/2001.
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A problem that often arises in connection with contracts concluded by parties with residence or seat in different states concerns the choice of jurisdiction, i.e. figuring out which court is called upon to rule when the parties have not explicitly made that choice.
In civil and commercial matters between an Italian subject and a foreigner, one must firstly
distinguish, relations with counterparties in the European area and counterparties in countries outside that area.
- In the first case, the European legislation governed by the Regulation 44/2001 (Lugano Convention)
- In the second case, on the other hand, the general regime of the Act No. 218/1995 on Private International Lawunless the matter is directly regulated by bilateral conventions of the countries in question.
Analysing briefly the general discipline provided for by the European regulation, it is noted that it is provided for in theArticle 2.1 the general rule of jurisdiction of the defendant's court.
Based on this principle, therefore, in the absence of choice, if one of the parties is domiciled in an EU state, it must be sued in the court of that state.
(e.g. Italian plaintiff, Spanish defendant, but domiciled in Belgium, the contracting court is Belgian)
However, Regulation 44/2001 provides in Articles 5, 6 and 22 of the exemptions to this general principle or:
- Articles 5 and 6 reg. allow in a number of cases to sue a person before courts other than those of the domicile;
- Article 22 provides for a number of exclusive, i.e. non-derogable, forums, irrespective of the domicile of the defendant, such as rights in rem in immovable property, validity, nullity and dissolution of companies, registration and validity of patents and designs;
- the parties are nevertheless free to choose an exclusive forum by means of a clause extending jurisdiction (Art. 23).
ABSTRACT
In the absence of choice and if the relationship is between parties in the European judicial area, which State's courts are called upon to decide a dispute?
- Need to look at reg. 44/2001
- Article 2.1 of Regulation 44/2001 regulates the general principle of the jurisdiction of the defendant's court
- Articles 5 and 6 reg. allow in a number of cases to sue a person before courts other than those of domicile
- Article 22 provides for a series of exclusive, i.e. non-derogable, forums, regardless of the domicile of the defendant
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