Sale of assets, jurisdiction and Incoterms (Wx-Works, FCA, CTP and CIF).
How the inclusion of an Inconterms clause (ex-works, FCA, CIF) may affect jurisdiction in the case of the sale of movable goods? A brief overview of European legislation and developments in Italian and European case law.
1. Jurisdiction, Sale and Incoterms: A Brief Overview of European Legislation
In the case of the sale of goods within Europe, the parties may agree in advance which courts will have jurisdiction to decide on any disputes that may arise between them. This principle of forum-shopping is governed by Article 25 of the Regulation EU 1215/2012,[1] which provides as a condition of validity that the agreement conferring jurisdiction has been:
- concluded in writing or evidenced in writing;[2]
- in a form permitted by the practices established between the parties; or
- in international trade, in a form permitted by a usage which the parties knew or ought to have known and which, in that context, is widely known and regularly observed by the parties to contracts of the same type in the trade concerned.
If the parties have not expressly made that choice, jurisdiction will be governed primarily by the following principles:
- the general principle of the defendant's forum (Art. 4 of the Regulation) and
- the principle of the''performance of the obligation in courto' (Art. 7 of the Regulation).
With specific regard to this second option, Article 7 of the Regulation provides that a person domiciled in one Member State may be sued in another Member State:
- in contractual matters, before the court of the place of performance of the sued obligation;[3]
- For the purposes of the application of this provision and unless otherwise agreed, the place of performance of the obligation in suit is: in the case of the sale of goodsthe place, located in a Member State, where the goods have been or should have been delivered according to contract. "[4]
Reading this provision, it is not fully understood what is to be understood by "place of delivery"That is to say, whether that place is to be regarded as the place where the physical delivery to the seller took place, or whether the place of delivery to the carrier can be regarded as sufficient.
To solve this dilemma, the Court of Justice came to the rescue,[5] stating that:
"Article 5(1)(b), first indent, of Regulation No. 44/2001[6] must be interpreted as meaning that, in the case of distance selling, the place where the goods were delivered or should have been delivered under the contract must be determined on the basis of the provisions of that contract.
If it is not possible determine the place of delivery on that basis, without reference to the substantive law applicable to the contract,[7] such a place is that of the material delivery of goods by which the purchaser obtained or should have obtained the power to dispose effectively of those goods at the final destination of the sale transaction. "
2. Sale of goods, jurisdiction and incoterms: the pronouncements of the United Sections and the Court of Justice.
Italian jurisprudence has adapted to this principle: the United Sections of the Supreme Court of Cassation have established that on the subject of the international sale of movable goods, when the contract concerns goods to be transported (unless otherwise agreed by the parties), the "place of delivery"must be identified in the place of final delivery of goodsi.e. where the goods become materially and not merely legally available to the purchaser, resulting in jurisdiction
"of the court of the [place of final delivery of the goods] with respect to all disputes mutually arising out of the contract, including disputes concerning payment for the goods sold."[8]
Having established this principle, in 2011 the Court of Justice[9] a new question was submitted, namely whether in the context of the examination of a contract, in order to determine the place of delivery, the court should also take into account the Incoterms. The Court ruled as follows:
'the national court seised must take into account all the relevant terms and clauses of that contract which are capable of clearly identifying that place, including generally recognised terms and clauses enshrined in the customs of international trade, such as Incoterms ('International Commercial Terms'), drawn up by the International Chamber of Commerce, in the version published in 2000."
In particular,
"with regard to Incoterm "Ex-Works, [...] this clause also includes [...] the provisions of paragraphs A4 and B4, entitled "Delivery" and "Taking delivery" respectively, which refer to the same place and thus make it possible to identify the place of delivery of the goods."
The EU Court therefore ruled that the Incoterms, may be an element enabling the court to understand whether or not the parties have agreed on a place of delivery different from the final place of delivery. In particular, with the parties' acceptance of the term "ex-works Iconterms", the parties agree that the physical delivery of the goods must take place at the seller's place of business and, therefore, in the event that the parties do not agree, the court having jurisdiction will be that of the seller's place of business.
National jurisprudence has accepted this orientation, specifying, however, that the general principle of physical delivery can only be derogated from if this is apparent on the basis of a "clear and explicit' contractual determination. The Supreme Court[10] therefore denied that it can "the unilateral ex Works wording on invoices issued by the selling party takes on value," since this method of delivery must have been agreed upon by the parties.
The Court of Cassation, held that these characteristics of clarity, do not result from all the terms in the Incotermsin order to be valid also for the purposes of determining jurisdiction and, therefore, to take precedence, it must be clear, explicit and unequivocal.
It was therefore denied that the CTP clauses,[11] CIF[12] and FCA[13] manifest a clear and unambiguous will of the parties to determine the place of delivery of the goodsas an exception to the factual criterion of final delivery, since such clauses are rather intended to regulate the passing of risk on to the buyer.[14]
[1] Regulation that replaced the previous EU Regulation 44/2001.
[2] With reference to the written form, it "includes any communication by electronic means that permits a durable record of the agreement conferring jurisdiction" under Art. 25.2 of Reg. The Court of Justice has clarified that the purpose of this article is "that of putting certain forms of electronic communication on an equal footing with the written form, with a view to simplifying the conclusion of contracts by electronic means, since the communication of information is accessible via a screen.
So that electronic communication can offer the same guarantees, in particular with regard to evidence, it is sufficient that it is 'possible' to save and print the information prior to the conclusion of the contract. " (CG EU 21.5.2015, CarsOnTheWeb.Deutschland GmbH). The Un. sec. of the Supreme Court 2009 No. 19447They also held that the written form required by Article 23.2 of Reg. 01/44 could be supplemented by the recording of the invoices issued by the other party on the company's internal electronic systems.
[3] European case law has held that where there are several obligations arising from the same contract "the court seised, in determining its jurisdiction, will be guided by the principle that the accessory follows the principal; in other words, it will be the principal obligation, among the various obligations in quesitone, that will determine jurisdiction'. CJ EU 15.1.1987, Shenavai; 15.6.2017 Saale Kareda.
[4] This clause, likewise, incorporates that of Art. 5(1)(b) of Regulation 44/2001. In particular, with this provision the Community legislature intended to break explicitly, for contracts of sale, with the past solution whereby the place of performance was determined, for each of the disputed obligations, in accordance with the private international law of the court seised.
By designating the place of performance, the EU legislator wished to centralise jurisdiction at the place of performance and to determine a single jurisdiction for all claims based on the contract of sale. On this subject see also CJEU 3.5.2008, Color Drack. On this point see Pirruccio, Contracts unusable if Incoterms clauses are not explicit, Law Guide, 35-36, 2019, Gruppo24Ore.)
[5] Judgment Car. Trim GmbH C-381/08.
[6] This provision was also taken up by Article 7(1)(b) of Regulation 1215/2012.
[7] According to doctrine (Pirruccio(op. cit.) for the purpose of identifying the "place of delivery" of the goods, it is not possible to refer to the definitions of national law (such as Art. 1510 of the Civil Code), the application of which would risk defeating the purpose of the Regulation. Attention (!), the latter provision, on the other hand, may be used (at least as a defence) in the event that the sale is non-EU in character and, therefore, the Regulation does not apply: see Cass. Civ. 1982 no. 7040.
[8] Cass. Civ. Sec. Un. 2009 no. 21191, Cass. Civ. 2014 no. 1134. Attention(!) in case of non-application of European law (e.g. for sales extra EU): contra Cass. Civ. sez. Un. 2011 no. 22883.
[9]Judgment Electrosteel Europe SA - Case C-87/10.
[10] Cass. Civ. Order No. 24279 of 2014.
[11] Court of Padua, 3.5.2012.
[12] Cass. Civ. 2018 No. 32362.
[13] Cass. Civ. 2019 no. 17566.
[14] On this subject, see also http://www.membrettilex.com/ruolo-degli-incoterms-2010-nella-determinazione-del-giudice-competente/.
Internet jurisdiction? The Court of Justice gives an answer to this 'international intrigue'.
[:en]Published on 25.10.2012 a very important judgment of the Court of Justice which resolved an issue that had been open for several years. In fact, the European court was asked to decide on the possibility of an EU citizen, to be able appeal to the courts of the State in which it has its centre of interestsin order to claim compensation for the damage caused by the violation of one's rights to the person, by means of content placed on the web by a third party, via a website.
The Court was called upon to decide on two very similar issues:
- the first case had seen a German citizen, who had previously been convicted of murder and was later admitted to probation, apply to the German court for damages for content put online by an Austrian company, which infringed his personal rights;
- in the according toSimilarly, a French citizen sought an order to pay a sum of money against an English online newspaper that had published untrue information about him.
The Court of Justice, called upon to rule on these disputes, stated that there is the alternative course of action:
1. in the courts of the Member State where the person who has published the damaging content is established;
2. in the place where the injured party finds its centre of interest;
3. before the courts of any Member State on the territory of which anetworked information is accessible or has been accessible.
The judgment reasoned its decision on the basis of Article 5(3) of the Regulation (EC) 44/2001regulating, among other things, jurisdiction in the European context.
This rule, in fact, states that 'a person domiciled in one Member State may be sued in another Member State in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur. "
Very interesting this judgement and certainly not insignificant, which gives certainty in another situation of violation of personal rights in the field meta-territorial, i.e. through the use of the web platform.
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Lawyer's fees and competent jurisdiction.
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Recently, with the ruling of the 12.10.2011 n. 2100the Supreme Court has pronounced itself by stating that "the remuneration for professional serviceswhich is not conventionally established, is a illiquid pecuniary debtto be determined according to the professional tariff; it follows that the optional hole of the place where the obligation is to be performed (Art. 20 c.p.c., second hypothesis)'should be identified, pursuant to the last paragraph of Art. 1182 c.c.in the debtor's domicile in that same
tempo".[1]
Applying this principle to a lawyer's professional activity, the practical implications of the aforementioned judgment are evident. As is well known, in fact, Art. 20 c.p.c.which regulates as an alternative forum to the general forum of the defendant (Article 18 c.p.c.). states that 'in actions relating to rights of obligation, the court of the place where [...] the obligation in question is to be performed shall also have jurisdiction".
According to the Supreme Court, therefore, if it is not established "ab origine"The parties are entitled to the payment of the remuneration of a professional, the claim cannot be characterised as liquid since it can only be determined once the service has been rendered. Therefore, Article 1182 para. 3 of the Civil Code, which provides that ".the obligation relating to a sum of money must be performed at the domicile of the creditor at the time it is due. "
Given the non-liquid and determinable nature of the claim should instead be applied, according to the Supreme Court Article 1182 last paragraphwhich provides instead for performance of the obligation at the debtor's domicile.
This principle is clearly also applicable to the profession of lawyer. In fact, its remuneration most of the time cannot be determined in advance, especially if it concerns judicial activity, since it is not possible to foresee the actual activity to be performed in the course of the proceedings. Therefore, according to this orientation of the Supreme Court, should a lawyer proceed to recover a debt arising from his own professional activity, he will have to act at the defendant's forum ex Art. 18 c.p.c. or of the debtor ex art 20 c.p.c.
ABSTRACT
- Remuneration for professional services, which is not agreed upon, is an illiquid pecuniary debt, to be determined according to the professional tariff
- The optional forum of the place where the obligation is to be performed (Art. 20 c.p.c.) is to be identified, pursuant to the last paragraph of Art. 1182 c.c., in the domicile of the debtor
- A lawyer wishing to proceed for the recovery of his own claim must act either at the defendant's court pursuant to art. 18 c.p.c. or at the debtor's court pursuant to art. 20 c.p.c..
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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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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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