OPINION OF ADVOCATE GENERAL
TRSTENJAK
delivered on 28 November 2012 (1)
Case C‑645/11
Land Berlin
v
Ellen Mirjam Sapir,
Michael J. Busse,
Mirjam M. Birgansky,
Gideon Rumney,
Benjamin Ben-Zadok,
Hedda Brown and Others
(Reference for a preliminary ruling from the Bundesgerichtshof (Germany))
(Regulation (EC) No 44/2001 – Article 1(1) – Article 6(1) – Notion of ‘civil and commercial matters’ – Amount unduly paid by a public authority – Claim for repayment of the amount paid in judicial proceedings – Jurisdiction based on a factual connection – Closely connected claims – Defendant domiciled in a third country)
Table of contents
I – Introduction
II – Legislative framework
A – EU law
B – National law
1. Gesetz zur Regelung offener Vermögensfragen (Law on the settlement of open property issues (Law on property))
2. Gesetz über den Vorrang für Investitionen bei Rückübertragungsansprüchen nach dem Vermögensgesetz (Law on priority for investments in the case of claims for return under the Law on property (Law on investment priority))
III – Main proceedings
IV – Questions referred for a preliminary ruling
V – Procedure before the Court
VI – Arguments of the parties
A – The first question
B – The second question
C – The third question
VII – Legal assessment
A – The first question
1. The need for an autonomous interpretation of the notion of ‘civil and commercial matters’
2. The relevance of the case-law on Article 1 of the Brussels Convention to the interpretation of Article 1 of Regulation No 44/2001
3. Case-law on Article 1 of the Brussels Convention in the interpretation of Article 1 of Regulation No 44/2001
a) LTU
b) Rüffer
c) Sonntag
d) Baten
e) Préservatrice Foncière TIARD
f) Summary assessment of the case-law on Article 1 of the Brussels Convention
4. Continuation of the case-law developed on Article 1 of the Brussels Convention after the entry into force of Regulation No 44/2001
a) Apostolides
b) Realchemie Nederland
5. Application of the criteria developed in case-law to the facts in the main proceedings
a) The legal relationships between the parties to the action
b) Subject-matter of the action
6. Interim conclusion
B – The second question
1. The Court’s case-law on the notion of ‘closely connected’ within the meaning of Article 6(1) of the Brussels Convention and Article 6(1) of Regulation No 44/2001
a) Autonomous and strict interpretation of the criterion of ‘closely connected’
b) Sufficiently close connection and risk of irreconcilable judgments
c) Criterion of predictability of jurisdiction based on a factual connection from the point of view of the defendants
2. Application of the criteria developed in case-law to the facts in the main proceedings
a) Sufficiently close connection and risk of irreconcilable judgments
b) Criterion of predictability of jurisdiction based on a factual connection from the point of view of the defendants
3. Interim conclusion
C – The third question
1. Interpretation of Article 6(1) of Regulation No 44/2001
a) Wording of Article 6(1) of Regulation No 44/2001
b) Schematic position of Article 6(1) of Regulation No 44/2001
c) Spirit and purpose of Article 6(1) of Regulation No 44/2001
2. Mutatis mutandis application of Article 6(1) of Regulation No 44/2001 to cases involving third country defendants?
3. Interim conclusion
VIII – Conclusion
I – Introduction
1. The historical background to the present reference for a preliminary ruling made by the Bundesgerichtshof (Federal Court of Justice) (Germany) on 18 November 2011 dates back to the Third Reich. During that period many Germans suffered persecution and were required, often before they emigrated abroad, to sell their property at a price well below its value. The property was acquired in some cases by private individuals (2) and in some cases went into the ownership of public authorities.
2. In the German main proceedings in which the present reference for a preliminary ruling is made, the defendants are the legal successors of the victim of such a persecution measure (most of whom live abroad) and the plaintiff is the Land of Berlin. In terms of substantive law, the questions raised by the dispute include the amount of compensation to which the legal successors are entitled.
3. The national law of the Federal Republic of Germany lays down a complex procedure for obtaining compensation for such injustice as a result of persecution. The procedure must be conducted partly before an administrative authority and partly before the ordinary court having jurisdiction and, depending on the circumstances of the individual case, is directed at the return of the property, the payment of the proceeds of the sale to the victims, or additional compensation.
4. The reference for a preliminary ruling does not, however, concern the substantive issues, but fundamental questions regarding the jurisdiction of the court seised and the scope ratione materiae 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. (3)
5. Specifically, it asks what cases are to be regarded as civil and commercial matters within the meaning of Article 1(1) of Regulation No 44/2001. In addition, the reference for a preliminary ruling raises the question of the scope of Article 6(1) of Regulation No 44/2001. Where there are a number of defendants, proceedings may be brought under that provision ‘in the courts for the place where any one of them is domiciled’, provided it is expedient to hear and determine the claims together because they are so ‘closely connected’. The referring court asks about the meaning of that provision and its applicability to cases where not all the defendants are domiciled in a Member State of the European Union.
II – Legislative framework
A – EU law
6. Recitals 9, 11, 12, 15 and 19 in the preamble to Regulation No 44/2001 provide:
‘(9) A defendant not domiciled in a Member State is in general subject to national rules of jurisdiction applicable in the territory of the Member State of the court seised, and a defendant domiciled in a Member State not bound by this Regulation must remain subject to the Brussels Convention.
(11) The rules of jurisdiction must be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile and jurisdiction must always be available on this ground save in a few well-defined situations in which the subject-matter of the litigation or the autonomy of the parties warrants a different linking factor. ….
(12) In addition to the defendant’s domicile, there should be alternative grounds of jurisdiction based on a close link between the court and the action or in order to facilitate the sound administration of justice.
(15) In the interests of the harmonious administration of justice it is necessary to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in two Member States. …
(19) Continuity between the Brussels Convention and this Regulation should be ensured, and transitional provisions should be laid down to that end. The same need for continuity applies as regards the interpretation of the Brussels Convention by the Court of Justice of the European Communities …’.
7. Article 1(1) of Regulation No 44/2001 states:
‘This Regulation shall apply in civil and commercial matters whatever the nature of the court or tribunal. It shall not extend, in particular, to revenue, customs or administrative matters.’
8. Article 4(1) of Regulation No 44/2001 states:
‘If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, subject to Articles 22 and 23, be determined by the law of that Member State.’
9. Article 6 of Regulation No 44/2001 provides:
‘A person domiciled in a Member State may also be sued:
1. where he is one of a number of defendants, in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings;
2. …
3. on a counter-claim arising from the same contract or facts on which the original claim was based, in the court in which the original claim is pending;
4. …’.
10. Article 22 of Regulation No 44/2001 provides:
‘The following courts shall have exclusive jurisdiction, regardless of domicile:
1. in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the courts of the Member State in which the property is situated.
…
2. in proceedings which have as their object the validity of the constitution, the nullity or the dissolution of companies or other legal persons or associations of natural or legal persons, or of the validity of the decisions of their organs, the courts of the Member State in which the company, legal person or association has its seat. …;
3. in proceedings which have as their object the validity of entries in public registers, the courts of the Member State in which the register is kept;
4. in proceedings concerned with the registration or validity of patents, trade marks, designs, or other similar rights required to be deposited or registered, the courts of the Member State in which the deposit or registration has been applied for, has taken place or is under the terms of a Community instrument or an international convention deemed to have taken place.
…
5. in proceedings concerned with the enforcement of judgments, the courts of the Member State in which the judgment has been or is to be enforced …’.
11. Article 23(1) of Regulation No 44/2001 provides:
‘If the parties, one or more of whom is domiciled in a Member State, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. …’
B – National law
1. Gesetz zur Regelung offener Vermögensfragen (Law on the settlement of open property issues (Law on property)) (4)
12. Paragraph 1(1) of the Law on property gives the following definition of its scope:
‘The present law shall regulate claims under property law to property assets which were … expropriated and transferred into public ownership without compensation …’.
13. Paragraph 1(6) of the Law on property provides:
‘The present law shall be applicable mutatis mutandis to claims under property law made by citizens and associations who were persecuted on racial, political, religious or ideological grounds in the period from 30 January 1933 to 8 May 1945 and therefore forfeited their property as a result of compulsory sales, expropriations or otherwise …’.
14. Paragraph 3(1) of the Law on property provides with regard to the return of property assets:
‘Property assets which were subject to the measures referred to in Paragraph 1 and were transferred into public ownership or sold to third parties shall be returned upon request to the entitled persons, unless this is precluded …’.
2. Gesetz über den Vorrang für Investitionen bei Rückübertragungsansprüchen nach dem Vermögensgesetz (Law on priority for investments in the case of claims for return under the Law on property (Law on investment priority)) (5)
15. Paragraph 1 of the Law on investment priority states:
‘Properties … which are or may be the subject of claims for return under the Law on property may be used, wholly or in part, for special investment purposes in accordance with the following provisions. In such cases, the entitled person shall receive compensation under the present Law.’
16. Paragraph 16(1) of the Law on investment priority provides:
‘If … the return of the property asset is not possible, any entitled person may, after establishing or proving his entitlement, … claim payment of a sum of money equivalent to all the monetary benefits accruing to the property asset to be claimed by him under the contract. That claim shall be decided … by a decision of the Office or the Regional Office for the Settlement of Open Property Issues. If proceeds were not realised … [or] if they are below the market value of the property asset at the time when the investment priority decision becomes enforceable, … the entitled person may make a judicial claim for payment of the market value within one year …’.
III – Main proceedings
17. Julius Busse was the owner of a property in Berlin. In the Third Reich he was persecuted under the Nazi regime and was forced to sell his property to a third party. The property was later expropriated by the German Democratic Republic and incorporated in a larger plot together with other publicly owned properties. Following German reunification, the ownership of that entire parcel of land passed to the Land of Berlin and the Federal Republic of Germany. These owners sold it to an investor on 19 December 1997.
18. The first to tenth defendants in the main proceedings are legal successors of Julius Busse. The third, sixth, seventh and ninth defendants reside in Israel, the fifth defendant in the United Kingdom and the tenth defendant in Spain.
19. Under national law, the first to tenth defendants were entitled not to the return of the property but to a share of the proceeds of the sale of the entire parcel of land or, if greater, the relevant market value of the property. The competent authority issued an administrative act regarding that payment obligation.
20. That authority ordered the Land of Berlin, the plaintiff in the main proceedings, to pay to the first to tenth defendants in the main proceedings such share of the proceeds of sale as corresponded to the proportion of the entire parcel of land represented by the property owned by Julius Busse. In making that payment, the plaintiff in the main proceedings made an error. It erroneously paid to the 11th defendant in the main proceedings, the lawyer representing the first to tenth defendants in the main proceedings, not only that share of the purchase price but the entire purchase price and the lawyer then distributed that amount amongst the first to tenth defendants.
21. In the main proceedings the Land of Berlin seeks to recover from the first to tenth defendants the amount overpaid which it calculates as EUR 2.5 million. It has sued those parties and, in addition, the 11th defendant, who, it is alleged, committed a tortious act in connection with the forwarding of those monies, in Germany before the Landgericht Berlin (Regional Court, Berlin). The defendants in the main proceedings have argued, in relation to certain defendants, that is, the third, fifth, sixth, seventh, ninth and tenth defendants, that pursuant to the rules on conflicts of law the Landgericht Berlin does not have jurisdiction. In any event, they argue that they are entitled to an amount which exceeds a share of the proceeds of sale as the amount realised through that sale failed to reach the market value of the property (‘additional compensation claims’).
22. By an interim decision, the Landgericht dismissed the action against the third, fifth, sixth, seventh, ninth and tenth defendants as inadmissible. The plaintiff’s appeal was unsuccessful. By the appeal on a point of law, the plaintiff seeks to ensure that the Landgericht determines the substance of its claims also in relation to those defendants.
23. The appeal court takes the view that, pursuant to the rules on the conflicts of law, the German courts do not have jurisdiction to hear the claims against the third, fifth, sixth, seventh, ninth and tenth defendants in the main proceedings, as Regulation No 44/2001 does not apply to the present case. The matter at issue does not constitute a civil but a public law matter to which that regulation, pursuant to Article 1(1), does not apply. Moreover, the payment should not be viewed in isolation. Instead, regard must be had to the basis for such payment, namely, the decision confirming an entitlement to the return of property.
IV – Questions referred for a preliminary ruling
24. Against this background, reference is made to the Court for a preliminary ruling on the following questions:
1. Does a claim for the repayment of an amount unduly paid constitute a civil matter within the meaning of Article 1(1) of Regulation No 44/2001 in the circumstances where a Land ordered by a public authority to pay to victims by way of compensation part of the proceeds from a sale of land instead, erroneously, pays to those parties the entire purchase price?
2. Can claims be regarded as so closely connected as required pursuant to Article 6(1) of Regulation No 44/2001 where the defendants rely on additional compensation claims susceptible only to uniform determination?
3. Does Article 6(1) of Regulation No 44/2001 apply also to defendants not domiciled in the European Union? If that question is answered in the affirmative, does this also apply where, in the defendant’s State of domicile, pursuant to a bilateral convention with the State determining the claim, recognition of the judgment might be refused for lack of jurisdiction?
V – Procedure before the Court
25. The order for reference dated 18 November 2011 was lodged at the Registry of the Court of Justice on 16 December 2011.
26. Written observations were submitted by the German and Portuguese Governments and the European Commission within the period laid down in Article 23 of the Statute of the Court of Justice.
27. As none of the parties applied for the oral procedure to be opened, it was possible to prepare the Opinion in this case after the general meeting of the Court on 25 September 2012.
VI – Arguments of the parties
28. The parties largely agree on the answers to the questions referred.
29. They all take the view that the claim for the repayment of an amount unduly paid in the main action constitutes a ‘civil matter’ within the meaning of Article 1(1) of Regulation No 44/2001. In their opinion, claims can also be regarded as so closely connected as required pursuant to Article 6 of Regulation No 44/2001 where the defendants rely on additional compensation claims susceptible only to uniform determination. Furthermore, they all take the view that Article 6(1) of Regulation No 44/2001 does not apply also to defendants not domiciled in the European Union.
A – The first question
30. The parties point out that the notion of ‘civil and commercial matter’ must be defined autonomously in accordance with the methods of interpretation developed in the Court’s case-law. The relevant factor is whether or not public powers are exercised.
31. The German Government takes the view that a claim for repayment is a civil matter where a Land is intended, on the basis of a claim established by a public authority, to pay only part of the proceeds from a sale of land but, instead, erroneously, pays the entire purchase price, provided the claim on which the payment is based is linked to private ownership on the part of the Land.
32. The Portuguese Government argues, in the light of the nature and the subject-matter of the action, that its aim is simply to claim repayment of an amount unduly paid. The plaintiff is no different in this regard from a legal entity in civil law.
33. The Commission states that the claim for repayment of the alleged overpayment should be made in the civil courts and that the plaintiff does not enjoy any prerogatives in this regard. Rather it acts in the same way as a private individual in a comparable situation.
B – The second question
34. In the view of the German Government, the existence of the unjust enrichment alleged by the plaintiff depends on whether there is a legal basis for payment to the defendants. Such a legal basis in respect of additional compensation claims can stem only from the Law on property and the Law on investment priority, a question which is to be determined on the basis of the same situation of law for all the defendants and is susceptible only to uniform determination for all of them. Both the action and the defence lodged against it, the alleged existence of additional compensation claims, had the same legal basis. The claims are therefore so ‘closely connected’ as required by Article 6(1) of Regulation No 44/2001.
35. The Portuguese Government also takes the view that the claim for repayment and the additional compensation claims made against it are so closely connected that it is expedient to determine them together to avoid irreconcilable judgments. The application of Article 6(1) of Regulation No 44/2001 would not appear to be precluded by the fact that the claims have different bases.
36. The Commission states, first, that a counter-claim cannot be made in the main proceedings with regard to the additional compensation claims and Article 6(3) of Regulation No 44/2001 is not therefore relevant. In so far as additional compensation claims were made merely as pleas in law raised in defence against the plaintiff’s claim of unjust enrichment, this does not mean that the claims cannot be regarded as so closely connected as required pursuant to Article 6(1) of Regulation No 44/2001, a situation which exists regardless of the different bases for the claims – the rules on unjust enrichment and tort law – since they concern the same situation of law and fact.
C – The third question
37. In the view of the German Government, it is clear from the wording of Article 6(1) of Regulation No 44/2001 that the provision applies solely to defendants domiciled in a Member State. The scheme of the provision precludes an interpretation going beyond the wording of that rule. Rather, the exceptional character of that provision calls for a strict interpretation. Furthermore, Article 4(1) of Regulation No 44/2001 includes a specific rule for defendants not domiciled in a Member State.
38. The Portuguese Government considers that Article 6(1) of Regulation No 44/2001 is not relevant to a co-defendant not domiciled in the European Union and refers in this respect to Réunion européenne and Others, (6) according to which ‘Article 6(1) of the [Brussels] Convention must be interpreted as meaning that a defendant domiciled in a Contracting State cannot be sued in another Contracting State before a court seised of an action against a co-defendant not domiciled in a Contracting State on the ground that the dispute is indivisible rather than merely displaying a connection’.
39. The Commission argues that under Article 3(1) and Article 4(1) of Regulation No 44/2001 persons not domiciled in a Member State may not be sued on the basis of Article 6(1) of that regulation.
VII – Legal assessment
A – The first question
40. By its first question the referring court is essentially seeking to ascertain whether a claim for the repayment of an amount unduly paid by a Land constitutes a civil matter within the meaning of Article 1(1) of Regulation No 44/2001 in the circumstances of the main proceedings where a Land ordered by a public authority to pay to victims by way of compensation part of the proceeds from a sale of land instead, erroneously, pays to those parties the entire purchase price, and then claims repayment of the overpaid amount in judicial proceedings.
41. In order to answer this question, it is first necessary to clarify the meaning of ‘civil and commercial matters’ within the meaning of Regulation No 44/2001. In this connection regard must be had to the Court’s case-law on this element and the lessons learnt must be applied to the facts of the main proceedings.
1. The need for an autonomous interpretation of the notion of ‘civil and commercial matters’
42. In contrast with, in particular, the ‘administrative matters’ also mentioned in Article 1 of Regulation No 44/2001, the notion of ‘civil and commercial matters’ must be given an autonomous interpretation in EU law. Reference must not be made to the law of one of the States concerned but to the objectives and scheme of the legislation and to the general principles which stem from the corpus of the national legal systems. (7)
43. It should be borne in mind that, because of the different organisational forms and the large number of the Member States’ national legal orders, in so far as the distinction between private law and public law is concerned, it is increasingly difficult to identify general legal principles for all Member States. (8)
44. A convenient approach to the meaning of the notion ‘civil and commercial matters’ is nevertheless provided by the Court’s existing case-law on Article 1 of the Brussels Convention.
2. The relevance of the case-law on Article 1 of the Brussels Convention to the interpretation of Article 1 of Regulation No 44/2001
45. According to recital 19 in the preamble to Regulation No 44/2001, the Union legislature assumes ‘continuity between the Brussels Convention [(9)] and … Regulation [No 44/2001]’. This means that, provided the terms are the same, the relevant case-law on the Brussels Convention may be included in the consideration of the interpretation of Regulation No 44/2001. (10)
46. Since the notion of ‘civil and commercial matters’ goes back to Article 1 of the Brussels Convention, it is necessary to consider the Court’s existing case-law on that provision, to analyse its continuation in the light of Regulation No 44/2001 and to apply it to the present case.
3. Case-law on Article 1 of the Brussels Convention in the interpretation of Article 1 of Regulation No 44/2001
a) LTU (11)
47. A key statement on the notion of civil and commercial matters can be found in paragraph 5 of the judgment in LTU, which concerned en route charges for the use of air navigation services which an international air surveillance organisation could charge airlines. The organisation had sued for such charges in a Belgian commercial court and then wished to have the judgment declared enforceable in Germany.
48. The Court stated that ‘[a] judgment given in an action between a public authority and a person governed by private law, in which a public authority has acted in the exercise of its powers, is excluded from the area of application of the Convention.’
49. The crucial point, as a kind of negative determining factor for rejecting the existence of a civil and commercial matter and thus for ruling out the applicability of the Brussels Convention, was therefore whether one of the parties acted ‘in the exercise of its powers’.
50. Whilst there is no abstract or general definition of this phrase in LTU, the Court does state that the party must be assumed to have acted in the exercise of its public powers in the main proceedings because ‘[the] dispute … concerns the recovery of charges payable by a person governed by private law to a national or international body governed by public law for the use of equipment and services provided by such body … This applies in particular where the rate of charges, the methods of calculation and the procedures for collection are fixed unilaterally in relation to the users …’. (12)
51. In that case the Court thus gave substance to this initially very broad (13) and vague notion as a general example and linked it to inherently public activities. (14)
b) Rüffer (15)
52. Rüffer endorses the assessments made in LTU in this regard. The main proceedings concerned a claim for redress brought by the Netherlands against the German owner of a boat which sank in Netherlands internal waters in respect of recovery of the salvage costs. (16)
53. The Court did not subsume that action under the notion of civil and commercial matters because it concerned the consequences of a measure taken by the river police which is generally regarded a public activity. (17) The fact that in recovering the costs the debt arises from an act of public authority is sufficient for its action to be treated as being outside the ambit of the Brussels Convention. (18)
c) Sonntag (19)
54. The Sonntag judgment concerned a claim for compensation made in summary proceedings in Italy against a teacher in a German State school for breach of his duty of supervision, which resulted in a pupil suffering a fatal accident on a school trip.
55. In that case too, the Court made reference to the findings in the abovementioned LTU and Rüffer judgments, but did not consider a sufficient exercise of public powers to exist in that case.
56. In the view of the Court, the Convention does not apply only where the author of the damage against whom the action is brought must be regarded as a public authority which acted in the exercise of public powers. However, even though he acts on behalf of the State, a civil servant does not always exercise public powers. In the majority of the legal systems of the Member States the conduct of a teacher in a State school, in his function as a person in charge of pupils during a school trip, does not constitute an exercise of public powers, since such conduct does not entail the exercise of any powers going beyond those existing under the rules applicable to relations between private individuals. Even if the activity of supervising pupils is characterised in the Contracting State of origin of the teacher concerned as an exercise of public powers, that fact does not affect the characterisation of the dispute in the main proceedings in the light of the Brussels Convention. (20)
57. Sonntag thus clarifies the notion of ‘civil matter’ in so far as it focuses on whether specifically public powers are exercised or whether the duties and powers in question are ultimately no different from those of private individuals. If the latter case holds, the Brussels Convention is applicable, even if a vague connection with State action can be identified, but it is not characterised by the exercise of specifically public powers.
d) Baten (21)
58. The judgment in Baten follows in the same line of case-law: an action under a right of recourse in which a public body seeks recovery from a private person of sums paid by it by way of social assistance to the divorced spouse and the child of that person comes under the Brussels Convention provided that the basis and the detailed rules relating to the bringing of that action are governed by the rules of the ordinary law in regard to maintenance obligations. However, where the action under a right of recourse is founded on provisions by which the legislature conferred on the public body a prerogative of its own, that action cannot be regarded as being brought in ‘civil matters’. (22)
59. The element of ‘civil and commercial matters’ must therefore be examined in the light of the legal relationships between the parties to the action or its subject-matter, (23) the determining factor being whether or not a public body has prerogatives of its own.
e) Préservatrice Foncière TIARD (24)
60. This approach is also confirmed by Préservatrice Foncière TIARD: ‘civil and commercial matters’ covers a claim by which a contracting State seeks to enforce against a person governed by private law a private-law guarantee contract which was concluded in order to enable a third person to supply a guarantee required and defined by that State, in so far as the legal relationship between the creditor and the guarantor, under the guarantee contract, does not entail the exercise by the State of powers going beyond those existing under the rules applicable to relations between private individuals. (25)
f) Summary assessment of the case-law on Article 1 of the Brussels Convention
61. Analysing the development of the case-law on the notion of ‘civil and commercial matters’ within the meaning of Article 1 of the Brussels Convention, it is clear that the Court essentially determines the scope of the Brussels Convention either by reason of the legal relationships between the parties to the action or of the subject-matter of the action. (26) The Court accepts that a public authority ‘acted in the exercise of its powers’ in accordance with the rule in LTU, (27) which results in the rejection of the existence of a ‘civil and commercial matter’ and thus the exclusion of the applicability of the Brussels Convention, only under strict conditions and it does not consider a merely vague connection with State action with no specifically public character to be sufficient. (28)
62. The crucial factor is whether the relevant duties and powers exercised by a State authority in a specific case are functionally different from those of private individuals, i.e. whether the State exercises prerogatives of its own. (29) If that is the case – for example the measures taken by the river police in Rüffer – the Brussels Convention is not applicable. If it is not the case – for example the alleged breach by the teacher in a State school of his duty of supervision in Sonntag, which is to be assessed on the basis of the same criteria as in the case of legal relationships based purely on private law – the Brussels Convention is applicable and the case is to be regarded as a ‘civil and commercial matter’.
4. Continuation of the case-law developed on Article 1 of the Brussels Convention after the entry into force of Regulation No 44/2001
63. After the entry into force of Regulation No 44/2001, the abovementioned case-law developed on Article 1 of the Brussels Convention was applied directly to Article 1 of the regulation.
a) Apostolides (30)
64. For example, the Court stated in Apostolides, (31) bringing together the criteria previously developed on the Brussels Convention: ‘The autonomous interpretation of the concept of “civil and commercial matters” results in the exclusion of certain judicial decisions from the scope of Regulation No 44/2001, by reason either of the legal relationships between the parties to the action or of the subject-matter of the action … Thus, the Court has held that, although certain actions between a public authority and a person governed by private law may come within the concept, it is otherwise where the public authority is acting in the exercise of its public powers … The exercise of public powers by one of the parties to the case, because it exercises powers falling outside the scope of the ordinary legal rules applicable to relationships between private individuals, excludes such a case from civil and commercial matters within the meaning of Article 1(1) of Regulation No 44/2001 …’.
b) Realchemie Nederland (32)
65. In Realchemie Nederland (33) the Court clarified the notion of ‘civil and commercial matter’ for the practically important case of the imposition of a fine by a German court in order to ensure compliance with a judgment given in a civil and commercial matter. Specifically, the case concerned a prohibition under patent law on pain of a fine, which was subsequently imposed, and its enforceability in the Netherlands.
66. Although that fine was imposed automatically and ultimately does not benefit the obligee, but the treasury, Regulation No 44/2001 applies to the recognition and enforcement of a decision of a court or tribunal that contains an order to pay a fine, since the dispute in the main proceedings to which it relates is a civil and commercial matter as defined by that regulation. (34) The Court makes clear that ‘specific aspects of the German enforcement procedure cannot … be regarded as decisive as regards the nature of the right to enforcement. The nature of that right depends on the nature of the subjective right, pursuant to the infringement of which enforcement was ordered, that is, in the present case, Bayer’s right to exclusively exploit the invention protected by its patent which is clearly covered by civil and commercial matters within the meaning of Article 1 of Regulation No 44/2001’. (35)
67. The Court thus pointed out that the material factor is the legal relationship in question and the subject-matter of the action and purely procedural specific aspects, which do not affect their nature, are irrelevant to Article 1 of Regulation No 44/2001. If an ‘action brought is intended to protect private rights and does not involve the exercise of public powers by one of the parties to the dispute[,] … the legal relationship between [the parties] must be classified as “a private law relationship” and is therefore covered by the concept of “civil and commercial matters” within the meaning of Regulation No 44/2001’. (36)
68. It is now necessary to apply the determining factors thus summarised to the facts of the main proceedings in the present case and to examine whether it should be classified as a ‘civil and commercial matter’ in the light of the Court’s settled case-law.
5. Application of the criteria developed in case-law to the facts in the main proceedings
69. In the light of the foregoing, in order to answer the first question it is necessary to consider the legal relationships between the parties to the action, its subject-matter and, in particular, the question whether the Land of Berlin, the plaintiff in the main proceedings, is bringing legal proceedings in the exercise of public powers.
a) The legal relationships between the parties to the action
70. It is first necessary to consider the legal relationship between the defendants and the plaintiff, against the background of which the contested undue overpayment whose repayment is now being claimed was made.
71. As the referring court (37) states, the rules on compensation under the German Law on property and Law on investment priority, described above in points 12 and 13 of this Opinion, apply regardless of who is the owner of the property subject to restitutionary rights, whether the public sector or a private owner.
72. The owners in many cases are indeed public authorities, like the plaintiff in the present case, but sometimes also private owners, such as beneficiaries of forced sales of properties or undertakings in the Third Reich. The same rules apply to them all. The public authorities do not enjoy any privileges or special status in this regard. This also applies in particular to the rectification of errors in connection with the satisfaction of victims’ claims for payment, for example where, as in the present case, there has been an overpayment. The victim must be sued for repayment of the overpaid amount in the civil courts. There is no exception even for public owners like the Land of Berlin. They do not therefore enjoy any prerogatives, but are treated in the same way as any private owner in a comparable situation.
73. Accordingly, as the German (38) and Portuguese Governments (39) and the Commission (40) also essentially point out, the underlying legal relationship between the parties in question cannot, by its nature, be considered to have any characteristics which would confer on the public authorities special prerogatives distinguishing them from any private individuals concerned in a comparable situation.
74. The legal relationships at issue in the main proceedings therefore suggest, by their nature, classification as a ‘civil and commercial matter’. As the German Government rightly states, (41) that finding is also not altered by the fact that the original payment obligation which gave rise to the erroneous overpayment was at one time the subject of an administrative procedure. This is a purely procedural matter which does not have a decisive bearing on the nature of the underlying obligation to pay a share of the proceeds to the legal successors and thus the legal relationship between the parties per se, especially since, as the referring court expressly points out, such a procedure can also involve private individuals.
b) Subject-matter of the action
75. In my view, neither the claim specifically brought by the plaintiff nor the detailed rules relating to the bringing of that claim have any peculiarities which reflect special characteristics of public action.
76. On the contrary, as the Portuguese Government rightly observes, (42) the present case concerns nothing other than an undue overpayment made in error, the restitution of which is being claimed on the basis of the principles of unjust enrichment.
77. The error is certainly not therefore typical of public action, but is a payment error which can also be made at any time in private legal transactions. The fact that the overpayment in this case was preceded by an administrative procedure is irrelevant and in particular does not lend any specifically public character to the claim of unjust enrichment.
78. An inseparable link with the preceding administrative procedure also cannot be taken to exist simply because that procedure concerned only the payment of the amount actually due, but not the overpayment at issue in the present case.
6. Interim conclusion
79. In view of the legal relationships between the parties to the action or the subject-matter of the main proceedings and bearing in mind that the dispute is not connected with the exercise of special public powers, but the plaintiff Land is subject to the same rules of law as a private individual in a comparable situation, a ‘civil and commercial matter’ within the meaning of Article 1 of Regulation No 44/2001 must be taken to exist in the present case.
80. The answer to the first question is therefore that a claim for the repayment of an amount unduly paid by a Land does constitute a civil matter within the meaning of Article 1(1) of Regulation No 44/2001 in the circumstances of the main proceedings where a Land ordered by a public authority to pay to victims by way of compensation part of the proceeds from a sale of land instead, erroneously, pays to those parties the entire purchase price, and then claims repayment of the overpaid amount in judicial proceedings.
B – The second question
81. The second question asked by the referring court relates primarily to the fifth and tenth defendants in the main proceedings, who are domiciled in the United Kingdom and in Spain, but have been sued by the plaintiff in the main proceedings in Berlin.
82. The referring court takes the view that in relation to those defendants, the German courts can only have jurisdiction on the basis of Article 6(1) of Regulation No 44/2001. (43) Against that background, it asks about the meaning of that provision, which regulates jurisdiction based on a factual connection. (44)
83. Under that provision, ‘a person domiciled in a Member State may also be sued … in the courts for the place where any one of them is domiciled’, (45) ‘provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.’
84. With its second question the referring court focuses on the criterion of the claims being ‘closely connected’.
85. It wishes to know whether claims can be regarded as so closely connected as required pursuant to Article 6(1) of Regulation No 44/2001 also where the defendants rely on additional compensation claims susceptible only to uniform determination.
86. Specifically, those claims concern the defendants’ argument that they are entitled to an amount which exceeds a share of the proceeds of sale as the amount realised through that sale failed to reach the market value of the property and that those additional compensation claims preclude the applicant’s claim of unjust enrichment.
87. Two preliminary points must be made in this regard: first of all, additional compensation claims have not been made in the main proceedings in the form of a counter-claim and Article 6(3) of Regulation No 44/2001, which specifically concerns the case of a counter-claim, is not therefore relevant. Secondly, as the Commission rightly observes, (46) the referring court does not appear in general to have any doubts that the claims are closely connected within the meaning of Article 6(1) of Regulation No 44/2001, but actually asks the question whether the compensation claims lodged could eliminate an a priori close connection between the claims within the meaning of that provision.
88. However, both aspects – claims and pleas in law raised in defence against those claims – must form part of an overall assessment in order to be able to ascertain whether the procedural position in the main proceedings satisfies the conditions under Article 6(1) of Regulation No 44/2001.
89. It must therefore be examined, first, under what conditions it can be assumed that the claims are so closely connected that it is expedient to hear and determine them together in accordance with the provision. To that end, an analysis must be conducted of the Court’s case-law on Article 6(1) of Regulation No 44/2001 and the precursor provision in the Brussels Convention. In a second stage the findings made will then have to be applied to the main proceedings, having particular regard to the relevance of the compensation claims made there.
1. The Court’s case-law on the notion of ‘closely connected’ within the meaning of Article 6(1) of the Brussels Convention and Article 6(1) of Regulation No 44/2001
90. I discussed in detail the main aspects of the Court’s case-law on this subject in my Opinion in Painer (47) and wish to limit my comments in the present case to the most important points and the Painer (48) judgment itself.
a) Autonomous and strict interpretation of the criterion of ‘closely connected’
91. The Court essentially requires that the notion of ‘closely connected’ be interpreted independently (49) and strictly since the provision is a special rule which derogates from the principle stated in Article 2 of Regulation No 44/2001 that jurisdiction be based on the defendant’s domicile; it cannot be given an interpretation going beyond the cases expressly envisaged by that regulation. (50)
92. According to Painer, in the context of Article 6(1) of Regulation No 44/2001 it is for the referring court to assess, in the light of all the elements of the case, whether there is a connection between the different claims brought before it, that is to say a risk of irreconcilable judgments if those claims were determined separately. (51)
b) Sufficiently close connection and risk of irreconcilable judgments
93. The Court states that the rule of jurisdiction in Article 6(1) of Regulation No 44/2001 is based, in accordance with recitals 12 and 15 in the preamble to that regulation, first on the attempt to facilitate the sound administration of justice, to minimise the possibility of concurrent proceedings and thus to avoid irreconcilable outcomes if cases are decided separately. Second, however, that rule may not be interpreted in a way which would allow a plaintiff to make a claim against a number of defendants with the sole purpose of ousting the jurisdiction of the courts of the State where one of those defendants is domiciled. (52)
94. With regard to the criterion of a connection, the Court has also stated that in order that decisions may be regarded as contradictory for the purposes of Article 6(1) of Regulation No 44/2001, it is not sufficient that there be a divergence in the outcome of the dispute, but that divergence must also arise in the context of the same situation of law and fact. (53)
c) Criterion of predictability of jurisdiction based on a factual connection from the point of view of the defendants
95. In Painer the Court also made reference to recital 11 in the preamble to Regulation No 44/2001. That recital states that the rules of jurisdiction must be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile, save in a few well-defined situations which warrant a different linking factor. (54)
96. Thus, a difference in legal basis between the actions brought against the various defendants does not, in itself, preclude the application of Article 6(1) of Regulation No 44/2001, provided however that it was foreseeable by the defendants that they might be sued in the Member State where at least one of them is domiciled. (55) That reasoning is stronger if the national laws on which the actions against the various defendants are based are substantially identical. (56)
2. Application of the criteria developed in case-law to the facts in the main proceedings
a) Sufficiently close connection and risk of irreconcilable judgments
97. In the present case both the actions in question, which are based on a claim of unjust enrichment or, as regards the 11th defendant, a tortious act, and the plea of additional compensation claims raised against them are based on the same situation of law and fact.
98. It is characterised by the claim made against the public authorities under the Law on property and the transfer of the contested amount to the first to tenth defendants, in whose collection the 11th defendant acted as their lawyer and whose repayment is now being claimed in the civil court.
99. This assessment is not affected by the fact that the plaintiff does not claim unjust enrichment against the 11th defendant, but invokes tort law. The Court has made clear that identical grounds for the claims are not necessary for related actions for the purposes of Article 6(1) of Regulation No 44/2001. (57) In the present case, the claims in the different actions are ultimately directed at the same interest, namely the repayment of the erroneously transferred surplus amount.
100. The additional compensation claims lodged fit in perfectly with this identical situation of law and fact in the actions. They are equally important for all the defendants in relation to the claims made against them. As the German Government rightly states, (58) the only legal basis for payment on which the defendants can rely is a claim under the Law on property and the Law on investment priority, a question which is to be determined on the basis of the same situation of law for all the defendants.
101. As the referring court states, (59) the matter can be determined ‘only on a uniform basis in relation to all the defendants’. That view is correct irrespective of whether the defendants are jointly and severally liable or, as the referring court appears to assume, (60) partially liable. The existence or non-existence of additional compensation claims is not a common preliminary issue on which the success of the actions depends. If they are not subject to uniform determination, there is a risk of irreconcilable judgments. However, irreconcilable judgments would fragment the single factual and legal situation described above in an unacceptable manner.
b) Criterion of predictability of jurisdiction based on a factual connection from the point of view of the defendants
102. As the German Government (61) rightly observes, because of the single factual situation it was also predictable by the defendants that they might be sued in the Federal Republic of Germany.
103. The defendants domiciled in Member States other than Germany – who have joint legal representation and brought the compensation proceedings jointly – must also have known that persons domiciled in Germany were also among the group of legal successors and that claims made against those persons could potentially establish jurisdiction under Article 6(1) of Regulation No 44/2001 as ‘anchor claims’ to the detriment of the others. In this respect the present case differs significantly from ‘unconcerted parallel conduct’ which is not predictable by the defendants, because it is based on different factual situations. (62)
3. Interim conclusion
104. In the light of the foregoing, the answer to the second question must be that claims can be regarded as so closely connected as required pursuant to Article 6(1) of Regulation No 44/2001 where, in circumstances like those in the main proceedings, the defendants rely on additional compensation claims against the plaintiff susceptible only to uniform determination.
C – The third question
105. The third question relates to the defendants domiciled in Israel. The referring court would first like to know whether Article 6(1) of Regulation No 44/2001 applies also to defendants not domiciled in the European Union.
1. Interpretation of Article 6(1) of Regulation No 44/2001
106. According to the methods of interpretation developed by the Court, (63) the provision is to be interpreted with reference to its wording, taking into account its legislative context and its spirit and purpose.
a) Wording of Article 6(1) of Regulation No 44/2001
107. On the necessary strict interpretation (64) of Article 6(1) of Regulation No 44/2001, it is clear from the wording that jurisdiction based on a factual connection can be relevant only for a ‘person domiciled in a Member State’.
108. Conversely, defendants domiciled in Israel, i.e. not in a Member State, do not fall within the scope of Article 6(1) of Regulation No 44/2001.
b) Schematic position of Article 6(1) of Regulation No 44/2001
109. As the German Government rightly states, (65) having regard to the legislative context of Regulation No 44/2001, it is not possible to give Article 6(1) an interpretation going beyond the wording.
110. It should be borne in mind, first, that Article 6(1) of Regulation No 44/2001 is an exception to the principle that jurisdiction is based on the defendant’s domicile and that, as was expressly reiterated in Painer, (66) it cannot be given an interpretation going beyond the cases expressly envisaged by that regulation.
111. Second, Article 4(1) of Regulation No 44/2001 makes express provision specifically for defendants not domiciled in a Member State. If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State must, subject to Articles 22 and 23 of Regulation No 44/2001, be determined by the law of that Member State. In the present case, however, neither Article 22, which regulates exclusive jurisdiction regardless of the domicile of the defendant, nor Article 23 of Regulation No 44/2001, which concerns agreements conferring jurisdiction, is relevant, and consequently, as expressly provided by Regulation No 44/2001, the jurisdiction of the German courts is only established by the law of that Member State, but not by Regulation No 44/2001, which makes exhaustive provision in this regard.
112. This is also consistent with recital 9 in the preamble to the regulation in question, according to which a defendant not domiciled in a Member State is in general subject to national rules of jurisdiction applicable in the territory of the Member State of the court seised. Conversely, this means that Regulation No 44/2001 is not intended to be applicable to such a defendant, subject to certain exceptions.
c) Spirit and purpose of Article 6(1) of Regulation No 44/2001
113. Teleological considerations also lead to the same conclusion.
114. De lege lata the relevant spirit and purpose of Article 6(1) of Regulation No 44/2001, according to the recitals in the preamble, is, in the interests of the harmonious administration of justice, to minimise the possibility of concurrent proceedings and to ensure that irreconcilable judgments will not be given in two Member States.
115. It follows that in its present structure the provision is not tailored to cases involving third country defendants.
116. De lege ferenda this may perhaps change, as the Commission’s proposal of 14 December 2010 recasting Regulation No 44/2001 (67) generally called for an extension of ‘the Regulation’s jurisdiction rules to third country defendants’. However, it is not yet possible to ascertain the specific guise that will be taken by Article 6(1) of the regulation in question after a recast, especially since the Commission proposal only made mainly drafting amendments. (68)
2. Mutatis mutandis application of Article 6(1) of Regulation No 44/2001 to cases involving third country defendants?
117. In German legal literature, however, consideration is given to applying Article 6(1) of Regulation No 44/2001 mutatis mutandis where one or more defendants is resident in a non-Member State provided at least one other defendant is domiciled in a Member State. (69) The reason for this is that otherwise persons domiciled in a third country would be given unacceptable preferential treatment, which is not intended by Regulation No 44/2001.
118. This argument is not convincing, (70) however, because there is no lacuna in the regulation in question and there is therefore no scope for mutatis mutandis application.
119. Regulation No 44/2001 has made exhaustive provision in relation to persons domiciled in third countries in its Articles 4, 22 and 23, referring to the relevant national law in cases not covered by the regulation. The Member States may therefore apply their own rules of jurisdiction in relation to persons domiciled in a third country in this segment not regulated by the regulation in question. It is nevertheless not possible to extend the regulation beyond its own scope.
3. Interim conclusion
120. In the light of the foregoing, the answer to the third question must be that Article 6(1) of Regulation No 44/2001 does not apply to defendants not domiciled in the European Union.
121. Since this question was answered in the negative, there is no need to answer the further subquestion, asked only in the event that it is answered in the affirmative, concerning the legal position where, in the defendant’s State of domicile, pursuant to a bilateral convention with the State determining the claim, recognition of the judgment might be refused for lack of jurisdiction.
122. As a precaution, however, should the Court answer the first part of the third question in the affirmative, it must be pointed out that problems of recognition in third countries could not really have effects on the interpretation of Regulation No 44/2001 and in any case this risk is borne by the plaintiff. (71)
VIII – Conclusion
123. In the light of the foregoing, I propose that the Court answer the questions referred for a preliminary ruling by the Bundesgerichtshof as follows:
(1) A claim for the repayment of an amount unduly paid by a Land does constitute a civil matter within the meaning of Article 1(1) 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 in the circumstances of the main proceedings where a Land ordered by a public authority to pay to victims by way of compensation part of the proceeds from a sale of land instead, erroneously, pays to those parties the entire purchase price, and then claims repayment of the overpaid amount in judicial proceedings.
(2) Claims can be regarded as so closely connected as required under Article 6(1) of Regulation No 44/2001 where, in circumstances like those in the main proceedings, the defendants rely on additional compensation claims against the plaintiff susceptible only to uniform determination.
(3) Article 6(1) of Regulation No 44/2001 does not apply to defendants not domiciled in the European Union.