OPINION OF ADVOCATE GENERAL
SZPUNAR
delivered on 7 April 2016 (1)
Case C‑222/15
Hőszig kft
v
Alstom Power Thermal Services
(Request for a preliminary ruling from the Pécsi Törvényszék (Court of Pécs, Hungary))
(Area of freedom, security and justice — Jurisdiction in civil and commercial matters — Regulation (EC) No 44/2001 — Article 23(1) — Prorogation of jurisdiction — Agreement conferring jurisdiction on the courts of one particular city of a Member State — General conditions of contract)
1. The present case, which relates to civil law proceedings between two firms and involves a number of questions in relation to the concept of ‘agreement conferring jurisdiction’ in Article 23(1) of Regulation (EC) No 44/2001, (2) will allow the Court to survey some fundamental issues in the domain of prorogation of jurisdiction under that regulation.
Legal framework
2. Article 1 of Regulation (EC) No 593/2008, (3) headed ‘Material scope’, provides in its second paragraph:
‘2. The following shall be excluded from the scope of this Regulation:
…
(e) arbitration agreements and agreements on the choice of court;
…’
3. Chapter II of Regulation No 44/2001 is headed ‘Jurisdiction’. Section 7 thereof, entitled ‘Prorogation of jurisdiction’, contains two articles (23 and 24). 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. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either:
(a) in writing or evidenced in writing; or
(b) in a form which accords with practices which the parties have established between themselves; or
(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.’
Facts, procedure and questions referred
4. Höszig, the applicant in the main proceedings, is a legal person based in Hungary, while the legal predecessor of Alstom Power Thermal Services (the defendant) (4) is a legal person based in France. Alstom’s legal predecessor wished to invest in power generating plant already established in France under a large-scale programme.
5. Alstom’s legal predecessor invited Höszig, amongst others, to submit a tender, the specifications for which included a list of the parts to be manufactured, which were the subject matter of the contract, a description of the technical requirements in that regard and the general conditions of contract applied by Alstom’s legal predecessor in force in December 2008. Alstom’s legal predecessor sent those specifications to Höszig by email of 18 August 2009.
6. Höszig submitted a tender for the execution of the project, on the basis of which the parties concluded various works contracts for the manufacture of metallic structures which were to be made in Hungary and were intended for installation in power generation plants situated in France. The parties concluded the contracts for the project remotely.
7. The first of the contracts, concluded on 16 December 2010 contained a list headed ‘documentation used’ as follows:
‘(1) The present order
(2) Technical specification with reference T91000001 /1200 rev. C.
(3) General conditions of purchase of [Alstom’s legal predecessor] (December 2008)
The documents are applicable in that order.’
8. On the last page of the contract, it was stated that ‘the order lists all the most important documents and information necessary for its execution. You must ensure that you have these documents with the appropriate references and the documents required by them. If you do not have them, do not hesitate to request the missing documents from us in writing’.
9. The last paragraph of the contract stated that ‘the supplier declares that he has read and accepts the conditions of this order, the general conditions in force as annexed and any conditions of framework agreements or contracts’.
10. Pursuant to Clause 23.1 of the ‘general conditions of purchase’, headed ‘applicable law and settlement of disputes’, ‘[t]he Order shall be governed by and interpreted in accordance with French law. The application of the United Nations Convention on the International Sale of Goods dated April 11, 1980 is excluded. Any dispute arising out of or in connection with the validity, construction, performance or termination of the Order, which the parties are unable to settle amicably shall be finally and exclusively settled by the courts of Paris, including in the case of a summary procedure, injunctions or conservatory measure.’
11. A legal dispute arose between the parties concerning the performance of the contracts, and Höszig brought legal proceedings before the Pécsi Törvényszék (Court of Pécs) as the court having jurisdiction according to the place of performance.
12. According to the referring court, the applicant cites Article 10(2), concerning ‘consent and material validity’, of Regulation No 593/2008 and argues that it clearly would not be reasonable to determine the effect of its conduct in accordance with French law, because the subject matter of the contract was the products it manufactured, and the place of performance, like the place of manufacture, was the applicant’s place of business in Hungary, with the result that the whole of the process of manufacture until delivery to the party placing the order took place in Hungary.
13. That being so, the applicant submits that, because of the reference to an interpretation in accordance with Hungarian law, the relationship between the ‘general conditions of purchase’ and the contracts must be examined in the light of that law.
14. The applicant argues that — pursuant to Paragraphs 205/A and 205/B of the Hungarian Civil Code, concerning the incorporation of general conditions of contract of purchase into contracts — the ‘general conditions of purchase’ of the legal predecessor of the defendant cannot form part of the contracts concluded between the parties.
15. Therefore, in the view of the applicant, the clause referring to the applicable law included in the ‘general conditions of purchase’ of the legal predecessor of the defendant is not relevant, and, in that connection, Article 4(1)(b) of Regulation No 593/2008 must be applied, according to which a contract for the provision of services is to be governed by the law of the country where the service provider — that is to say, the applicant — has his habitual residence.
16. As regards the jurisdiction of the Hungarian court, the applicant considers — on the basis that the ‘general conditions of purchase’ of the legal predecessor of the defendant do not form part of the contracts for the reasons set out above — that jurisdiction must be determined in accordance with Article 5(1)(a) of Regulation No 44/2001, according to which the matter is to be decided in the courts for the place of performance of the obligation, that is, in the Pécsi Törvényszék (Court of Pécs).
17. The applicant also argues, in the alternative, should the court consider that the ‘general conditions of purchase’ of the legal predecessor of the defendant do form part of the contracts, that the jurisdiction clause included in those general conditions of contract does not meet the requirements of Article 23(1) of Regulation No 44/2001, given that that clause refers to ‘the courts of Paris’. First, Paris is not a Member State, but a city, and, second, the term ‘the courts of Paris’ does not designate a specific court but a collection of courts within the administrative limits of that city.
18. The referring court further explains that the defendant claims that it has no jurisdiction, pointing to Clause 23 of the ‘general conditions of purchase’ of the legal predecessor of the defendant, regarding ‘goods and services’, which governs questions of the applicable law and the settlement of disputes.
19. According to the defendant, the ‘general conditions of purchase’ form part of the contracts and, for that reason, under Clause 23 thereof, the Hungarian court does not have jurisdiction to decide disputes arising from the contracts. Consequently, the defendant asserts that the applicant did not bring its action before a court with jurisdiction to decide on the present case.
20. In the view of the defendant, Article 10(2) of Regulation No 593/2008 allows an examination of the question whether it would be reasonable to apply French law as regards the giving of consent.
21. The defendant considers that, pursuant to Articles 3(1) and 10(1) of Regulation No 593/2008, and having regard to the circumstances, the choice of French law as the applicable law to determine the effect of the applicant’s conduct is entirely reasonable, since the defendant’s legal predecessor was a subcontractor of the successful tenderer in a public procurement procedure conducted in France in connection with a substantial investment in French power generating plants, since French law is the law to which the defendant is subject and since the defendant and the applicant had a wide-ranging contractual relationship in connection with the works arising under that public procurement procedure, made up of multiple contractual instruments, for the manufacture of metallic structures. Consequently, for the reasons set out above, the defendant contends that the designation of the law to which one of the parties, the purchaser, is subject is perfectly reasonable and consistent with commercial practice, especially where the subject matter of the contract of sale will be used in the country of that purchaser, in a highly regulated market; accordingly, it is reasonable to apply French law in order to assess the conduct of the applicant.
22. According to the defendant, the jurisdiction clause set out in Clause 23 of the ‘general conditions of purchase’ is completely consistent with Article 23(1) of Regulation No 44/2001, since the courts of the city of Paris are courts of a Member State (France). The fact that the courts of Paris do not constitute all of the courts of France does not invalidate the jurisdiction clause. The defendant considers that the restrictive interpretation proposed by the applicant does not take into account recital 14 of Regulation No 44/2001, according to which the autonomy of the parties to a contract must be respected.
23. It is in the context of these proceedings that, by order of 4 May 2015, received at the Court on 15 May 2015, the Pécsi Törvényszék (Court of Pécs) referred the following questions for a preliminary ruling:
‘(I) With regard to Regulation [No 593/2008] …:
(1) May a court or tribunal of a Member State interpret the expression “it appears from the circumstances” used in Article 10(2) of Regulation No 593/2008 as meaning that the examination of “the circumstances which must be taken into consideration” in order to determine whether it is reasonable to find that a party did not consent, under the law of the State in which the party has his habitual residence, must cover the circumstances of the conclusion of the contract, the subject matter of the contract and the performance of the contract?
(1)(1) Must the effect referred to in Article 10(2) resulting from the situation described in the preceding paragraph 1 be interpreted as meaning that when, as a result of the reference made [to the law of the country of habitual residence] by a party, it appears from the circumstances that consent to the law applicable pursuant to paragraph 1 was not a reasonable effect of that party’s conduct, the court must determine the existence and validity of the contractual clause pursuant to the law of the country of habitual residence of the party who made the reference?
(2) May the court of that Member State interpret Article 10(2) of Regulation No 593/2008 as meaning that the court has a discretion — having regard to all the circumstances of the case — if, in the light of the circumstances to be taken into consideration, consent to the law applicable under Article 10(1) was not a reasonable effect of the party’s conduct?
(3) If a party — under Article 10(2) of Regulation No 593/2008 — refers to the law of the country in which he has his habitual residence in order to establish that he did not consent, must the court of a Member State take into account the law of the country of habitual residence of that party in the sense that, by virtue of the law of that country, because of the “circumstances” mentioned, the consent of that party to the law chosen in the contract was not reasonable conduct?
(3)(1) In that case, is an interpretation by a court of a Member State contrary to European Union law if, according to that interpretation, the examination of the “circumstances” in order to determine whether it is reasonable to find that a party did not consent covers the circumstances of the conclusion of the contract, the subject matter of the contract and the performance of the contract?
(II) With regard to … Regulation [No 44/2001]:
(1) Is the interpretation of a court of a Member State contrary to Article 23(1) of Regulation No 44/2001 if, according to it, a specific court must be designated or — having regard to the content of recital 14 of that regulation — is it sufficient if the wish or intention of the parties can be deduced unequivocally from the wording?
(1)(1) Is the interpretation of a court of a Member State consistent with Article 23(1) of Regulation No 44/2001 if, according to it, a clause conferring jurisdiction, included in the general conditions of purchase of one of the parties, under which the parties stipulate that disputes arising from or connected with the validity, performance or termination of the order which cannot be settled amicably between the parties are to be subject to the exclusive and final jurisdiction of the courts of a city of a specific Member State — specifically, the courts of Paris — is sufficiently precise, given that the wish or intention of the parties in relation to the designated Member State can be deduced unequivocally from its wording — having regard to the content of recital 14 of the regulation?’
24. Written observations were submitted by Alstom, as well as the Hungarian Government and the European Commission. The latter two also presented oral argument at the hearing on 21 January 2016.
Analysis
Preliminary remarks
25. The referring court seeks to ascertain whether it has jurisdiction to decide the case before it. In so doing, it refers two questions to the Court of Justice. The first question refers to the interpretation of Article 10 of Regulation No 593/2008, whereas the second question seeks guidance on the interpretation of Article 23 of Regulation No 44/2001.
26. Article 1(2)(e) of Regulation No 593/2008 expressly excludes from its scope ‘agreements on the choice of court’. Therefore, that regulation cannot play any role in establishing jurisdiction.
27. What the referring court, in essence, seeks to ascertain is whether Article 23(1) of Regulation No 44/2001 precludes a clause conferring jurisdiction, included in the general conditions of contract of one of the parties, according to which disputes between the parties are to be subject to the exclusive and final jurisdiction of the courts of a particular town or city of a Member State, in this case the city of Paris. It is this question that I propose should be replied to by the Court.
28. In this Opinion, I shall make frequent reference to the Court’s case-law on the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (5) (‘the Brussels Convention’) for, in so far as Regulation No 44/2001 replaces the Brussels Convention, the interpretation provided by the Court in respect of the provisions of the Brussels Convention is also valid for those of Regulation No 44/2001 whenever the provisions of those instruments may be regarded as equivalent. (6) In particular, the Court has already explicitly stated that this is the case as far as concerns Article 17(1) of the Brussels Convention and Article 23(1) of Regulation No 44/2001, which are drafted in almost identical terms. (7)
29. Agreements conferring jurisdiction are of immense importance in international litigation. (8) Article 23, which has rightly been described as one of the most important provisions of Regulation No 44/2001, (9) is intended to give effect to the autonomy of the parties within the system of Regulation No 44/2001. (10) Its aim is to secure legal certainty by making it possible reliably to foresee which court will have jurisdiction. (11) The effect of an agreement conferring jurisdiction is to exclude jurisdiction determined, in particular, by Articles 2 and 5 of Regulation No 44/2001. (12) One can therefore safely assume that Article 23 of Regulation No 44/2001 ‘takes precedence’ (13) over the other provisions of the regulation which concern jurisdiction.
30. Article 23(1) of Regulation No 44/2001 only deals with prorogation of jurisdiction, not with substantive provisions of a contract. The Court has thus held in Benincasa that ‘a jurisdiction clause, which serves a procedural purpose, is governed by the provisions of the Convention, whose aim is to establish uniform rules of international jurisdiction. In contrast, the substantive provisions of the main contract in which that clause is incorporated, and likewise any dispute as to the validity of that contract, are governed by the lex causae determined by the private international law of the State of the court having jurisdiction.’ (14) An agreement conferring jurisdiction is therefore independent of the fate of the contract between the parties. (15)
31. Moreover, the Court has held since Powell Duffryn that the concept of ‘agreement conferring jurisdiction’ in Article 23 of Regulation No 44/2001 must be interpreted not as a simple reference to the national law of one or other of the States concerned but as an independent concept. (16)
32. It is also a matter of settled case-law that Article 23(1) is to be interpreted as meaning that the choice of court in an agreement conferring jurisdiction may be assessed only in the light of considerations connected with the requirements laid down in that article. Considerations pertaining to the links between the court designated and the relationship at issue, about the validity of the clause or about the substantive rules of liability applicable before the chosen court are unconnected with those requirements. (17)
33. The Court has held that, by making the validity of a jurisdiction clause subject to the existence of an ‘agreement’ between the parties, that provision imposes on the court before which the matter is brought the duty of examining, first, whether the clause conferring jurisdiction upon it was in fact the subject of consensus between the parties, which must be clearly and precisely demonstrated, and that the requirements as to form imposed by Article 23 ensure that consensus between the parties is in fact established. (18)
34. In other words, the Court considers that the existence of an agreement can be inferred from the fact that the formal requirements laid down in Article 23(1) of Regulation No 44/2001 have been complied with.
35. Clearly, an agreement, having regard in particular to the question of consensus, is, by its very nature, also composed of subjective elements, beyond purely formal requirements, which leads to the question to what extent such subjective elements are governed by Article 23(1) of Regulation No 44/2001 and if, or rather to what extent, this provision permits reference to national law when it comes to all other requirements of an agreement, such as legal capacity, vitiated consent (19) and so forth. (20) The line of demarcation between the precise elements falling within and outside Article 23(1) of Regulation No 44/2001 is therefore not, as yet, fully clear. (21)
36. That said, I submit to the Court that the present case can be resolved on the basis of existing case-law and does not, in my view, lend itself to general discussion of this line of demarcation.
37. Obviously, it is for the referring court to establish whether the clause conferring jurisdiction was in fact the subject of consensus between the parties. On the basis of the considerations in points 28 to 33 of this Opinion and of the information at my disposal, I would deem this to be the case.
Consensus
38. In order to establish whether a consensus has been reached between the parties, clearly and precisely demonstrated, as required by the abovementioned case-law of the Court, one must examine whether the formal requirements of Article 23(1) have been complied with.
39. Two issues warrant closer examination, namely whether the written form prescribed by Article 23(1)(a) has been complied with and, if so, whether the description ‘courts of Paris’ is sufficiently precise.
40. I would hold that both these questions are to be answered in the affirmative.
41. The Court has held that ‘where a clause conferring jurisdiction is included among the general conditions of sale of one of the parties, printed on the back of a contract, the requirement [that the agreement be in writing] under the first paragraph of Article 17 of the Convention is fulfilled only if the contract signed by both parties contains an express reference (22) to those general conditions’. (23)
42. Clause 23 of Alstom’s legal predecessor’s general contract conditions of contract, to which there was a direct reference in the contract, clearly and unequivocally states that the courts of Paris are to have jurisdiction.
43. As for the question whether the expression ‘courts of Paris’ is sufficiently precise, I would hold that this is the case. The Court has held that Article 17 of the Brussels Convention cannot be interpreted as meaning that it is necessary for a jurisdiction clause to be formulated in such a way that the competent court can be determined on its wording alone. It is sufficient that the clause state the objective factors on the basis of which the parties have agreed to choose a court or the courts to which they wish to submit disputes which have arisen or which may arise between them. Those factors, which must be sufficiently precise to enable the court seised to ascertain whether it has jurisdiction, may, where appropriate, be determined by the particular circumstances of the case. (24) Moreover, as for the argument that there are several courts within the confines of Paris that are potentially competent to decide on matters such as that of the case at issue, the Court has held in Meeth (25) that Article 17 of the Brussels Convention cannot be interpreted as intending to exclude the right of the parties to agree on two or more courts for the purpose of settling any disputes which may arise. (26)
44. There remains the question by which law it is to be determined which Paris court is competent. Here, I would like to refer to Advocate General Capotorti in Meeth, who stated, with respect to a clause designating the courts of a country that ‘[i]t seems to me clear that a clause so worded refers by implication to the system of rules of territorial jurisdiction relating to value [of claim] and subject matter in force in the State in question in order to determine precisely the court before which proceedings must be instituted’. (27) In its judgment in that case (28) the Court appears to take this for granted, and did not further elaborate on the matter. In my view, the same reasoning applies here. It is French procedural law which governs the question of precisely which Paris court is competent. (29)
Regulation (EU) No 1215/2012 and the 2005 Hague Convention
45. As is well known, Regulation No 44/2001 has been replaced by Regulation (EU) No 1215/2012. (30) The latter regulation does not apply to the dispute in the main proceedings under the transitional provisions set out in Article 66 thereof. (31) Nevertheless, given that one of the central aims of the recast was to enhance the effectiveness of jurisdiction agreements, albeit with respect to the relationship with lis pendens, (32) I propose to take a quick glance at the new text.
46. Article 25 of Regulation No 1215/2012 now provides that ‘[i]f the parties, regardless of their domicile, 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, unless the agreement is null and void as to its substantive validity under the law of that Member State’. (33)
47. One could argue that this new formulation now covers all questions of substantive law, including the requirements for an agreement, and that the new formulation therefore attempts to reverse the Court’s case-law on the autonomous determination of whether there is in fact consent. (34) I would nevertheless be cautious in assuming this to be the case. The wording ‘unless’ appears to point to of the validity of an agreement conferring jurisdiction being presumed. (35) Moreover, there is no indication in the legislative history of the recast that it was intended to change or influence the Court’s case-law in this respect. (36) Rather, the wording now chosen appears to reflect the approach taken by Advocate General Slynn in Elefanten Schuh, according to whom, in order to establish the existence of an agreement conferring jurisdiction — in matters not regulated by EU law — (37) one has to refer to the law of the Member State the courts of which have been chosen. (38) By contrast, under Article 23 of Regulation No 44/2001, one should rather take the view that this question is for the law of the Member State the courts of which have been seised of the matter.
48. In any event, there is no indication in the present case that there are doubts as to the substantive validity of the agreement conferring jurisdiction. There is therefore no need to refer to any substantive law.
49. The main reason why the wording cited above has been added to what is now Article 25(1) of Regulation No 1215/2012 is, in my view, to align that article to the text of Article 5 of the Hague Convention on Choice of Court Agreements, (39) which entered into force on 1 October 2015. (40) According to the first paragraph of that provision, ‘[t]he court or courts of a Contracting State designated in an exclusive choice of court agreement shall have jurisdiction to decide a dispute to which the agreement applies, unless the agreement is null and void under the law of that State’. (41)
50. The Union is both a member of the Hague Conference on Private International Law (42) and a contracting party to the Hague Convention on Choice of Court Agreements. (43) Given that the area covered by the convention falls within an area where the Union has, by virtue of Regulations Nos 44/2001 and 1215/2012 exercised its competence, there is an interest in maximum alignment of the convention and the system established by the Union in those regulations.
51. More generally, by virtue of Article 3(b) of the 2005 Hague Convention, a choice of courts agreement which designates the courts of one Contracting State or one or more specific courts of one Contracting State is to be deemed to be exclusive unless the parties have expressly provided otherwise. Moreover, as the Commission rightly points out, the explanatory report on the convention (44) specifically addresses the question of an agreement referring to courts of a State in general or to one or more specific courts in a State. (45)
Conclusion
52. In the light of the foregoing considerations, I propose that the Court answer the second question referred by the Pécsi Törvényszék (Court of Pécs) as follows:
A clause contained in the general conditions of contract of one of the parties and to which reference is made in the contract between the parties that confers exclusive and final jurisdiction on the courts of a specific town or city in a Member State to settle disputes which cannot be settled amicably between the parties is to be interpreted as an ‘agreement conferring jurisdiction’ in the sense of Article 23(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.