BRUSSELS CONVENTION (Encyclopedia)

BRUSSELS CONVENTION OF 1968 ON JURISDICTION AND THE RECOGNITION AND ENFORCEMENT OF JUDGEMENTS IN CIVIL AND COMMERCIAL MATTERS AND REGULATION (CE) N. 44/2001

General principles

The Brussels Convention of 1968 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (Convention) entered into force on 1 February 1973 between the six founding States of the European Economic Community (Italy, France, Germany, Belgium, the Netherlands and Luxemburg). The Convention provided the criteria for determining the competent judge for procedures in the Member States. Over the years, all new Member States of the European Union adopted the Convention. In 1988, the relationships with the European Free Trade Association (EFTA)1 were regulated through the Lugano Convention, which entered into force for Italy on 1 December 1992 and substantially reproduced the Convention. The adoption of Regulation (EC) No. 44/2001 (Regulation) made it necessary to draw a new Lugano Convention, signed on 30 October 2007 by the European Community and by Iceland, Norway and Switzerland in order to realign the rules applicable within the European Union with those concerning the remaining EFTA States.
The Regulation, which was the first product of the process of “communitarization” of private and procedural international law, thanks to the principle of judicial cooperation introduced by the Treaty of Amsterdam in the new Article 65 of the Treaty of Rome, has substituted and deeply modified the Convention, on the basis of issues arisen during its application and due to the interpretation provided by the European Court of Justice.
Considering that the Regulation has been applied instead of the Convention already for several years, the rest of this work will only refer to the Regulation.

General principles

Application

The Regulation applies to civil and commercial matters2 and is part of the EU private international law system, together with the Regulations "Rome I" and "Rome II", ruling respectively contractual and non-contractual obligations. The matters excluded from its application are: status and legal capacity of natural persons; rights in property arising out of a matrimonial relationship, wills and succession; bankruptcy and similar proceedings; social security and arbitration.
As a general principle, the Regulation applies when the defendant is domiciled in a Member State. Defendants domiciled in third countries can also be subjected to the Convention at certain conditions3.

Jurisdiction

In identifying the competent judge, the Regulation, rather than referring to the domestic rules of the specific States, directly establishes principles allowing the identification of only one competent judge for each controversy.
As a general rule, the jurisdiction lays with the judge of the country of domicile of the defendant (Article 2, paragraph 1). Moreover, other rules provide for optional, alternative and exclusive jurisdictions, also aiming to protect the weaker party. Once the competent State has been identified, the competent judge is determined according to the domestic rules of said State.

Recognition and enforcement of judgements

The system formed by the Regulation and the Lugano Convention ensures that there is a substantially easy circulation of judgements in the geographic area including the European Union and EFTA. Recognition and enforcement of a foreign judgement can only be refused in the cases ruled by Article 34 of the Regulation4.

Interpretation

In 1971, with the Luxemburg Protocol, the Court of Justice was made competent - with powers similar to the ones it holds concerning the EU legislation – to interpret the Convention, while limiting the possibility of referral to the highest jurisdictions (in Italy Corte di Cassazione and Consiglio di Stato) and to other jurisdictions when judging on appeal. The reproduction of the Convention in the Regulation has reconfirmed the powers of the Court of Justice according to the Treaty of Rome. As for the interpretation provided by the Court over the years, it has been mostly based on the independence from national juridical systems, while referring to common general principles.

Main provisions

Jurisdiction: Alternative jurisdictions

The main exception to the principle of the domicile of the defendant is, according to Article 5, paragraph 1, the alternative jurisdiction of the place where the contractual obligation is or shall be executed. With regards to this rule, the concept of contractual matter has been defined by the European Court of Justice5. The place where the obligation shall be executed is identified according to the law regulating the contract, as resulting from private international law rules6.
The Regulation introduced more certainty for the contracts of sales and services, identifying the place of performance respectively with the place of delivery and with the place where the services have been or should have been rendered (Article 5.1).
As for torts, delicts or quasi-delicts, the Regulation establishes the alternative jurisdiction of the place where the harmful event occurred or may occur (Article 5, number 3). This rule has been interpreted as including both the place where the damage occurred and the place where the harmful event happened, taking into account the initial direct damage, but not the consequential damages7.
In the case of several defendants, the defendant domiciled in a contracting State can be convened in a different contracting State where another defendant is domiciled (Article 6, number 1). Following the principles developed by the European Court of Justice with regards to the Convention, it is further established that this rule can be utilised when the claims are so closely connected that it is necessary to treat them together in order to avoid irreconcilable judgements.

Article 6 also provides for the following alternative jurisdictions:

i) For actions on a warranty or guarantee, the court seised of the original proceedings "unless these  were instituted solely with the object of removing them from the jurisdiction of the court which would be competent in their case";
ii) For counter-claims arising from the same contract or facts, in the court of the original claim;
iii) For contractual matters, if the action can be combined with an action against the same defendant and concerning rights in rem in immovable property, in the court of the Member State where the property is located.

Prorogation of jurisdiction

Article 23 grants the parties the right to derogate from the jurisdiction resulting from the above rules. If the derogation is stipulated according to the forms provided in the Regulation8, it provides exclusive competence – unless the parties agree otherwise – to the judge or judges for the current or future controversies arising from the juridical relationships under consideration. Case law in various States recognised that this rule prevails over the disciplines of single Member States providing for exclusive jurisdiction for their judges. The only limitations are those provided for the protection of workers by Article 17. It is considered admissible for the derogation clause to refer to more than one judge, or to be stipulated after the conclusion of the contract.
Finally, except for the case of exclusive jurisdictions, the defendant who appears before a court tacitly accepts its competence, unless he/she appears to contest the jurisdiction (Article 24).

Exclusive jurisdictions

Article 22 lists various exclusive jurisdictions independent from the domicile of the defendant. Exclusive competence is granted, with some specifications: to the courts of the Member State in which the property is situated in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property; to the courts of the Member State in which the company, legal person or association has its seat 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; to the courts of the Member State in which the register is kept in proceedings which have as their object the validity of entries in public registers; to 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 in proceedings concerned with the registration or validity of patents, trademarks, designs, or other similar rights required to be deposited or registered; to the courts of the Member State in which the judgment has been or is to be enforced in proceedings concerned with the enforcement of judgments.
 
Lis pendens and related actions

As per Article 27 of the Regulation, where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, the competence is given to the first judge seised, if his/her competence is established. With regards to the Convention, the concept of lis pendens has been interpreted by EU and national case law as quite wider than in the Italian law, in compliance with the principle – confirmed by the European Court of Justice - that the concept is to be interpreted independently of domestic legislations and considering particularly the goal of avoiding parallel proceedings in different Member States and the consequent possibility of irreconcilable judgements9.
In the case of related actions pending before courts of different Member States, Article 28 recognises the possibility for the judge seised subsequently to suspend the proceedings. The notion of related action is reported in paragraph 3 of the same article, according to which "…actions are deemed to be related where they 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".
Article 30 of the Regulation, differently from the Convention, and in order to avoid the risk of relevantly different treatments for subjects domiciled in different Member States, provides for uniform rules to identify the moment when the court is seised10.

Recognition and enforcement

Chapter III of the Regulation (Articles 32 to 56) concerns the recognition and enforcement of judgements and the related actions. The Regulation is characterised by a simplification of procedures, with a reduction to the minimum of the possible reasons for refusing recognition.

Recognition and enforcement: cases of non recognition

The Regulation prescribes (Article 34) three possible cases of non recognition of judgements rendered in a different Member State: (i) contrariety to public order; (ii) violation of certain rights of defence; (iii) contrariety to a judgement given between the same parties.
As for contrariety to public order, which is an institute to be used only in exceptional cases, the Jenard Report to the Convention had clarified that the refusal could be based on the contrariety to the public order only when concerning the execution, not the judgement. The Regulation emphasises the exceptionality of the case by specifying that the contrariety shall be manifest.
The protection of the right of defence concerns only the defendant in default of appearance, who can oppose recognition if the document that instituted the proceedings or an equivalent document was not served or was not served in such a way to enable them to arrange their defence. As for the second circumstance, EU case law has established that sufficiency of the time for arranging the defence is to be evaluated case by case.
The contrariety to a previous judgement between the same parties and in the Member State where recognition is sought also includes judgements that, although concerning different objects, would cause contradictory effects or are based on irreconcilable evaluations on the existence or effects of a certain relationship. The European Court of Justice has clarified that this rule applies also to summary judgements11.
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1EFTA included, at the time of signing of the Lugano Convention, Austria, Finland, Iceland, Norway, Sweden and Switzerland. Austria, Finland and Sweden later became Member States of the European Union. 
2The European Court of Justice has specified, with regard to the Convention (see LTU Lufttrnsportunternehmen GmbH & Co. KG v. Eurocontrol, case 29/76, 14 October 1976) that the notion of civil and commercial matter is to be determined independently from the classifications of the specific national legal systems.
3More specifically: (i) when, in accordance with Article 16, an exclusive jurisdiction is attributed to the judges of a specific contracting State; (ii) when the parties, at least one of which is domiciled in a contracting State, agreed on the competence of the judges of a contracting State; (iii) when the defendant, even if domiciled in a third State, accepted jurisdiction according to Article 24.
4As reported infra, they are: (i) contrariety to public order; (ii) violation of certain rights of defence; (iii) contrariety to a judgement given between the same parties.
5In some of the most relevant cases, the Court clarified that Article 5.1 does not apply to pre-contractual liability (17 September 2002, case C-334/00, Fonderie Officine Meccaniche Tacconi spa v. Heinrich Wagner Sinto Maschinenfabrik GmbH) and, more generally, to cases where there is not a freely assumed obligation (27 October 1998, case C-51/97, Réunion européenne SA v. Spliethoff’s Bevrachtingskantoor BV). The Court also distinguished between the case when a substitute obligation for a breached obligation is concerned – which is subjected to Article 5.1 – or an independent contractual obligation, due independently from contractual violations – subjected to the general principle (6 October 1976, case C-14/76, par. 17). This has been confirmed in various domestic judgements. 
6Consolidated ECJ case law has developed since case 12/76 of 6 October 1976.
7This is particularly important for the case of the unjustified interruption of negotiations, when the event has been considered to occur both at the domicile of the party interrupting the negotiations and at the place where the other party comes to know it, while the damage occurs at the domicile of the party that suffers the negative consequences. See Cass. 3 Mat 2005, n. 9107, Aerasport srl v. T.H. Footwear Europe GmbH.
8The clause shall be formalised in writing, in a form agreed by the parties or – in international trade – according to the usages that the parties knew or ought to know. Written form includes any electronic communication that provides a durable record.
9Judgement 8 December 1987, case 144/86, Gubisch Maschinenfabrik KG v. Palumbo.
10A judge is seised, according to said article: “1. at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the plaintiff has not subsequently failed to take the steps they were required to take to have service effected on the defendant, or 2. if the document has to be served before being lodged with the court, at the time when it is received by the authority responsible for service, provided that the plaintiff has not subsequently failed to take the steps they were required to take to have the document lodged with the court.
11ECJ, 6 June 2002, case C-80/00, Italian Leather Spa v. WECO Polstermõbel GmbH & Co.

Editor: Lucio LANUCARA
© 2009 ASSONEBB