Jurisdiction on international sale of goods involving an Italian seller

Published 05 April 2017

Decision: Decision No. 3558/2017 by the Joint Sections of the Court of Cassation

In international sale of goods involving an Italian seller, if the parties did not rule jurisdiction, but explicitly agreed about the actual place of delivery in a EU Country different from Italy, Italian Courts lack jurisdiction.

The concept of “place in a Member State where, under the contract, the goods were delivered or should have been delivered” mentioned in art. 5 of Regulation No 44/2001 must be understood as the place where the actual, physical final delivery of the goods - that marks the acquisition of material availability (and not only legal) by the buyer - has to be performed, with the effect of releasing the seller.

Under this respect, art. 5 of the regulation prevails on the Vienna Convention (whose art. 31, mentioning the delivery to the carrier, simply rules the duties and rights of parties, but not the jurisdiction).

Keywords: #internationalsaleofgoods; #italylaw; #jurisdiction; #preliminaryruling;

The case.

An Italian company served an injunctive decree (order to pay) to a Dutch company, following to supplies of jewelry items.

The Dutch company filed opposition, raising the following objections: preliminarily, the lack of jurisdiction by the Italian court; secondarily, the territorial incompetence of the court; then the declaration of breach of contract y the Italian seller.

During the opposition procedure, the Dutch buyer raised the preliminary ruling about jurisdiction, through appeal to the Court of Cassation in Italy, based on art. 41 of the civil procedure code.

The Italian buyer claimed some procedural issues, as well as the inadmissibility of the appeal because the Dutch company filed a counterclaim, thus implicitly accepting the jurisdiction of Italy.

The Supreme Court found the appeal to be just.

Main relevant jurisprudence.

Decision no. 24244/2015 – Joint sections of the Court of Cassation

Decision no. C-381/08 – EU Court of Justice (Car Trim – Keysafety, points 60 and 61)

Decision no. C-87/10 – EU Court of Justice (Electrosteel Europe s.a.)

The decision.

The Italian Court of Cassation, in accordance with the jurisprudence of the EU Court of Justice, has recalled its previous decisions where the jurisdiction issue in international sale of goods has been examined.

In civil and commercial areas, if the parties did not explicitly agreed about jurisdiction, this is ruled by Council Regulation (EC) No 44/2001 (of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, now replaced by Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters).

Accordingly to the EU Court, that the Italian Court of Cassation supports, the concept of “place in a Member State where, under the contract, the goods were delivered or should have been delivered” mentioned in art. 5 of Regulation No 44/2001 must be understood as the place where the actual, physical delivery has to be performed, with the effect of releasing the seller.

Under this respect, art. 5 of the regulation prevails on the Vienna Convention (whose art. 31, mentioning the delivery to the carrier, simply rules the duties and rights of parties, but not the jurisdiction).

Therefore, in respect of the international sale of goods, the “place in a Member State where, under the contract, the goods were delivered or should have been delivered” needs to be identified with economical criteria, in relation to the final delivery of the goods, that marks the acquisition of material availability - and not only legal - by the buyer.

Therefore, the Supreme Court found the appeal of the Dutch company to be just.

Comments.

When an Italian seller is involved in international sale of goods, if the parties did not rule jurisdiction, this might be an issue: if the parties explicitly agreed (and this must be actually and formally done, general terms on delivery notes and/or invoices are not enough) about the actual place of delivery in a EU Country different from Italy, Italian Courts lack jurisdiction.

The parties who just referred to Incoterms may also have an issue, because if they did not explicitly and clearly state and agree about the place of delivery, objections may arise.

Vienna Convention mentions the delivery to the carrier, but this simply rules the duties and rights of parties, not jurisdiction: this convention sets the terms of international sale of goods under the “material” discipline.

If parties did not rule jurisdiction, then Regulation No 44/2001 (nor Regulation 1215/2012) must be referred to, and for this purpose the connecting factor set by art. 5 has been interpreted as the place where the actual, physical final delivery of the goods - that marks the acquisition of material availability (and not only legal) by the buyer - has to be performed, with the effect of releasing the seller.

Relevant Provisions:

Council Regulation (EC) No 44/2001 (now replaced by Regulation No. 1215/2012)

Article 5

A person domiciled in a Member State may, in another Member State, be sued:

1. (a) in matters relating to a contract, in the courts for the place of performance of the obligation in question;

(b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be:

- in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered,

- in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided,

(c) if subparagraph (b) does not apply then subparagraph (a) applies;

2. in matters relating to maintenance, in the courts for the place where the maintenance creditor is domiciled or habitually resident or, if the matter is ancillary to proceedings concerning the status of a person, in the court which, according to its own law, has jurisdiction to entertain those proceedings, unless that jurisdiction is based solely on the nationality of one of the parties;

3. in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur;

4. as regards a civil claim for damages or restitution which is based on an act giving rise to criminal proceedings, in the court seised of those proceedings, to the extent that that court has jurisdiction under its own law to entertain civil proceedings;

5. as regards a dispute arising out of the operations of a branch, agency or other establishment, in the courts for the place in which the branch, agency or other establishment is situated;

6. as settlor, trustee or beneficiary of a trust created by the operation of a statute, or by a written instrument, or created orally and evidenced in writing, in the courts of the Member State in which the trust is domiciled;

7. as regards a dispute concerning the payment of remuneration claimed in respect of the salvage of a cargo or freight, in the court under the authority of which the cargo or freight in question:

(a) has been arrested to secure such payment, or

(b) could have been so arrested, but bail or other security has been given;

provided that this provision shall apply only if it is claimed that the defendant has an interest in the cargo or freight or had such an interest at the time of salvage.