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Possible problems concerning choice of forum agreements in European supply chains

February 5, 2018 | Author: | Posted in INTERNET

The jurisdiction for the enforcement of claims may depend on whether a choice of forum agreement was reached between the parties.

GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart, Hanover, Bremen, Nuremberg, Essen and London explain: Particularly in the case of international commercial agreements within the EU, the question of jurisdiction is frequently raised. Thus, the Court of Justice of the European Union (CJEU) had to address this very question recently regarding jurisdiction in the context of supply chains. In its judgment of 7 February 2013 (Az.: C-543/10), it ruled that in answering this question it was of decisive importance whether a clause to that effect had been approved by all participating parties.

The basis of the Court’s decision was an EU supply chain through which a property complex in France was renovated. Compressors were therefore required, which included cooling units from Italy. These were in turn delivered by two intermediaries from Italy and accordingly sold to the renovation firm in France.

When faults subsequently manifested in the cooling units, the Italian manufacturing firm of the cooling units was seemingly sued on the basis of a transferred right to damages by the renovation firm’s insurer based in France. The location was apparently a French court.

The Italian manufacturing firm of the cooling units disputed the jurisdiction of the French court by invoking a choice of forum agreement reached with the manufacturing firm of the compressors in favour of an Italian court.

The CJEU consequently had to settle the question of whether a subsequent purchaser within an EU supply chain has to face a choice of forum agreement. In doing so, the judges came to the conclusion that this can only be the case if the subsequent purchaser has approved this clause. It should be ensured in accordance with EU law that the choice of forum agreement in principle only affects the relationship between the parties which have approved it. Thus, in the view of the judges, this can in principle only be effective vis-à-vis third parties where there is explicit acceptance of the clause.
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Businesses that conclude commercial agreements within the EU should heed this judgment of the CJEU. Where there are uncertainties regarding international agreements, a lawyer should help.

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