CJEC, 6th chamber, July 6, 1988, No 158-87

The court (sixth chamber)

1 By judgment of 23 march 1987, which was received at the court on 26 may 1987, the gerechtshof, arnhem, referred to the court for a preliminary ruling under the protocol of 3 june 1971 on the interpretation by the court of justice of the convention of 27 september 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (hereinafter referred to as "the convention ") a question concerning the interpretation of article 16 (1) of the convention.

2 The question was raised in the course of proceedings between mr Scherrens and maria Maenhout and others in a dispute as to whether a lease of a farm was concluded orally between mr Scherrens, as agricultural tenant, and maria Maenhout and her (now deceased) husband, as landlords, in respect of a farm consisting of buildings and approximately five hectares of agricultural land situated at maldegem (belgium) and four plots of land, covering altogether twelve hectares, situated in the commune of sluis (netherlands).

3 It appears from the documents before the court that the land in the netherlands is not adjacent to the part of the holding in belgium but is situated seven kilometres away.

4 The dispute over the lease was brought by mr Scherrens not only before the vrederechter (cantonal judge), eeklo (belgium) in respect of the land in belgium but also before the pachtkamer (chamber dealing with leasehold matters) of the kantongerecht (cantonal court) oostburg (netherlands) in respect of the land situated in the netherlands. The kantongerecht was not satisfied that a lease had been concluded and accordingly it dismissed the action, whereupon mr Scherrens appealed to the pachtkamer of the gerechtshof, arnhem.

5 According to the judgment making the reference, the farmer, the appellant, claims that there is a single lease covering both the farm and the plots of land. Taking the view that it was therefore possible that the belgian court and the netherlands court might give contradictory rulings, the gerechtshof considered that it was necessary to settle the question as to which court had jurisdiction under article 16 (1) of the convention in cases such as this. It therefore stayed the proceedings and requested the court to rule on "how article 16 (1) of the convention is to be interpreted with regard to the lease of a farm of which the buildings (with some of the land) are situated in one contracting state (belgium) and (most of) the land in another (the netherlands)".

6 Reference is made to the report for the hearing for a fuller account of the facts of the case, the procedure and the observations submitted to the court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the court.

7 Article 16 of the convention provides as follows:

"1. The following courts shall have exclusive jurisdiction, regardless of domicile;

1. In proceedings which have as their object rights in rem in, or tenancies of, immovable property, the courts of the contracting state in which the property is situated;

...".

8 The question submitted by the gerechtshof seeks to establish whether article 16 (1) of the convention is to be interpreted as meaning that, in a dispute as to the existence of a lease relating to immovable property situated in two contracting states, exclusive jurisdiction over the property situated in each contracting state is held by the courts of that state.

9 It should be recalled that the court, in its judgment of 15 january 1985 in case 241-83 (roesler v rottwinkel ((1985)) ecr 99), ruled that the raison d' être of the exclusive jurisdiction conferred by article 16 (1) on the courts of the contracting state in which the property is situated is the fact that tenancies are closely bound up with the law of immovable property and with the provisions, generally of a mandatory character, governing its use, such as legislation controlling the level of rents and protecting the rights of tenants, including tenant farmers.

10 The court further held that article 16 (1) seeks to ensure a rational allocation of jurisdiction by opting for a solution whereby the court having jurisdiction is determined on the basis of its proximity to the property since that court is in a better position to obtain first-hand knowledge of the facts relating to the creation of tenancies and to the performance of the terms thereof.

11 In the light of those considerations the court concluded in that case, in respect of a letting of immovable property situated entirely within a single contracting state, that article 16 (1) applies to all tenancies of immovable property irrespective of their special characteristics.

12 The same considerations hold good in principle in the case of a tenancy of immovable property whose component parts are situated in two contracting states.

13 Article 16 (1) of the convention must therefore be interpreted as meaning that, in a dispute as to the existence of a lease relating to immovable property situated in two contracting states, exclusive jurisdiction over the immovable property situated in each contracting state is held by the courts of that state.

14 It is, however, possible that cases may arise in which immovable property whose component parts are situated in two contracting states but are the subject of a single lease has special characteristics such as will necessitate an exception to the general rule of exclusive jurisdiction described above. This might occur when, for example, the immovable property situated in one contracting state is adjacent to the property in another state and the property is situated almost entirely in one of those states. In those circumstances it might be appropriate to regard the property as a single unit and deem it to be entirely situated in one of those states for the purposes of conferring on the courts of that state exclusive jurisdiction over the tenancy of that property.

15 Consideration of the documents laid before the court does not, however disclose any such special characteristics in this case, since the component parts of the immovable property at issue situated in the two contracting states are neither adjacent to one another nor situated almost entirely in one of those states.

16 The reply to be given to the question referred to the court is therefore that article 16 (1) of the convention must be interpreted as meaning that, in a dispute as to the existence of a lease relating to immovable property situated in two contracting states, exclusive jurisdiction over the immovable property situated in each contracting state is held by the courts of that state.

Costs

17 The costs incurred by the commission of the european communities, which has submitted observations to the court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the proceedings before the national court, the decision on costs is a matter for that court.

On those grounds,

The court (sixth chamber),

In answer to the question referred to it by the gerechtshof, arnhem, by judgment of 23 march 1987, hereby rules:

Article 16 (1) of the convention of 27 september 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters must be interpreted as meaning that, in a dispute as to the existence of a lease relating to immovable property situated in two contracting states, exclusive jurisdiction over the immovable property situated in each contracting state is held by the courts of that state.