CJEC, January 15, 1987, No 266-85

The court

1 By an order of 5 march 1985, which was received at the court on 30 august 1985, the landgericht ((regional court)) kaiserslautern 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 a question concerning the interpretation of article 5 (1) of the convention.

2 The question arose in the course of proceedings between mr Shenavai, an architect of rockenhausen, federal republic of germany, and mr Kreischer, residing at geleen, netherlands, concerning the recovery of architect' s fees for the preparation of plans for the construction of three holiday homes near rockenhausen.

3 The amtsgericht ((local court)) rockenhausen, before which the action was brought, allowed mr Kreischer' s objection that it lacked jurisdiction on the ground that the place of performance of the obligation to pay architect' s fees was the domicile of the person who commissioned the work; mr Kreischer was domiciled the netherlands, so that the requisite conditions for him to be sued in a german court were not satisfied.

4 Mr Shenavai appealed to the landgericht kaiserslautern which took the view that under german law the place of performance of the architect' s contract was the place where his office was situated and where the planned buildings were to be erected. Thus the place of performance of all the obligations arising under the contract was to be found at the "focal point" of the contractual relationship seen as a whole.

5 The landgericht went on to state that it was not certain that the same interpretation had to be followed as regards article 5 (1) of the convention, since some judgments of the court made international territorial jurisdiction dependent on the place of performance of the contractual obligation on which the judicial proceedings were based - in this case, the obligation to pay the fees. In those circumstances the landgericht deemed it necessary to refer the following question to the court for a preliminary ruling:

"for the purposes of article 5 (1) of the convention of 27 september 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, is the place of performance, in the specific case of a claim for fees by an architect engaged solely in planning work, to be determined by reference to the contractual obligation which forms the actual basis of the legal proceedings (in this case a debt payable under german law at the place where the defendant is domiciled), or by reference to the obligation typical of the contract and characterizing the contractual relationship as a whole (that is to say, the place where the architect has his practice and/or the site of the planned building)?"

6 It should be recalled that article 2 of the convention lays down the general rule that jurisdiction is to be based on the defendant' s domicile, but that article 5 (1) thereof further provides that, in matters relating to a contract, the defendant may also be sued "in the courts for the place of performance of the obligation in question ". As the court observed in its judgment of 6 october 1976 (case 12-76 tessili v dunlop ((1976)) ecr 1473), that freedom of choice was introduced in view of the existence in certain cases of a particularly close relationship between a dispute and the court which may be most conveniently called upon to take cognizance of the matter.

7 In the same judgment the court ruled that the question of the location of the "place of performance" of an obligation was to be determined pursuant to the law governing the obligation at issue and in accordance with the rules on the conflict of laws of the court before which the matter was brought.

8 In another judgment of 6 october 1976 (case 14-76 de bloos v bouyer ((1976)) ecr 1497) the court observed that the convention was intended to determine the international jurisdiction of the courts of the contracting states, to facilitate the recognition of judgments and to introduce an expeditious procedure for securing the enforcement of judgments; it held that those objectives implied the need to avoid, so far as possible, creating a situation in which a number of courts had jurisdiction in respect of one and the same contract, and that article 5 (1) of the convention could therefore not be interpreted as referring to any obligation whatsoever arising under the contract in question.

9 The court concluded that, for the purposes of determining the place of performance within the meaning of article 5, the obligation to be taken into account was that which corresponded to the contractual right on which the plaintiff' s action was based. It ruled that, in a case where the plaintiff asserted the right to be paid damages or sought dissolution of the contract on the ground of the wrongful conduct of the other party, that obligation was still that which arose under the contract and the non-performance of which was relied upon to support such claims.

10 The general rule thereby defined admits, however, of certain exceptions on the ground that "matters relating to a contract" cover relationships of widely differing kinds, both from the viewpoint of their social importance and from that of the obligations entered into. The convention takes account of that diversity by laying down certain special rules which apply to specific contractual relationships. For example, article 16 of the convention provides for exclusive jurisdiction in cases concerning tenancies of immovable property.

11 Guided by similar considerations, the court, in its judgment of 26 may 1982 (case 133-81 ivenel v schwab ((1982)) ecr 1891), held that in the case of a claim based on different obligations arising under a single contract for commercial representation which had been described by the national court as a contract of employment, the obligation to be taken into consideration for the purposes of article 5 (1) of the convention was the obligation which characterized the contract and was normally the obligation to carry out work.

12 In those circumstances, the question submitted by the landgericht must be regarded as seeking to establish in particular whether, in proceedings for the recovery of architect' s fees, the general rule set out in the aforesaid de bloos judgment must apply, under which the obligation to be taken into consideration is the one on which the plaintiff' s action is based, or conversely whether the case displays special features analogous to those which were in evidence in the ivenel case.

13 The argument presented to the court dealt not only with the problem whether regard should be had to the nature of the disputed contract in determining the obligation to be taken into account, but also with the problem raised by the presence, within one and the same dispute, of a number of obligations forming the basis of the judicial proceedings.

14 On the first point the united kingdom advocates a generalized application of the criterion adopted by the court in the abovementioned ivenel judgment with reference to a contract of employment, arguing that the application of that criterion to all contracts for professional services would offer certain advantages. To interpret article 5 (1) accordingly would in particular have the effect of avoiding a situation in which courts in different contracting states had jurisdiction over different claims based on one and the same contract, and would locate the forum in the contracting state whose law was normally applicable to the contract. In a case such as the present one it would have the further advantage of affording a genuine alternative to the forum of the defendant' s domicile - the usual forum under the convention.

15 The german and italian governments and the commission do not subscribe to that point of view. The german government admits that some arguments militate in favour of a single contractual forum but emphasizes, first, that some contracts do not embody a characteristic obligation, for example when the obligations of the two parties are of an equivalent nature (as in the case of a contract of barter), and, secondly, that it was the intention of the authors of the convention, as reflected in certain language versions of article 5 (1) thereof, to establish the forum of the place of performance by reference to the contractual obligation on which the judicial proceedings were actually based.

16 In that connection it should first be observed that contracts of employment, like other contracts for work other than on a self-employed basis, differ from other contracts - even those for the provision of services - by virtue of certain particularities: they create a lasting bond which brings the worker to some extent within the organizational framework of the business of the undertaking or employer, and they are linked to the place where the activities are pursued, which determines the application of mandatory rules and collective agreements. It is on account of those particularities that the court of the place in which the characteristic obligation of such contracts is to be performed is considered best suited to resolving the disputes to which one or more obligations under such contracts may give rise.

17 When no such particularities exist, it is neither necessary nor appropriate to identify the obligation which characterizes the contract and to centralize at the place of performance thereof jurisdiction, based on place of performance, over disputes concerning all the obligations under the contract. The variety and multiplicity of contracts as a whole are such that the above criterion might in those other cases create uncertainty as to jurisdiction, whereas it is precisely such uncertainty which the convention is designed to reduce.

18 On the other hand, no such uncertainty exists for most contracts if regard is had solely to the contractual obligation whose performance is sought in the judicial proceedings. The place in which that obligation is to be performed usually constitutes the closest connecting factor between the dispute and the court having jurisdiction over it, and it is this connecting factor which explains why, in contractual matters, it is the court of the place of performance of the obligation which has jurisdiction.

19 Admittedly, the above rule does not afford a solution in the particular case of a dispute concerned with a number of obligations arising under the same contract and forming the basis of the proceedings commenced by the plaintiff. However, in such a case the court before which the matter is brought will, when determining whether it has jurisdiction, be guided by the maxim accessorium sequitur principale; in other words, where various obligations are at issue, it will be the principal obligation which will determine its jurisdiction. That complication does not, however, arise in the case referred to in the question raised by the landgericht kaiserslautern.

20 The answer to be given to the question referred to the court should therefore be that, for the purposes of determining the place of performance within the meaning of article 5 (1) of the convention, the obligation to be taken into consideration in a dispute concerning proceedings for the recovery of fees commenced by an architect commissioned to draw up plans for the building of houses is the contractual obligation which forms the actual basis of legal proceedings.

Costs

21 The costs incurred by the government of the federal republic of germany, the united kingdom, the government of the italian republic, and the commission of the european communities, which have submitted observations to the court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds,

The court

In answer to the question referred to it by the landgericht kaiserslautern by order of 5 march 1985, hereby rules:

For the purposes of determining the place of performance within the meaning of article 5 (1) of the convention of 27 september 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, the obligation to be taken into consideration in a dispute concerning proceedings for the recovery of fees commenced by an architect commissioned to draw up plans for the building of houses is the contractual obligation which forms the actual basis of legal proceedings.