Jurisdiction of the Italian Courts in International Sale of Goods Agreements CSIG
An Italian company sued a French company before an Italian court in relation to an agreement for the sale of yarn. The claimant alleged that the goods purchased were faulty. It sought a reduction in the purchase price and an order for damages.
The French defendant claimed that the Italian court lacked jurisdiction, arguing that the general conditions of contract printed on the back of its invoices provided for the exclusive jurisdiction of Hazenbrouck Commercial Court in France. The defendant maintained that the choice of jurisdiction clause was valid under the EU Regulation on Jurisdiction, Recognition, and Enforcement of Decisions in Civil and Commercial Matters (44/2001). The defendant requested a preliminary ruling on jurisdiction by the Supreme Court, as permitted under the Code of Civil Procedure.
The claimant contended that it had had no knowledge of the seller's general conditions of sale nor had it expressly accepted them in writing. It relied on the view that invoices are simply accounting records, not contractual documents. Moreover, as the agreement had been made in 2000, it maintained that the Brussels Convention, not the regulation, applied, and that the Italian courts had jurisdiction under the convention.
The court delivered its ruling on September 27 2006 (Order 20887) and established that the Italian courts lacked jurisdiction.
The court explained that the regulation should apply, notwithstanding the fact that the purchase and sale agreement had been made in 2000 (i.e., before the regulation came into force). The court found that, pursuant to Article 66 of the regulation, the latter applies to legal proceedings instituted after its entry into force (i.e., on or after March 15 2002). Italian procedural law provides that proceedings are instituted when the writ of summons is served - the writ was served after March 15 2002 in this case.
The court examined Article 23 of the regulation, which governs choice of jurisdiction and provides that a valid agreement-conferring jurisdiction on the courts of a state must be:
1 In writing or evidenced in writing;
2 In a form which accords with practices established between the parties; and
3 In a form, which accords with widely, known and regularly observed practices of international trade or commerce.
The court held as follows:
If the choice of jurisdiction clause is contained in the general conditions of contract, the clause is valid only if a contractual document making express reference to the general conditions is executed by both parties.
If a party signs a contractual document, which does not, refer to the general conditions of contract, such conditions do not apply, notwithstanding that they were drafted by the party that produced the contractual document.
Even if the general conditions are printed on the back of the contractual document, they do not apply unless expressly mentioned in the contract form - the execution of the contractual document is not proof of acceptance of the general conditions.
There was no established practice between the parties.
The French company had offered no evidence that the acceptance of general conditions printed on the back of invoices was a widely known and regularly observed practice of international trade or commerce. The burden of proof lies with the party, which contests the jurisdiction of the court, and the party had failed to provide such proof.
Having established that there was no valid choice of jurisdiction, the court went on to consider the regulation's general rules on the question. Article 5 provides that, in matters involving the sale of goods, a person domiciled in an EU member state may be sued in another member state in the courts of the place where, under the contract, the goods were delivered or should have been delivered. Therefore, the court had to consider whether the place of delivery is the place where the goods come into possession of the purchaser or where the goods are handed over to the first carrier for transmission to the purchaser
The court held that, in light of the regulation's aim of achieving general applicability of judgments in civil and commercial matters, this question should be answered not based on national laws, such as the Civil Code, but rather with reference to uniform international norms. Therefore, the relevant statute was the United Nations Convention on Contracts for the International Sale of Goods 1980, which has been ratified by and is enforceable in Italy. Article 31 of the convention provides that, if the seller is not bound to deliver the goods to a particular place, it be obliged to hand over the goods to the first carrier for transmission to the purchaser.
There was no specific agreement between the parties as to the place of delivery and the goods had been handed over to carriers in France and Belgium, not in Italy. The court therefore upheld the French company's motion and declared that, pursuant to Article 5 of the regulation, the Italian courts had no jurisdiction.