2012/5/23 - 23 Cdo 1051/2012 (summary)

Resolution of the Supreme Court of the Czech Republic no. 23 Cdo 1051/2012 of May 23, 2012

(Council Regulation (EC) No 44/2001 - INCOTERMS - pragmatic determination of the place of delivery)



The Plaintiff sought that the Defendant be ordered to pay EUR 5,096.20 plus interest (the proceeding was initiated after May 1, 2004). On August 15, 1994, the Plaintiff and the Defendant entered a contract of sale, which was undoubtedly a contract with an international element, since the area of business activity, as defined in the contract, was the Federal Republic of Germany, which is where the location of unloading was situated as well. The court of first instance, a Regional Court (CZ), as well as the appellate court, a High Court (CZ), applied the Brussels I Regulation in their decisions and ruled that the Czech courts did not have jurisdiction to hear the case neither under Article 22 nor under Article 23(1) nor under Article 2 of that Regulation. The courts of both instances applied Article 5(1)(b) of the Brussels I Regulation, and inferred that because of the place of performance (the Federal Republic of Germany), the Czech courts did not have jurisdiction to hear the case under Article 5 of the Brussels I Regulation either.

The Supreme Court of the Czech Republic assessed that the courts of both instances did not deal with the interpretation of the general term of delivery (INCOTERMS), since they were first supposed to deal with what place of delivery of the goods was actually specified in the contract. The Supreme Court held that without appropriate interpretation of the content of the term of delivery, it was not possible to infer that the place of delivery of the goods, as specified in the contract, was in Germany. The Supreme Court concluded that if it is possible to determine according to the relevant term of delivery where the seller has performed his obligation to deliver the goods, or if it is possible to determine that according to that term of delivery, only then it is necessary to apply Article 5(1)(b) of the Brussels I Regulation with a view to determining the international jurisdiction. If it is not possible, it is necessary to determine the place of delivery of the goods using another indicator respecting the genesis, objectives and systematics of the Brussels I Regulation, and it is necessary to follow the principle of “pragmatic determination of the place of delivery” using factual findings. For the above reasons, the Supreme Court of the Czech Republic vacated the decisions of the courts of both instances and remanded the case for further proceedings.