2019/05/21 – 30 Cdo 3684/2018 (summary)

Resolution of the Supreme Court of 21 May 2019, Ref. No. 30 Cdo 3684/2018
(International jurisdiction, provision of services)

The claimant in this case demanded from two defendants a payment of 2 688 000 Czech crowns as damages in the form of loss of profit due to the breach of contractual obligation by the defendants. The contract between them contained the obligation not to supply goods from the range of products of the second defendant to the Czech republic without the authorisation of the claimant. However, this obligation was breached. In the court proceedings, the defendants raised the objection of the absence of international jurisdiction in relation to the second defendant who has its seat in the Slovak republic. The court of first instance, the district court Prague I, assessed the issue under Art. 7 (1) of Regulation (EU) No. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I bis Regulation”). It stated that the contract should be considered as the framework contract of supply of goods and not as a contract of provision of services, as argued by the claimant. According to this court, first indent of Art. 7 (1) (b) of Brussels I bis Regulation should be applied. It was of the opinion that it is the city court in Brno which has jurisdiction in the present case since the place of performance is the seat of the seller, the first defendant. The second defendant could be equally sued, in accordance with Art. 8 (1) of Brussels I bis Regulation, before the same court. The court of first instance thus concluded that the city court in Brno has the jurisdiction. The appeal court, the city court in Prague, amended this decision and stated that the case does not concern a dispute arising from tort, delict or quasi delict, in the meaning of Art. 7 (2) of Brussels I bis Regulation. It confirmed that the case concerns the framework agreement but it assessed the jurisdiction according to the second indent of Art. 7 (1) (b) Brussels I bis Regulation, i.e. according to the place where, under the contract, the services were provided or should have been provided. Thus, the decisive place was not the place where the goods were taken from the first defendant to the claimant but the place where the provision of services occurred. It stressed that the jurisdiction of the court should be established according to the seat of the claimant since it can be reasonably presumed that it should be this place where the agreed distribution services in relation to its suppliers were performed. It concluded that the district court Prague I has the jurisdiction.

The Supreme Court assessed the appellate review filed by the defendant through the prism of the application of § 11 (2) of the Law No. 99/1963 Coll., Code of Civil Procedure (“CCP”) in relation to determining the local jurisdiction of the second defendant on the basis of second indent of Art. 7 (1) (b) of Brussels I bis Regulation. According to the Supreme Court, the provision § 11 (2) of the CCP stipulates that it is the claimant who determines where the proceedings take place if there are at the same time several courts having local jurisdiction. This is decisive due to the fact that if parties do not agree on exclusive jurisdiction, the claimant has a right to choose from amongst the several courts having the local jurisdiction. The Supreme Court in this respect recalled its own case-law, as well as the case-law of the Constitutional Court, confirming the plurality of local jurisdiction of courts. The Supreme Court therefore concluded that there are no reasonable grounds why possibility of choice by the claimant could not be applied even in the case where there are two courts having local jurisdiction, one according to the Brussels I bis Regulation and the second according to the domestic law.