JURE SUMMARY

An Italian company concluded a contract with an Algerian company for the delivery of equipment. In order to guarantee the performance of delivery in accordance with the contract, an Algerian bank issued a bank guarantee, which in turn was guaranteed by an Italian bank. Later, the Italian company brought an action before the Tribunale of Cremona (IT), which was the competent court at the seat of the Italian bank, against both banks as well as the Algerian company. It sought a declaration that the guarantee taken over by the Italian bank expired after the contract was fulfilled in accordance with the terms and all claims of the Algerian bank and the Algerian company in relation to this are extinguished. In addition, it requested that the Italian bank be prohibited from making any payments to the Algerian company and bank. The defendants challenged the international jurisdiction of the Italian courts. The Italian company sought a preliminary ruling on jurisdiction before the Corte di Cassazione (IT). The Corte di Cassazione (IT) holds that the Italian courts have jurisdiction. Firstly, jurisdiction exists over the action against the Italian bank. According Article 6 (1) Brussels Convention, which addresses the forum for jurisdiction over a joinder of parties and which is also applicable in relation to third party States according to Italian conflict of law rules, the Italian courts also have jurisdiction in relation to the two Algerian defendants. According to this provision, a defendant who is domiciled in another State (in this case a third party State) can be sued in the courts for the place where a co-defendant is domiciled. This is conditional on a nexus existing between the actions so that it is desirable that the actions are heard together. This is the case here because all the actions seek a declaration that the plaintiff is not obligated to make payments to any of the three parties after having correctly fulfilled the contract.