JURE summary

JURE summary

This case regards a matter of admissibility of a jurisdiction clause brought before the Tribunal da Relação de Coimbra (hereinafter ‘the Court of Appeal’).

A Portuguese company A (hereinafter ‘the plaintiff’) filed a suit in Portugal against a German company B (hereinafter ‘the defendant’). The defendant supplied hydraulic cylinders to the plaintiff for exclusive sale in Portugal and Spain. Their business relationship started in January 2002, and it was only at the end of that month that the defendant asked the plaintiff to sign a pre-written contract for accounting purposes. 17 years later, the defendant terminated the contract without justification. The plaintiff filed suit asking the court to sentence the defendant to pay for damages due to unlawful termination, loss of profit and clientele.

The defendant responded, claiming that not only were the general terms and conditions available on their internet site, but also the written contract signed by the plaintiff expressly attributed jurisdiction to the German courts.

The plaintiff counter-responded, stating that the relationship between the parties was not one of ‘agency’, as per the title of the contract, but of commercial concession. Also, the contract was drafted in advance, imposed by the stronger party, and not freely negotiated by the parties, making the contract and the jurisdiction clause null and void under Articles 12, 15 and 19 of the RJCCG (¹). Having the trial in Germany would create an unreasonable disadvantage to the plaintiff, a small family-owned company, as opposed to the defendant, a large multinational company, thereby making the jurisdiction clause contrary to good faith and consequently null and void under the RJCCG. Article 23(1) of the RJCCG states that, regardless of the law chosen by the parties to regulate the contract, the core section of the RJCCG shall always apply.

The Court of First Instance ruled in favour of the defendant, as did the Court of Appeal, both considering that Article 25 of the Brussels I Regulation (recast) (²) supersedes any national rule, as per Article 8(4) of the CRP (³), which means that the eventual violation of the rules of the RJCCG is irrelevant, as is the question of whether the jurisdiction clause places an undue burden on one of the parties, under the terms of Article 94(3)(c) of the CPC (⁴).

The jurisdiction clause is valid under the terms of Article 25 of the Brussels I Regulation (recast), which has less stringent requirements than national law, and therefore the case should be brought before the German court. Even if the contract signed by the parties was invalid, Article 25 of the Brussels I Regulation (recast) states that ‘the validity of the agreement conferring jurisdiction cannot be contested solely on the ground that the contract is not valid.’

(¹) Decreto-Lei 446/85, de 25 de Outubro, Regime das Cláusulas Contratuais Gerais (Law on unfair terms in contracts).

(²) Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast).

(³) Constituição da República Portuguesa (Constitution of the Portuguese Republic).

(⁴) Código de Processo Civil (Code of Civil Procedure).