COURT COMPETENT TO DECIDE ON A CLAIM FOR PAYMENT OF DAMAGES CAUSED BY TRANSNATIONAL SALES VIA INTERNET WEB SITES? FOR THE ECJ IS THE COURT OF THE STATE IN WHICH DELIVERY OCCURS!
The European Court of Justice (ECJ) has declared that Art. 5, point 3, Council Regulation n. 44/2001, dated December 22, 2000, concerning the jurisdiction, acknowledgement, execution and implementation of civil and commercial decisions, must be interpreted – in order to ascertain the jurisdiction with reference to a claim for damages based on a breach of the rule prohibiting sales outside of a selective distribution network – in the sense that endowed with jurisdiction are the courts of the State where the damage (i.e. violation of the prohibition) has occurred. It is irrelevant that the internet websites offering goods in breach of the selective distribution network should operate in Member States different from that of the court in which proceedings have been commenced.
The French company Concurrence entered into an agreement with Samsung for the distribution of high range products bearing the Korean mark “Elite”. Such contract provided for a prohibition from selling those products also via the internet.
Samsung subsequently notified Concurrence of the termination of their contractual relation, claiming breach on part of Concurrence of the online sale prohibition provided under the selective distribution agreement. Concurrence, for its part, disputed the validity of such clauses claiming, in particular, that they had not been uniformly applied to all distributors, some of which sold the products at issue on various Amazon websites, without thus provoking any reaction from Samsung.
What followed, then, were two proceedings (one before the Paris Court and the other before the Paris Court of Appeal), with Concurrence losing in both cases, who then appealed to the French Supreme Court. Concurrence argued that the judgment of the Paris Court of Appeal had erroneously declared the lack of jurisdiction of the French courts over proceedings involving proceedings concerning Amazon websites operating outside of the Member State territory. In particular, according to Concurrence, the Paris Court of Appeal had wrongfully failed to ascertain whether the sales system via Amazon internet websites allowed for the shipping of products sold not only within the Member State of origin of the internet website in question, but also within other Member States, and especially in France, which would have justified the finding of jurisdiction of the French courts.
The French Supreme Court decided to suspend proceedings and referred the question to the Court of Justice of the European Union, requesting the exact interpretation of art. 5, para. 4 of Regulation no. 44/2001, with a view to ascertaining the jurisdiction conferred by that provision with regard to a case of claims for damages put forward on the basis of a violation of the prohibition of sale outside of the selective distribution network determined by the offer, on websites operating in different Member States, and concerning products forming the object of said network.
With the judgment herewith considered, the European Court of Justice held that, in such cases, the judge endowed with jurisdiction is that of the Member State in which the damage actually occurs, taking into account the reduction of the volume of sales suffered by the store and his consequent loss of profits, also noting that it is irrelevant that the internet websites in which the offer of objects falling within the selective distribution network should operate in Member states different from that of the court in which proceedings have been commenced.