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Lloyd's Maritime and Commercial Law Quarterly

JURISDICTION IN RELATION TO A CONTRACT SPLIT BETWEEN TWO STATES

Leathertex Divisione Sintetici SpA v. Bodetex BVBA
Article 5(1) of the Brussels Convention1 allows for a person domiciled in a Contracting State2 to be sued in the courts of another Contracting State “in matters relating to a contract, in the courts for the place of performance of the obligation in question”. The situation was unclear where a claimant brought a composite claim under a contract, in the courts other than those of the defendant’s domicile, and the claim was founded on obligations to be performed in different jurisdictions. Such a situation arose in Leathertex Divisione Sintetici SpA v. Bodetex BVBA, where both a claim for commissions owing and for compensation in lieu of termination were brought. The European Court of Justice (ECJ) ruled that pursuant to Art. 5(1), the same court does not have jurisdiction to hear the whole of an action founded on two obligations of equal rank arising from the same contract, where one of those obligations is to be performed in another Contracting State.
The facts of Leathertex were quite straightforward. Bodetex was a Belgian company while Leathertex was an Italian company. Under a long-term arrangement, Bodetex had acted as a commercial agent for Leathertex in Belgium and the Netherlands, receiving 5% commission as remuneration. After unsuccessfully asking for commission allegedly owing to it, Bodetex treated the agreement as terminated. It brought proceedings in Belgium for the payment of arrears of commission and compensation in lieu of notice. Article 2 of the Brussels Convention provides that persons domiciled in a Contracting State shall, whatever their nationality, be sued in the courts of that State. Thus, prima facie, the Italian company should be sued in Italy. However, Bodetex sought to bring both claims before the Belgian courts pursuant to Art. 5(1).

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