In addition to the general principle that a plaintiff should bring proceedings before the place where the defendant has its domicile or principal place of business, several options exist that may allow the plaintiff to bring action before a more convenient forum. Where the plaintiff sues in contract, article 46 of the New Code of Civil Procedure provides that the action may be brought before the court where the delivery of the underlying goods or performance of the underlying services is to take place.

A decision of the French Supreme Court ('Cour de cassation') dated March 16 1999, defines the limits of the application of this provision, which is applicable not only in domestic but also in non-treaty, international disputes.

The court-appointed liquidator of a company having its place of business in Créteil, France had sold the company's assets to purchasers having their respective domiciles or places of business in Monaco. As the purchasers had failed to meet their payment obligations, the court-appointed liquidator commenced proceedings before the Trade Court in Créteil, seeking an order for a provisional payment of the sale price. Whilst the purchasers challenged that the court had jurisdiction, the first instance court retained jurisdiction over the dispute. Before the first instance court, the liquidator had argued that jurisdiction should be decided on the basis of Article 5-1 of the September 27 1968 Brussels Convention on jurisdiction which, in contract claims, provides for jurisdiction of the court for the place where the disputed obligation was to be performed. The Paris Court of appeal upheld the decision on September 20 1996. The Cour de cassation overruled the Court of Appeal's decision.

First, the Cour de cassation ruled out the application of the Brussels Convention on the ground that the rules contained in the Brussels Convention only apply to 'EEC jurisdictions', which is not the case of Monaco.

Second, the Cour de cassation found against the construction that article 46 of the New Code of Civil Procedure the plaintiff suggested should allow for the action to be brought before a court where the payment was to be received. Contrary to the optional rule provided in article 5-1 of the Brussels Convention, the Cour de cassation reminded the plaintiff, the provisions contained in article 46 of the New Code of Civil Procedure do not permit to sue before the court where a payment is to be made. It is made clear by the court that when referring to the delivery of goods or the performance of services, article 46 of the New Code of Civil Procedure refers to the fundamental obligation to be performed against receipt of a monetary consideration and not that monetary consideration itself which cannot serve as a ground for jurisdiction.

For further information on this topic please contact Philippe Blaquier-Cirelli at Jeantet & Associés, Paris office, by telephone (+33 1 45 05 80 08) or by fax (+33 1 47 04 20 41) or by e-mail ([email protected]). Alternatively, contact Elie Kleiman at Jeantet & Associés, New York office, by telephone (+1 212 314 9499), by fax (+1 212 582 3806), or by e-mail ([email protected]).

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