In Refcomp SpA v Axa Corporate Solutions Assurance SA [Case C-543/10], the Court of Justice of the European Union (CJEU, previously known as the European Court of Justice) interpreted Article 23 of Council Regulation (EC) No. 44/2001 on jurisdiction (the Article) to mean that where the general terms of a sale of goods contract incorporated a clause conferring jurisdiction, that clause could only be relied upon against the original parties to the contract. It was therefore held that such a clause could not be passed down a chain of contracts to be used against a sub-buyer established in a different Member State of the European Union to that of the original parties, nor could it be used against the insurer subrogated to the rights of that sub-buyer. This interpretation would not apply where the sub-buyer had given its consent to the transfer of the clause.

The proceedings related primarily to the general terms of a sale of goods contract. SNC Doumer (SNC) purchased air conditioning units which contained faulty compressors and was subsequently compensated by its insurer, AXA Corporate Solutions Assurance SA (AXA), whose registered office was in France. AXA utilised its right of subrogation to pursue, amongst others, Refcomp SPA (Refcomp), the manufacturer of the faulty compressors, whose registered office was in Italy. Refcomp contested the jurisdiction of the French court in which the proceedings had been brought on the basis that the original sale of goods contract between Refcomp and Climaventa SpA (Climaventa), the original purchaser, contained a clause conferring jurisdiction on an Italian court. Refcomp's objection to jurisdiction was rejected by the Tribunal de Grande Instance de Paris. The decision was upheld by Cour D’Appel de Paris. On further appeal by Refcomp, the Cour de Cassation stayed the proceedings and referred the question of jurisdiction to the CJEU for preliminary ruling.

In reaching its conclusion, the CJEU stated that a chain of European sales contracts did not involve the transfer of all rights and obligations stipulated in the original contract between manufacturer and purchaser. On the contrary, the chain constituted several different business relationships in which the obligations could vary. As such, it was held that the clause conferring jurisdiction on the Italian courts, agreed in the original contract between Refcomp and Climaventa, could not be used against AXA as the insurer subrogated to the rights of the sub-buyer. The French courts were held to have jurisdiction on the basis that the damage occurred in France. The CJEU emphasised the importance of developing a substantive rule of interpretation of the Article to avoid the varied interpretation of jurisdiction clauses by the national laws of Member States, and to ensure the uniform application of the Article across the European Union.

This case illustrates the continued efforts of the CJEU to harmonise European Union law with that of Member States, and to bring legal certainty to the issue of jurisdiction in contracts agreed between parties located in different Member States. Specifically, it brings certainty to insurers bringing subrogated claims that, in the absence of consent by the insured sub-buyer, jurisdiction will not be determined by a clause contained within any of the contracts in a chain other than the contract entered into by that sub-buyer.