The Court of Justice of the European Union (CJEU) has held in Fofitec AG v Ritrama SpA [2012] C-133/11 that an action for a negative declaration seeking to establish the absence of liability in tort is within the scope of Article 5(3) of the Brussels Regulation, thereby harmonising the rules of contract and tort.

BACKGROUND

Folien Fischer AG and Fofitec AG (the Claimants), based in Switzerland, and Ritrama SpA, based in Italy, were all active in the laminated goods sector. In March 2007, Ritrama accused the Claimants of being anti-competitive, by virtue of their distribution policy and refusal to grant patent licences. In response to this, the Claimants brought an action before the German court for a negative declaration, stating i) they were not required to stop trading; ii) that Ritrama had no right to terminate the Claimant’s businesses by virtue of their trading practices, nor to obtain compensation based on their sales practices; and iii) they were under no obligation to grant licences for their patents. The action for negative declaration was dismissed in the court of first instance on appeal on the basis that the German court did not have jurisdiction.

The Brussels Regulation is the primary instrument under European law that determines the jurisdiction of an action. The default position is that an action should be brought in the European territory where the defendant is domiciled. Article 5(3) provides that a person may also, in matters relating to tort, be sued in the courts of the country where the harmful event occurred or may occur.

The lower German court held that Article 5(3) of the Brussels Regulation cannot be applied in the case of an action for negative declaration, since the very purpose of the action is to establish that no tort, in this case infringement of competition law, has been committed. The Claimants appealed this point of law to the Federal Court of Justice in Germany, raising the question of whether Article 5(3) of the Brussels Regulation extends to matters in respect of an action for a negative declaration.

In April, Advocate General Jääskinen (the AG) issued his opinion on the referral, deciding that it was not possible to rely on Article 5(3) where a claimant was seeking a declaration of non-liability in tort. His reasoning was based on the fact that it is difficult to identify the Member State that has a connection with the dispute, and suggested that if jurisdiction could be established on this basis, it would encourage bad faith, “torpedo” actions.

DECISION

The CJEU, decided not to follow the opinion of the AG, and held that an action for a negative declaration seeking to establish the absence of liability in tort is within the scope of Article 5(3) of the Brussels Regulation.

The CJEU highlighted the fact that the concept of legal certainty and the requirement to ensure forseeability of jurisdiction was unaffected by whether the party is claimant, or defendant or vice versa. The CJEU determined that this case would have related to the same matters if the Claimants had sought the establishment of liability instead of a negative declaration. The Tatry v The owners of the ship Maciej Rataj [1994] C-406/92 ECR I-5439, was cited as precedent for the CJEU determining that an action seeking to have a defendant held liable for loss has the same cause of action as a claim brought by a defendant seeking a declaration that it is not liable.

COMMENT

This controversial issue has divided academic opinion and given rise to conflicting national case law within Europe. As such, it is perhaps not surprising that the CJEU and the AG came to different conclusions. The CJEU’s ruling brings contract and tort rules for negative declarations claims into line with one another. This consistency is regarded by most as a welcome development.