Article 5(3) of the Brussels Regulation (EU Regulation 44/2001) provides that the courts in the EU Member State where the harm occurs have jurisdiction to hear claims sounding in tort or delict. However, the Regulation does not clarify where the harm occurs, and this can be particularly difficult to determine in cases where business is conducted over the internet, leading to uncertainty for claimants as to where claims should be brought. A recent ruling by the Court of Justice of the European Union (CJEU) provides helpful clarification. In the Concurrence case it ruled that a French court has jurisdiction under Article 5(3) to hear a claim by a French distributor over the sale by Amazon of certain Samsung products outside of a selective distribution network even though those websites are based in other EU countries.
Concurrence SARL (Concurrence) is a retailer in consumer electronics, trading through a shop located in Paris and also through an online sales website. On 16 March 2012, Concurrence concluded a selective distribution agreement (the Agreement) with Samsung to sell its ELITE range, which included a provision prohibiting the sale by Concurrence of Samsung products on the internet.
Only days after the conclusion of the agreement, Samsung accused Concurrence of breaching the Agreement by selling the ELITE products on its website. Samsung wrote to Concurrence on 20 March 2012 informing them that their commercial relationship was terminated and consequently ceased supply of its products to Concurrence. Samsung brought an action against Concurrence for breach of the terms of the Agreement.
In response, Concurrence brought a claim against Samsung in the Tribunal de commerce de Paris seeking an interim order declaring the prohibition in the Agreement of the sale of the ELITE range on the internet unenforceable, the termination invalid and consequently requiring Samsung to continue supplying its products. Concurrence alleged that Samsung had discriminated against it in the manner in which Samsung’s standard terms were applied, since it allowed other distributors to offer Samsung products for sale on the internet. Concurrence was unsuccessful in this action at first instance and on appeal.
Undeterred, Concurrence brought a fresh action in the Tribunal de commerce de Paris against Samsung and, this time, also against Amazon. Concurrence sought an order requiring Amazon to withdraw any offers for sale of Samsung product models from its websites with the top-level domains ending with the EU Member State abbreviations of .de, .uk, .es, and .it. Concurrence alleged that, as Amazon was able to sell Samsung products over its websites in other EU Member States, Concurrence suffered a reduction in its sales in its French store because consumers in France are able to buy Samsung’s goods via those websites instead.
The Tribunal de commerce de Paris held that it did not have jurisdiction to hear the claim against Amazon on the basis that Article 5(3) of the Brussels Regulation precluded it from hearing a case sounding in delict relating to online websites where the commerce involved took place outside France. It also refused to make an interim order against Samsung declaring the prohibition on online sales to be unenforceable. Concurrence lodged an appeal against that decision before the cour d’appel de Paris where, by judgment on 6 February 2014, the order of the Tribunal de commerce de Paris was varied in part by declaring Concurrence’s claims against Samsung inadmissible and dismissing Concurrence’s claims against Amazon.
Concurrence took the claim to the highest court in the French Judiciary, the Cour de Cassation, which referred to the CJEU the question whether article 5(3) of the Brussels Regulation is to be interpreted as meaning that an authorised distributor who considers itself adversely affected by an online marketplace operated in various Member States reselling goods outside a selective distribution network could bring an action in its home state seeking an injunction.
The CJEU held, firstly, that a natural link existed between the French jurisdiction and the dispute as the infringement of the prohibition on resale outside a selective distribution network is governed by French law. Secondly, the alleged damage to Concurrence occurred in France. It was therefore irrelevant that the websites on which the offer of the Samsung products appeared operate in Member States outside of France as long as the events occurring in those other Member States resulted in (or may result in) damage in the jurisdiction of the court seised. The harmful event occurs within the territory of the Member State in which the prohibition on resale operates and the claimant suffers an alleged reduction in sales.
The outcome of this judgment is that the French Court has jurisdiction under Article 5(3) to consider whether Concurrence has suffered harm in France as a result of sales of products on websites based elsewhere in the EU. This ruling provides helpful guidance for potential claimants as to where a claim should be launched, and will be of considerable comfort to businesses which compete with internet sales, providing an opportunity for such businesses to bring proceedings in their home states to seek redress for tortious conduct.