|Judgment -Kleinwort Benson Limited v. City of Glasgow District Council continued|
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Moreover in Kalfelis v. Schröder the court observed at pp. 5585, 5586 that Articles 5 and 6 should be interpreted restrictively and that a plaintiff is always entitled to bring his action in its entirety before the courts of the domicile of the defendant:
In Somafer v. Saar-Ferngas  E.C.R. 2183, in referring to the words of Article 5(5) of the Brussels Convention the European Court also stated that in interpreting Article 5 a wide and multifarious interpretation of the exceptions to the general rule of jurisdiction contained in Article 2 must be avoided, and the Court said at page 2191:
The second limb of Article 5(1) is worded "in the courts for the place of performance of the obligation in question." I consider that these words help to define the meaning of the words "in matters relating to a contract". The European Court has held that "the obligation in question" is a contractual obligation; it is an obligation arising under the contract which the plaintiff is seeking to enforce. Accordingly the wording of the second limb as interpreted by the European Court leads to the conclusion that it is only where a party is seeking to enforce the performance of an obligation contained in a contract (or of an obligation arising from a relationship closely akin to a contract such as membership of an association: see Peters v. ZNAV  E.C.R. 987 referred to later in this judgment) that the action can be brought in the place of performance of that obligation, rather than in the domicile of the defendant. In de Bloos v. Bouyer  E.C.R. 1497 the European court stated at pp. 1508, 1509:
"On the contrary, the word 'obligation' in the article refers to the contractual obligation forming the basis of the legal proceedings.
"This interpretation is, moreover, clearly confirmed by the Italian and German versions of the article.
"It follows that for the purposes of determining the place of performance within the meaning of Article 5, quoted above, the obligation to be taken into account is that which corresponds to the contractual right on which the plaintiff's action is based.
"In a case where the plaintiff asserts the right to be paid damages or seeks a dissolution of the contract on the ground of the wrongful conduct of the other party, the obligation referred to in Article 5(1) is still that which arises under the contract and the non-performance of which is relied upon to support such claims.
"For these reasons, the answer to the first question must be that, in disputes in which the grantee of an exclusive sales concession charges the grantor with having infringed the exclusive concession, the word 'obligation' contained in Article 5(1) of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters refers to the obligation forming the basis of the legal proceedings, namely the contractual obligation of the grantor which corresponds to the contractual right relied upon by the grantee in support of the application."
In Handte v. Traitements Mécano-Chimiques des Surfaces  E.C.R. I-3967 the Court stated at pages 3994, 3995:
"Where a sub-buyer of goods purchased from an intermediate seller brings an action against the manufacturer for damages on the ground that the goods are not in conformity, it must be observed that there is no contractual relationship between the sub-buyer and the manufacturer because the latter has not undertaken any contractual obligation towards the former."
In Custom Made Commercial v. Stawa Metallbau  E.C.R. I-2913 the Court stated at page 2957:
"The Court has ruled that the obligation cannot be interpreted as referring to any obligation whatsoever arising under the contract in question, but is rather that which corresponds to the contractual right on which the plaintiff's action is based (see Case 14/76 de Bloos v. Bouyer  ECR 1497, paragraphs 10 and 13).
"Having allowed an exception in the case of contracts of employment presenting certain special features (see, in particular, Case 133/81 Ivenel v. Schwab  ECR 1891), in paragraph 20 of its judgment in Shenavai, cited above, the Court confirmed that the obligation referred to in Article 5(1) is the contractual obligation which forms the actual basis of the legal proceedings."
A further consideration referred to by the European Court is that the reason why under Article 5(1) a court for the place of performance of the contractual obligation is given jurisdiction is that the bringing of an action in such a court will enable the action to be brought in an efficacious way and the place of performance of the contractual obligation will be the place where the case can conveniently be heard. In Bier v. Mines de Potasse d'Alsace  E.C.R. 1735 the court stated at pages 1745, 1746 that the scheme of conferment of jurisdiction contained in Title II of the Convention:
"This freedom of choice was introduced having regard to the existence, in certain clearly defined situations, of a particularly close connecting factor between a dispute and the court which may be called upon to hear it, with a view to the efficacious conduct of the proceedings."
However in the present case this consideration is not applicable and the "particularly close connecting factor" between the dispute and the English court does not exist, because the action is brought, not to enforce a contract to be performed in England, but to recover monies which are repayable to the plaintiff because the contract never existed and because the plaintiff cannot seek to enforce it. In this case where Kleinwort Benson is suing Glasgow, domiciled in Scotland, for the repayment of monies unjustly retained by Glasgow, there is no "particularly close connecting factor" between the dispute and the court in England, which justifies departure from the general principle the defendant should be sued in the place of its domicile.
The judgments relied on by Mr. Pollock do not, in my opinion, lead to the conclusion that the present action brought by Kleinwort Benson comes within the scope of Article 5(1). Mr. Pollock cited the judgment of the European Court in Peters v. ZNAV  E.C.R. 987 at pages 1002 and 1003:
"It should be noted that multiplication of the bases of jurisdiction in one and the same type of case is not likely to encourage legal certainty and effective legal protection throughout the territory of the Community. The provisions of the Convention should therefore be interpreted in such a way that the court seised is not required to declare that it has jurisdiction to adjudicate upon certain applications but has no jurisdiction to hear certain other applications, even though they are closely related. Moreover, respect for the purposes and spirit of the Convention requires an interpretation of Article 5 which enables the national court to rule on its own jurisdiction without being compelled to consider the substance of the case."
This judgment shows that the words of Article 5(1) can include a consensual relationship between an association and its members which, as Hirst J. observed at first instance, "was manifestly very closely akin to an actual contract," but I do not consider that a claim based on unjust enrichment can be regarded as contractual in the same way as the close links and obligations created by membership of an association were regarded as being contractual in that case.
Mr. Pollock also relied on the judgment of Mr. Moore-Bick Q.C. in DR Insurance Co. v. Central National Insurance Co.  1 Lloyd's Rep. 74 where the learned Deputy Judge was considering the words of Order 11 Rule 1(1)(d) of the Rules of the Supreme Court in relation to a claim brought to "enforce, rescind, dissolve, annul or otherwise affect a contract . . .". Mr. Moore-Bick stated at pages 79, 80: