14 Jan 2018

Jurisdiction clause in cross-border contracts and competition law

In its decision dated 7 October 2015 (Appeal Nr 14-16898), the French Supreme Court interestingly applied case law based on rulings of the European Court of justice (ECJ), namely the decision rendered in the Cartel Damage Claims v Akzo Nobel and Others case (ECJ 21 May 2015, C-352/13).

In the above case, a French authorized dealer of computer products complained about anti-competitive business practices and unfair competition on the part of its Irish contracting party.

While the contract included a clause conferring jurisdiction to Irish courts, the dealer started an action before a Commerce court in France. 

The Irish contracting party then raised a procedural objection, requesting the French court to declare it had no jurisdiction over the matter pursuant to contractual provisions. The Court of appeal paid particular attention to this point.

The Court of appeal decided to grant this request on the ground that ″the intended scope of application of jurisdiction clauses in contracts includes any dispute arising out of contractual performance by the parties″.

Based on Article 23 of Regulation (EC) Nr 44/2001 of 22 December 2000 and above-mentioned ECJ’s decision, the first Civil chamber of the French Supreme Court however quashed the appeal decision on the ground that, in order to be applicable, the jurisdiction clause should expressly refer to ″disputes related to liability incurred as a result of a breach of competition law″.

The fact is that in this case, the jurisdiction clause didn’t include any express reference to competition law.

This decision by the Supreme Court reminds us of how crucial the wording of the jurisdiction clause is for cross-border contracts: to ensure full effectiveness of a jurisdiction clause, it may not be enough to use a standard phrase referring to any dispute arising out of or in connection with the performance of the contract.

Attorney at law