Can a foreign company be sued in Belgium and is the Belgian Court competent to judge upon a litigation between several international players? An interesting case in this respect is the decision of the Commercial Court of Oudenaarde of April 19th, 2016.
An international sales contract concerning color pigment was concluded between a Belgian Buyer and a Spanish Distributor, who in turn bought it from an Italian Manufacturer. According to the Belgian Buyer the delivered goods were defective since they contained a trace of copper, reason why he sued the Spanish Distributor and the Italian Manufacturer before the Belgian court.
The Belgian Buyer declared the contract null and void and claimed damages amounting to +/- € 355.000 from the Spanish Distributor and the Italian Manufacturer. The Spanish Distributor in turn requested to be safeguarded by the Italian Manufacturer against the claim of the Belgian Buyer and requested for the appointment of an expert to investigate the goods. The Italian Manufacturer disputed the competence of the Belgian court.
Whether the Belgian Court is competent to judge the aforementioned claims needs to be determined in accordance with Regulation No. 1215/2012 of the European Parliament and of the council of 12 December 2012 on the jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (hereafter: Regulation No. 1215/2012).
According to article 7 (1) (b) Regulation No. 1215/2012 the Spanish Distributor can be sued by the Belgian Buyer in Belgium because it is a sale of goods and the place where the goods were delivered or should have been delivered was Belgium.
Concerning the claim of the Belgian Buyer against the Italian Manufacturer the competence of the Belgian court was however successfully disputed.
Firstly, by analogy with its claim against the Spanish Distributor, the Belgian Buyer invoked article 7 (1) (b) Regulation No. 1215/2012. However, the court considered that article 7 (1), (b) did not apply in the present case since the Italian Manufacturer had no obligation to deliver the goods in Belgium.
Secondly, the Belgian Buyer requested the application of article 8 (1) Regulation No. 1215/2012. This rule provides the possibility to sue numerous defendants before the same court. However, it requires that at least one of the defendants is domiciled within the jurisdiction of the court before whom the claim is brought and that the claims are closely connected so it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. In the present case the Spanish Distributor nor the Italian Manufacturer had its domicile within Belgium. The place of delivery is irrelevant in this context. Consequently the court denied its competence on the basis of article 8 (1) Regulation No. 1215/2012.
Thirdly, the Belgian Buyer tried to apply article 8 (2) Regulation No. 1215/2012 to lawfully sue the Italian Manufacturer in Belgium. This article offers the option to sue a third party in an action on warranty or guarantee in the court seized of the original proceedings. Also this argument was not accepted by the court. Indeed, the Belgian Buyer filed a direct claim against the Italian Manufacturer and not a third party action on warranty or guarantee. Therefore article 8 (2) Regulation No. 1215/2012 did not apply, and the court denied yet again its competence.
Lastly, the principles of articles 29-30 Regulation No. 1215/2012 did not apply either. These rules aim to avoid irreconcilable judgments from separate proceedings on closely related actions. The Belgian Buyer argued that the action on warranty or guarantee launched by the Spanish Distributor against the Italian Manufacturer implied jurisdiction to hear the main claim of the Belgian Buyer against the Italian Manufacturer. The court did not accept this argument, since the aforementioned rules only apply if the court is competent to hear every action separately. The fact that the court had no jurisdiction to judge the main claim was thus not altered by invoking articles 29-30 Regulation No. 1215/2012.
The demand of the Spanish Distributor to investigate the claim of the Belgian Buyer by a court appointed expert in the presence of the Italian Manufacturer was awarded. Such follows from article 35 Regulation No. 1215/2012 which empowers the court to order any provisional measure available under the law of the Member State, such as an investigation by a court appointed expert, although the court is not competent to judge the substance of the matter.
Authors: Jean-Paul Van Neste & Alexander Cafmeyer