claimant has no good reason to sue the defendant but is hoping that by doing so the defendant will, with the aid of Art 6(2), bring the third party to such a forum.

An application for the costs of litigation, made under s 4 of the Courts and Legal Services Act 1990 against a non-party to the litigation (such as a controlling shareholder of a claimant company), amounts to a third party proceeding within the scope of Art 6(2).151

Counterclaims

By Art 6(3), a person domiciled in a member state may also be sued, on a counterclaim arising from the same contract or facts on which the original claim was based, in the court in which the original claim is pending.152 It is probable that the reference to the same contract or facts is to be construed broadly, in the light of the definition of related actions provided by Art 28(3), and thus includes a case where the claimant sues for the price of goods supplied and the defendant counterclaims for damages for infringement or repudiation of an exclusive distribution contract pursuant to which the contract of sale sued on by the claimant was entered into.153 In any event, Art 6(3) is confined to a cross-claim made by a person sued and does not extend to a claim made by a sister company of the defendant.154 It is also limited to a counterclaim against the original claimant; it does not provide for jurisdiction over an additional party joined by counterclaim.155

In the context of monetary claims, the European Court in Danvaern v Otterbeck156 confined Art 6(3) to a true counterclaim, as distinct from a purely defensive set-off. It applies where the defendant, by a separate claim made in the same proceedings, seeks a judgment ordering the plaintiff to pay him a debt, possibly of an amount exceeding that claimed by the plaintiff, even if the plaintiff’s claim is dismissed. In contrast the admissibility of a purely defensive set-off, invoked solely for the purpose of wholly or partially extinguishing the plaintiff’s claim, is governed not by Art 6(3) but by the law of the court seised.

Jurisdiction clauses

Article 23 of the Regulation authorises parties to existing or potential disputes to enter into an agreement designating the court or courts which will be competent to determine such disputes.157 Such agreements are generally referred to as ‘jurisdiction clauses’. Article 23 is a complex provision, which regulates both the formal and essential validity of jurisdiction clauses and their effects. In general, it gives exclusive effect to a valid jurisdiction clause. Article 23 provides:

151See The Ikarian Reefer [2000] 1 WLR 603 (CA).

152See to similar effect r 5(c) of Sched 4 to the 1982 Act (as amended). For English jurisdiction over a counterclaim against a plaintiff who is not domiciled in any EU member state or Lugano Convention country, see Part 20 of the CPR 1998, and Factories Insurance v Anglo-Scottish Insurance (1913) 29 TLR 312.

153See Gianotti v Montuori (1994) unreported, 18 February (French Court of Cassation). Cf per Léger AG in Case C-341/93: Danvaern v Otterbeck [1995] ECR I-2053; and Dollfus Mieg v CDW International [2004] ILPr 12.

154See Dollfus Mieg v CDW International [2004] ILPr 12.

155See Bank of Tokyo-Mitsubishi v Baskan Gida [2004] ILPr 26, at para 189.

156Case C-341/93: [1995] ECR I-2053.

157See also r 12 of Sched 4 to the 1982 Act (as amended); and the Civil Procedure Rules Part 20 and r 6.36, and Practice Direction B, para 3.1(6). A Convention on Choice of Court Agreements was adopted at the Hague Conference on Private International Law on 30 June 2005. Although the Hague Convention 2005 has not yet entered into force, on 26 February 2009 the EC Council adopted Decision 2009/397, authorising its signature on behalf of the European Community, and it was signed accordingly on 1 April 2009; see [2009] OJ L133/1.

(1)If the parties, one or more of whom is domiciled in a member state,158 have agreed that a court or the courts of a member state are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship,159 that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the partieshaveagreedotherwise.160 Suchanagreementconferringjurisdictionshallbeeither:

(a)in writing or evidenced in writing; or

(b)in a form which accords with practices which the parties have established between themselves; or

(c)in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.

(2)Any communication by electronic means which provides a durable record of the agreement shall be equivalent to ‘writing’.161

(3)Where such an agreement is concluded by parties, none of whom is domiciled in a member state, the courts of other member states shall have no jurisdiction over their disputes unless the court or courts chosen have declined jurisdiction.162

(4)The court or courts of a member state on which a trust instrument has conferred jurisdiction shall have exclusive jurisdiction in any proceedings brought against a settlor, trustee or benefi ciary, if relations between these persons or their rights or obligations under the trust are involved.163

(5)Agreements or provisions of a trust instrument conferring jurisdiction shall have no legal force if they are contrary to Articles 13, 17 or 21, or if the courts whose jurisdiction they purport to exclude have exclusive jurisdiction by virtue of Article 22.164

As regards formal validity, the reference in Art 23(1)(a) to an agreement made or evidenced in writing normally requires writing signed by both parties, containing or incorporating by reference a jurisdiction clause. However it is also sufficient if an oral contract contains a specific

158In Case C-412/98: Group Josi v UGIC [2000] ECR I-5925, the European Court emphasised that it is sufficient under this provision that either the plaintiff or the defendant is domiciled in a member state, even if the other party is not domiciled within the member states. Probably the provision applies if any of the parties to the agreement on jurisdiction was domiciled in a member state either at the time when the agreement was concluded, or at the time of the institution of the action in which the agreement is relied on.

159The relationship between a company and its shareholders as such is sufficiently particular for this purpose; see Case C-214/89:

Powell Duffryn v Petereit [1992] ECR I-1745.

160A court whose jurisdiction is excluded by a clause has the same powers as the court whose jurisdiction is chosen by the clause to determine its validity under Art 23; see per Léger AG in Case C-159/97: Castelletti v Trumpy [1999] ECR I-1597. In England, the burden lies on a defendant who relies on a foreign exclusive jurisdiction clause to show a good arguable case for its existence and validity; see Bank of Tokyo-Mitsubishi v Baskan Gida [2004] ILPr 26, at para 194. See also, as to the effect of the slightly different provisions on exclusivity contained in the Brussels and Lugano Conventions, Case 23/78: Meeth v Glacetal [1978] ECR 2133; Case 22/85: Anterist v Crédit Lyonnais [1986] ECR 1951; Kurz v Stella Musical [1992] Ch 196; Kitechnology v Unicor [1995] FSR 765 (CA); Lafi v Meriden [2000] 2 Lloyd’s Rep 51; Mercury Communications v Communication Telesystems International [1999] 2 All ER (Comm) 33; and Insured Financial Structures v Elektrocieplownia Tychy [2003] QB 1260 (CA). On non-exclusivity under the Regulation, see Evialis v Siat [2003] 2 Lloyd’s Rep 377.

161This does not in itself address the need for a signature, or the sufficiency of an electronic signature, but Art 5 of Directive 1999/93, [2000] OJ L13/12, and in England s 7 of the Electronic Communications Act 2000, may apply. See also Chapter 4 for further on electronic signatures.

162In this situation, the chosen courts must determine the existence and exercise of their jurisdiction in accordance with their own law, as provided for by Art 4. Where the English High Court is chosen, it will in its discretion accept jurisdiction, unless the defendant establishes strong grounds showing that it would be unjust to do so: see the Civil Procedure Rules Part 20 and r 6.36, and Practice Direction B, para 3.1(6); The Chaparral [1968] 2 Lloyd’s Rep 158; and Sinochem v Mobil [2000] 1 Lloyd’s Rep 670.

163On trusts, see also Art 5(6).

164Articles 13, 17 and 21 apply to insurance, consumer and employment contracts. Article 22 deals with exclusive jurisdiction by reason of subject matter (e.g., of the situs over proprietary rights in land). The Regulation prevents a member state from imposing additional restrictions relating to the subject matter in respect of which a jurisdiction clause is permitted; see Case 25/79: Sanicentral v Collin [1979] ECR 3423.

reference to jurisdiction and its conclusion is followed by the issue of a confirmatory document by one party to the other, and the failure of the recipient to object within a reasonable time.165 Moreover, as the European Court recognised in MSG v Les Gravières Rhénanes166 and Castelletti v Trumpy,167 a confirmatory document that does not satisfy Art 23(1)(a) will now be effective under Art 23(1)(c) if it accords with a usage regularly observed in the relevant branch of international commerce. The European Court accepted that such a usage may exist where one of the parties to the contract has remained silent in the face of a commercial letter of confirmation from the other party containing a pre-printed jurisdiction clause, or where one of the parties has repeatedly paid without objection invoices issued by the other party containing such a clause, or where a jurisdiction clause is included among the clauses printed on the back of a bill of lading, the front of which has been signed by the parties. Moreover, compliance with a relevant usage will establish the existence of an agreement on jurisdiction, as well as its formal validity.168 The crucial issue relates to the existence of a usage, and this must be determined neither by reference to the law of a member state nor in relation to international trade or commerce in general, but rather under an independent Union standard and in relation to the branch of international trade or commerce in which the parties to the contract operate. Such a usage exists where a certain course of conduct is generally and regularly followed by operators in the relevant branch when concluding contracts of a particular type, and the relevant branch must be identified in terms of both substance and location. Actual or presumptive awareness will be established whenever, in the branch of trade or commerce in which the parties operate, a particular course of conduct is generally and regularly followed in the conclusion of a particular type of contract, so that it may be regarded as an established usage.169

Although, in general, an agreement on jurisdiction operates only between the parties thereto, the European Court has recognised two exceptions. First, where a substantive contract – for example, of insurance – is concluded wholly or partly for the benefit of a third party and it contains a jurisdiction clause which is also designed to benefit the third party and which is validly agreed to by the contracting parties in accordance with Art 23, the third party may take advantage of the clause, even though he himself has not agreed to it in a manner contemplated by Art 23.170 Second, a jurisdiction clause that was contained in a substantive contract and was validly agreed to by the original contracting parties also operates in favour of and against a third person who, under the national law applicable under the conflict rules of the court seised, has succeeded to the rights and obligations of one of the parties under the contract, such as a subsequent holder of a bill of

165See Case 24/76: Estasis Salotti v RÜWA [1976] ECR 1831; Case 25/76: Segoura v Bonakdarian [1976] ECR 1851; Case 71/83: Tilly Russ v Haven [1984] ECR 2417; Case 221/84: Berghoefer v ASA [1985] ECR 2699; and Case 313/85: Iveco Fiat v Van Hool [1986] ECR 3337.

See also Credit Suisse Financial Products v SGE [1997] ILPr 165 (CA); 7E Communications v Vertex Antennentechnik [2007] 2 All ER (Comm) 798 (CA); Lafi v Meriden [2007] 2 All ER (Comm) 798; Stryker Corp v Sulzer Metco [2006] IEHC 60; AIG Group v The Ethniki [2000] 2 All ER 566 (CA); Dornoch Ltd v Mauritius Union Assurance Co Ltd [2006] 2 Lloyd’s Rep 475 (CA); Siboti v BP France [2003] 2 Lloyd’s Rep 364; and Bols Distilleries v Superior Yacht Services [2007] 1 Lloyd’s Rep 683 (PC).

166Case C-106/95: [1997] ECR I-911.

167Case C-159/97: [1999] ECR I-1597.

168See also Deutsche Bank v Asia Pacific Broadband Wireless Communications [2009] 2 All ER (Comm) 129 (CA), indicating more generally that satisfaction of any of the formal requirements specified by Article 17 – for example, where the jurisdiction clause is in writing – will be enough to ensure that the necessary consensus is established in respect of the jurisdiction clause.

169See also as to the effectiveness between a company and its shareholders of a jurisdiction clause contained in the corporate constitution, Case C-214/89: Powell Duffryn v Petereit [1992] ECR I-1745. On bilaterally established practices, see The Kribi [2001] 1 Lloyd’s Rep 76; Knauf v British Gypsum [2001] 2 All ER (Comm) 332, reversed on other grounds [2002] 1 WLR 907 (CA); Thomas Cook v Hotel Kaya [2009] EWHC 720 (QB); and Calyon v Wytwornia Sprzetu Komunikacynego PZL Swidnik [2009] EWHC 1914 (Comm).

170See Case 201/82: Gerling v Treasury Administration [1983] ECR 2503; and per Léger AG in Case C-159/97: Castelletti v Trumpy [1999] ECR I-1597.

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lading.171 More generally, in Glencore v Metro,172 Moore-Bick J held that an assignee of a contractual debt is bound by a jurisdiction clause contained in the contract from which the debt arises and agreed between the original parties in accordance with the requirements of Art 23; and, in The Kribi,173 Aikens J held that, as against a carrier under a bill of lading contract, a cargo insurer is in the same position as its insured.

In Elefanten Schuh v Jacqmain,174 the European Court ruled that the formal requirements specified by Art 23 are exhaustive. Thus, it is not open to a member state to require additional formalities, such as that a jurisdiction clause be expressed in a particular language. This approach was confirmed in Castelletti v Trumpy175 where the court ruled that, in the context of the provision permitting a form according with international commercial usages, the acceptability of the language used (in this case, the English language for a bill of lading between an Argentinian shipper and a Danish shipowner in respect of the carriage of goods from Argentina to Italy) depends on whether its use accords with such usages. Presumably, however, if a party abusively chose to use a language that he knew the other would not understand, there would be no ‘agreement’, under an independent EU standard, within the meaning of Art 23.176 Somewhat similarly, the French Court of Cassation has ruled a jurisdiction clause invalid under Art 23, because it was printed in characters so small as to be unreadable.177

Article 23 does not require any objective connection between the parties or the subject matter of the dispute and the territory of the court chosen.178 Thus, it permits parties to choose a ‘neutral’ forum – for example, the choice of an English court by a French seller and a German buyer of goods to be manufactured and delivered in France and paid for in Germany. Art 23 is likely to apply even if, at the date of the agreement on jurisdiction, the relevant relationship is otherwise connected exclusively with a single member state.

As the European Court explained in Coreck Maritime v Handelsveem,179 Art 23 does not require a jurisdiction clause to be formulated in such a way that the competent court can be determined on its wording alone. It is sufficient that the clause states the objective factors on the basis of which the parties have agreed to choose a court or the courts to which they wish to submit disputes. Such factors must be sufficiently precise to enable the court seised to ascertain whether it has jurisdiction, but they may, where appropriate, be determined by the particular circumstances of the case. Thus, it is permissible to choose, in a bill of lading contract, the courts of ‘the country where the carrier has his principal place of business’.180

171See Case 71/83: Tilly Russ v Haven [1984] ECR 2417; Case C-159/97: Castelletti v Trumpy [1999] ECR I-1597; and Case C-387/98: Coreck Maritime v Handelsveem [2000] ECR I-9337. Under English conflict rules, succession to a bill of lading contract is governed by the proper law of the contract; see The Kribi [2001] 1 Lloyd’s Rep 76.

172[1999] 2 Lloyd’s Rep 632. See also Bank of Tokyo-Mitsubishi v Baskan Gida [2004] ILPr 26, at para 191.

173[2001] 1 Lloyd’s Rep 76.

174See Case 150/80: [1981] ECR 1671.

175Case C-159/97: [1999] ECR I-1597.

176See per Lenz AG in Case C-288/92: Custom Made v Stawa [1994] ECR I-2913.

177See Pavan v Richard (1996) unreported, 27 February.

178See Case 56/79: Zelger v Salinitri (No 1) [1980] ECR 89; and Case C-159/97: Castelletti v Trumpy [1999] ECR I-1597, where the court also emphasised that it is not open to a court excluded by the clause to disregard it on the ground that the chosen court would apply different substantive rules in determining the merits of the dispute from those that would have been applied by the court excluded. In that case an English court was chosen in a bill of lading for the carriage of goods by a Danish shipowner from Argentina to Italy.

179Case C-387/98: [2000] ECR I-9337.

180On potentially conflicting jurisdiction clauses contained in related contracts between the same parties, see UBS v HSH Nordbank [2009] EWCA Civ 585. Deutsche Bank v Sebastian Holdings [2009] EWHC 2132 (Comm), and ACP Capital v IFR Capital [2008] EWHC 1627 (Comm).

As regards the possible invalidity of a jurisdiction clause by reason of lack of consent, owing to such factors as fraud, mistake or improper pressure, the European Court ruled in Benincasa v Dentalkit181 that for reasons of legal certainty, even where a jurisdiction clause is contained in a substantive contract, its validity must be distinguished from that of the substantive contract and its operation cannot be affected by allegations that the substantive contract is invalid, even for lack of consent, under the national law applicable under the conflict rules of the court seised. This leaves open the situation where it is alleged that there is lack of consent to the jurisdiction clause itself, by reason of fraud, error or pressure relating specifically to that clause,182 as where the clause refers to the court for the place where one party’s head office is located and that party misleads the other about such location. In such a case, the analogy of Tessili v Dunlop183 suggests that the issue should be governed by the law applicable under the conflict rules of the court seised.184

Article 23 envisages a choice of ‘a court or the courts’ of a member state. It is advisable to choose a specific court, such as the English High Court, and, thus, pre-empt any problem of finding the territorially appropriate court within the chosen state. It is clear that the chosen court need not otherwise have territorial competence, although the parties cannot override the member state’s rules allocating competence over categories of subject matter between different types of court – for instance, by attempting to confer jurisdiction over a commercial contract on a British employment tribunal.185 If the parties merely choose the courts in general of a specified member state, it will be for the law of that state to determine which of its courts shall be competent. It is submitted that in such a case the chosen state is bound to provide at least one competent court; and if it lacks any applicable rule for selecting that court or courts, all its courts become territorially competent.186 In any event, in the context of an international maritime contract between foreign parties, the Court of Appeal has construed a clause specifying ‘British Courts’ as referring to the English High Court.187

Since Art 23 is based on the principle of party autonomy, it does not prevent parties who have concluded an agreement on jurisdiction from subsequently concluding a further agreement varying or rescinding the earlier agreement.188 Similarly, as the European Court ruled in Elefanten Schuh v Jacqmain189 and Spitzley v Sommer Exploitation,190 Art 24 (on submission by appearance)191 prevails over Art 23, so that a court seised of an action or counterclaim in breach of a valid agreement on jurisdiction becomes competent if the defendant thereto enters an appearance without contesting its jurisdiction. The mandatory effect of Art 23(1), as excluding any judicial discretion to disregard an English jurisdiction clause in favour of a supposedly more appropriate forum in a non-member state, is now accepted by the English courts.192

181Case C-269/95: [1997] ECR I-3767. See also Ryanair Ltd v Bravofly [2009] IEHC 41.

182See Deutsche Bank v Asia Pacific Broadband Wireless Communications [2008] 2 Lloyd’s Rep 619 (CA); and Maple Leaf v Rouvroy [2009] EWHC 257 (Comm).

183Case 12/76: [1976] ECR 1473. The validity of jurisdiction clauses is excluded from the scope of the Rome Convention 1980 by Art 1(2)(d), and from the Rome I Regulation by Art 1(2)(e). On these measures, see Chapter 17.

184Compare per Slynn AG in Case 150/80: Elefanten Schuh v Jacqmain [1981] ECR 1671.

185See the Jenard Report [1979] OJ C59/1, at p 38.

186See Gaudemet-Tallon, Compétence et Exécution des Jugements en Europe, 4th edn, 2010, LGDJ (Guademet-Tallon), at para 154. Cf the Jenard Report, [1979] OJ C59/1, at p 37.

187See The Komninos S [1991] 1 Lloyd’s Rep 370.

188See Sinochem v Mobil [2000] 1 Lloyd’s Rep 670.

189Case 150/80: [1981] ECR 1671.

190Case 48/84: [1985] ECR 787.

191See pp 491–92 above.

192See Equitas v Allstate Insurance [2009] 1 All ER (Comm) 1137.

Although the wording of Art 23 refers only to agreements that choose courts of member states, in Coreck Maritime v Handelsveem,193 the European Court accepted that Art 23 gives rise to an implied ‘reflex effect’ which derogates from the generally mandatory character of Chapter II of the Regulation, and enables a member state to permit its courts to decline jurisdiction so as to respect a jurisdiction clause which would have been valid and effective under Art 23, but for its choosing a court of a non-member state.The Court explained that Art 23 does not apply to clauses designating a court in a third country, but that a court of a member state must, if it is seised notwithstanding such a jurisdiction clause, assess the validity of the clause by reference to the law, including the conflict rules, of its own country. Thus, an otherwise competent English court will, in the exercise of its discretion, decline jurisdiction in favour of a court of a non-member country whose exclusive jurisdiction has been agreed on by the parties, unless the claimant establishes the existence of strong reasons making it unjust to do so.194

Insurance, consumer and employment contracts

To protect the party who is expected to be economically weaker and less experienced in legal matters than the other party to the contract,195 Chapter II of the Regulation lays down special rules on jurisdiction in respect of insurance contracts,196 consumer contracts,197 and contracts of employment.198 Accordingly, these provisions offer the weaker party (the policyholder, consumer, or employee) a wide choice of fora in which to sue the stronger party (the insurer, supplier, or employer), while limiting those in which the stronger party can sue the weaker party, and in many cases invalidating contrary agreements. Moreover, in the case of insurance and consumer contracts (although not of employment contracts), the protective policy is reinforced by Art 35, which prevents the recognition and enforcement of judgments under Chapter III where the original court accepted jurisdiction in contravention of the protective provisions.

In general, the protective provisions apply only when the defendant is domiciled in a member state. Otherwise, jurisdiction in respect of these contracts is usually remitted by Art 4 to the law of the forum state in the same way as for ordinary contracts, and in such cases English law treats insurance, consumer and employment contracts in the same way as ordinary contracts. However, by Arts 9(2), 15(2) and 18(2), where an insurer, a supplier under a consumer contract, or an employer is not (under the normal rules) domiciled in any member state, but he has a secondary establishment in a member state, and the dispute arises from the operations of the secondary establishment, the insurer, supplier or employer is treated as domiciled in the state in which the secondary establishment is situated.199

The protective provisions do not affect a number of important provisions of Chapter II, which apply in the normal way to the protected contracts. Thus, an action based on a protected contract

193Case C-387/98: [2000] ECR I-9337, citing the Schlosser Report [1979] OJ C59/71, at para 176.

194See Berisford v New Hampshire Insurance Co [1990] 2 QB 631; Arkwright v Bryanston [1990] 2 QB 649; Konkola Copper Mines v Coromin

[2005] 2 All ER (Comm) 637, affirmed [2006] 1 All ER (Comm) 437 (CA); and Winnetka Trading Corp v Julius Baer [2008] EWHC 3146 (Ch).

195See Case C-89/91: Shearson Lehman Hutton v TVB [1993] ECR I-139, at para 18; and recital 13 to the Regulation.

196Chapter II, Section 3, Arts 8–14.

197Chapter II, Section 4, Arts 15–17.

198Chapter II, Section 5, Arts 18–21.

199See Case C-154/11: Mahamdia v Algeria, 19 July 2012, which involved claims for wages and wrongful dismissal, made in a German court against an external state, Algeria, by a man employed as a driver at its Embassy in Berlin. The European Court ruled that an embassy of an external state, situated in a member state, is a branch, under Art 18(2) of the Regulation, in relation to a dispute concerning a contract of employment concluded by the embassy on behalf of the sending state, where the functions carried out by the employee do not fall within the exercise of public powers.

can always be brought in the courts of the member state in which the defendant is domiciled, and in such cases the Regulation retains its normal indifference to the allocation of jurisdiction between the courts for the various areas of that state.200 Similarly, it remains possible to sue at the location of the defendant’s secondary establishment from whose operations the dispute arose;201 or to make a counterclaim based on the same contract in the court seised of the original action;202 and submission by appearance remains effective to found jurisdiction.203 Again, Arts 26–31 of the Regulation (on the consideration of jurisdiction by the court seised of its own motion, on service of the defendant, on simultaneously pending actions, and on provisional measures) remain applicable.

Insurance

No explicit definition of insurance is provided; however, as in the case of consumer contracts,204 the concept is likely to be given an independent meaning by the European Court. In any event, it is clear that all types of insurance (as generally understood) are covered and that the protective provisions are not confined to insurance taken out for domestic or private purposes.205 However, they extend neither to reinsurance, except in relation to direct claims by an insured under the primary insurance against a reinsurer;206 nor to disputes between loss and liability insurers, or between co-insurers.207

The Regulation offers to a policyholder, or other insured or beneficiary, a wide choice of fora in which to bring an action against an insurer domiciled in a member state. A similar choice is extended by Art 11(2) to a third party victim of a tort covered by liability insurance, where he brings a direct action against the insurer, if such a direct action is permissible under the law governing the issue according to the conflict rules of the court seised.208 In accordance with the general principle in favour of the defendant’s country, the Regulation confers jurisdiction on the courts of the member state in which the defendant insurer is domiciled,209 and on the courts for the place (in another member state) at which the defendant insurer has a secondary establishment from the operations of which the dispute has arisen.210 However, radically departing from the normal approach to jurisdiction, Art 9(1)(b) enables an insurer domiciled in a member state to be sued in another member state by a policyholder or other insured or beneficiary or even a third-party victim at the place of the claimant’s domicile.211

The jurisdiction normally conferred by Art 5(1) on the courts for the place of performance of the obligation in question is excluded by Art 8. However, in the case of liability insurance, or insurance of land, or where land and moveable property are covered by the same insurance policy and

200See Arts 9(1)(a), 12(1), 16(1)–(2), 19(1) and 20(1). In the UK, insurance is treated for the purpose of such allocation in the same way as ordinary contracts, since Sched 4 to the 1982 Act deliberately omits any specific provision for insurance.

201See Arts 5(5), 8, 15(1) and 18.

202See Arts 6(3), 12(2), 16(3) and 20(2).

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203 See Arts 13(1), 17(1), 21(1) and 24; and Case C-111/09: CPP v Bilas [2010] ECR I-4545. 204 See Case C-89/91: Shearson Lehman Hutton v TVB [1993] ECR I-139.

205 See New Hampshire Insurance Co v Strabag Bau [1992] 1 Lloyd’s Rep 361 (CA). 206 See Case C-412/98: Group Josi v UGIC [2000] ECR I-5925.

207 See Case C-77/04: Réunion Européenne v Zurich España [2005] ECR I-4509; and Youell v La Reunion Aerienne [2009] EWCA Civ 182.

208 Under traditional English law the admissibility of such a direct action was governed by the proper law of the insurance contract; see The Hari Bhum [2004] 1 Lloyd’s Rep 206. However, now Art 18 of the Rome II Regulation (EC Regulation 864/2007, [2007] OJ L199/40; considered in Chapter 17) enables a tort victim to bring his claim directly against the tortfeasor’s liability insurer, if either the law applicable to the tort or the law applicable to the insurance contract so provides.

209 See Art 9(1)(a).

210 See Arts 5(5) and 8.

211 See Case C-463/06: FBTO Schadeverzekeringen v Odenbreit, [2007] ECR I-11321; and Case C-347/08: Vorarlberger Gebietskrankenkasse v WGVSchwäbische Allgemeine Versicherungs [2009] ECR I-8661.

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adversely affected by the same contingency, Art 10 confers jurisdiction on the courts for the place (in a member state other than that of the defendant insurer‘s domicile) at which the harmful event occurred. It seems clear that, in the case of insurance of land, or of land and moveables together, the damage to the land (and perhaps moveables) constitutes the relevant ‘harmful event’, so that jurisdiction is conferred on the courts of the situs. In the case of liability insurance, the concept is presumably the same as under Art 5(3).212

As regards ancillary jurisdiction, Art 6(1)213 is excluded by Art 8, but Art 9(1)(c) confers jurisdiction over a defendant co-insurer on a court of a member state (other than the defendant co-insurer’s domicile) in which proceedings are pending against the leading insurer. It does not appear to matter on what basis jurisdiction over the leading insurer was obtained. Thus, an English co-insurer could be joined as a co-defendant in a French action against an American leading insurer, in which jurisdiction was founded on the plaintiff’s French nationality under Art 4 of the Regulation and Art 14 of the French Civil Code. Similarly, Art 6(2)214 is excluded, but Art 11(1) permits third party proceedings against a liability insurer in a court (of a member state other than the defendant insurer’s domicile) in which proceedings brought by a victim against an insured are pending; and Art 12(2) enables the making of a counterclaim in a court (of a member state other than the defendant insurer’s domicile) in which an action arising from the same policy is pending. As regards submission, Art 13(2) enables an insurer to be sued in a court of a member state chosen by an agreement on jurisdiction that complies with Art 23, and Arts 13(1) and 24 ensure that a court of a member state will become competent if the defendant insurer enters an appearance without contesting its jurisdiction.215

In accordance with its protective purpose, the Regulation severely restricts jurisdiction to entertain an action brought by an insurer against a policyholder or other insured or beneficiary who is domiciled in a member state.216 In general, the action must be brought in the courts of the member state in which the defendant is domiciled; or in another member state, in the courts for the place at which the defendant has a secondary establishment from the operations of which the dispute has arisen.217 However, Art 12(2) enables the making of a counterclaim in a court in which an action arising from the same policy is pending;218 Art 11(3) enables a liability insurer to join a policyholder or other insured as a third party in a direct action brought by a victim;219 and submission by appearance remains effective.220

To ensure the effectiveness of the protective policy, Art 13 invalidates any agreement on jurisdiction that departs from the protective provisions, except in five specified cases. The invalidation

212On Art 5(3), see pp 498–501 above.

213On Art 6(1), see pp 501–04 above.

214On Art 6(2), see pp 504–05 above.

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215 See Case C-111/09: CPP v Bilas [2010] ECR I-4545.

216 The restrictions extend to actions by the insurer against persons other than a policyholder, insured or beneficiary, if the insurer’s claim against them arises from the insurance, such as persons who have conspired with the policyholder to defraud the insurer, and apply even if the plaintiff insurer is not domiciled in any member state; see Jordan v Baltic Insurance Group [1999] 2 AC 127.

However, an application for the costs of litigation, made under s 4 of the Courts and Legal Services Act 1990 against a non-party to the litigation (such as a controlling shareholder of a plaintiff company), does not fall within the scope of the protective provisions, even where the litigation in question relates to insurance and the costs are sought against the controlling shareholder of a plaintiff corporate policyholder; see The Ikarian Reefer [2000] 1 WLR 603 (CA).

217 See Arts 5(5), 8 and 12(1).

218 However, Art 12(2) only permits a counterclaim against the original plaintiff, and not against additional co-defendants to the counterclaim, such as persons alleged to have conspired with the policyholder to defraud the insurer; see Jordan v Baltic Insurance Group [1999] 2 AC 127.

219 In Maher v Groupama [2009] EWCA Civ 1191, Moore-Bick LJ considered that Art 11(3) also enables a victim who has brought a direct action against a liability insurer to join the insured tortfeasor as a co-defendant.

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220 See Arts 13(1) and 24; and Case C-111/09: CPP v Bilas [2010] ECR I-4545.

probably extends to clauses choosing a court of a non-member state, but not to arbitration clauses.221 The first exception permits an agreement on jurisdiction which is entered into after the dispute has arisen. The second allows an agreement that enables the policyholder, an insured or a beneficiary to sue in additional courts.222 The third exception permits an agreement which is concluded between a policyholder and an insurer who at its conclusion are domiciled or habitually resident in the same member state, and has the effect of conferring jurisdiction on the courts of that state, to the exclusion of the courts for the place of a possible harmful event elsewhere (or of a subsequently acquired domicile elsewhere), unless such an agreement is contrary to the law of the chosen state. However, in view of the general requirement of privity applicable under Art 23, such an agreement will not be effective against a third party victim who brings a direct action against a liability insurer,223 and, as the European Court ruled in Peloux v Axa Belgique,224 the third exception cannot be relied on against an insured or beneficiary under the insurance who is not the policyholder, and who is domiciled in a member state other than that of the policy-holder and the insurer. The fourth exception permits an agreement concluded with a policyholder who is not domiciled (presumably at the conclusion of the agreement)225 in any member state, except in so far as the insurance is compulsory under the law of a member state, or the insurance relates to land situated in a member state.226

It is in respect of the fifth exception that the Regulation has made one of its most important departures from the Brussels Convention. Previously, the fifth exception concerned insurance of most maritime or aviation risks, other than personal injury to passengers and loss of or damage to their baggage.227 Now, it has been extended by Arts 13(5) and 14(5) to cover any insurance of a large risk, as defined by EC Directive 2009/138.228 The effect is to permit a jurisdiction clause contained in an insurance contract in most cases where the policyholder is acting in the course of a large or medium-sized business.229

Consumer contracts

Section 4 (Arts 15–17) of Chapter II of the Regulation lays down protective rules in respect of certain consumer contracts, which are elaborately defined and may conveniently be referred to as protected consumer contracts. In the case of such a contract, the consumer may sue the supplier in the courts of the member state where the supplier is domiciled. The consumer also has the option of suing the supplier, in another member state, at the location of the supplier’s secondary establishment from whose operations the dispute arises, or at the consumer’s own domicile.230 Conversely, the supplier must sue the consumer in the member state where the consumer is domiciled.231 In addition, Art 17 invalidates a jurisdiction clause in respect of such a contract, with three exceptions

221See Arts 1(2)(d) and 66; and Art II of the New York Convention of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

222See Sherdley v Nordea Life [2012] EWCA Civ 88.

223See Gaudemet-Tallon, at para 278.

224Case C-112/03, [2005] ECR I-3707.

225Ibid, at para 256.

226On compulsory insurance, see the Schlosser Report [1979] OJ C59/71, at para 138.

227See Charman v WOC Offshore [1993] 2 Lloyd’s Rep 551 (CA); and Standard Steamship Owners’ Protection and Indemnity Association (Bermuda) Ltd v GIEVision Bail [2004] EWHC 2919 (Comm).

228[2009] OJ L335/1.

229The definition of large risks is examined in detail in Chapter 17.

230See Arts 5(5), 15(1) and 16(1).

231See Art 16(2). Where a consumer disappears and his current domicile cannot be ascertained, Art 16(2) confers jurisdiction on the courts of his last known domicile; see Case C-327/10: Hypotecˇní Banka v Lindner, 17 November 2011.

corresponding to the first three exceptions applicable to insurance.232 Whichever party is claimant or defendant, the Regulation permits the making of a counterclaim based on the same contract in the court seised of the original action, and submission by appearance remains effective to found jurisdiction.233

Viewed generically, a consumer contract might be defined as a contract entered into by an individual, not acting in the course of a business, whereby he acquires goods or services, for his own private consumption, from a supplier acting in the course of a business, or whereby he obtains credit in connection with such an acquisition of goods or services. However, the Regulation departs in various ways from this generic definition.

Article 15(1) of the Regulation refers to ‘a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession’. However, unlike the Brussels Convention, the Regulation does not confine the scope of the protective provisions to contracts for the supply of goods or services, or of credit in connection with the sale of goods.

As regards the character of the acquirer, the European Court has emphasised (in rulings under both the Brussels Convention and the Regulation) that Section 4 is confined to cases where the contract was entered into by a private final consumer, not engaged in trade or professional activities.234 It also seems clear that under the Regulation, as under the Brussels Convention, the acquirer must be an individual, as distinct from a corporate entity,235 and that Section 4 does not apply where a person acquiring goods or services holds himself out as contracting for business purposes to a person who contracts in good faith on that basis.236

The problem of a person acting for mixed business and non-business purposes was addressed by the European Court in Gruber v Bay Wa,237 which involved a contract concluded by a farmer for the purchase of roofing tiles for a farmhouse that was occupied by him partly in a private capacity as a family dwelling and partly for farming purposes to house livestock and fodder. The European Court ruled that a person who concludes a contract partly for business purposes and partly for non-business purposes does not count as a consumer unless his business purpose is of negligible importance in relation to the transaction. Moreover, in the case of a contract for mixed purposes, it is for the alleged consumer to establish that the business purpose is of negligible importance. In determining whether the contract in question was concluded to a more than negligible extent for business purposes, the court seised must refer primarily to the objective facts as a whole, rather than confining itself to matters known to the supplier at the time of conclusion of the contract. However, there is an exception where the alleged consumer so conducted himself as to create the impression in the supplier that he was acting for business purposes. This would be the case, for example, where an individual, in ordering goods which are capable of business use, uses notepaper with a business letter-head, has the goods delivered to his business address, or refers to the possibility of reclaiming value-added tax. In such circumstances, Section 4 would not apply even if in reality the contract did not have a more than negligible business purpose, for the consumer would

232On these exceptions, see pp 512-13 above. Despite the third exception, a clause in a contract between parties domiciled in the same country, choosing the court for the place of the supplier’s domicile, may be rendered invalid by Directive 93/13 on Unfair Terms in Consumer Contracts; see Case C-240/98: Océano Grupo Editorial v Murciano Quintero [2000] ECR I-4941.

Feichter, 14 March 2013.

235See Case C-269/95: Benincasa v Dentalkit [1997] ECR I-3767; and Art 6(1) of the Rome I Regulation.

236See Case C-460/01: Gruber v Bay Wa [2005] ECR I-439.

237Case C-464/01: [2005] ECR I-439.

be regarded as having renounced its protection in view of the impression he had created in the supplier, acting in good faith.

Under the Brussels Convention, the European Court had also insisted that the contract must be concluded for the purpose of satisfying the acquirer’s own needs in terms of private consumption.238 The requirement appeared to exclude a contract entered into for purposes of investment or financial speculation, such as purchase of corporate shares or commodity futures. Conversely, a contract for the provision of credit designed to enable the borrower to obtain goods or services for his private consumption was within Section 4. Now, however, in Ilsinger v Dreschers,239 the European Court has ruled that under the Regulation there is no requirement that the contract must be concluded for the purpose of satisfying the acquirer’s own needs in terms of private consumption. Subject to the specific exclusion of certain transport contracts,240 Section 4 of the Regulation extends to all contracts, whatever their purpose, if they have been concluded by a consumer with a professional and fall within the latter’s commercial or professional activities. It follows that Section 4 of the Regulation extends not only to contracts for financial services such as banking, but also to contracts entered into for purposes of investment or financial speculation, including contracts for the acquisition of financial instruments or transferable securities (such as corporate shares, corporate or public bonds, units in an investment fund, commodity futures, or other derivative instruments).241 It also seems clear that under the Regulation Section 4 extends to cases where an individual purchases land for non-business purposes.

A series of cases in the European Court have dealt with claims brought under consumer protection legislation by a consumer against a supplier for a prize promised by the supplier as a marketing device with a view to inducing the consumer to place an order for goods or services. Under the Brussels Convention, it was held that Section 4 extended to a claim for a prize promised on the placing of an order for goods,242 but did not apply where the prize was not made conditional on the placing of an order for goods or services, but only on a request for payment of the prize, and no order was placed.243 In contrast, the European Court has ruled in Ilsinger v Dreschers244 that in this context Section 4 of the Regulation has a wider operation.

238See Case C-269/95: Benincasa v Dentalkit [1997] ECR I-3767.

239Case C-180/06, [2009] ECR I-3961. See especially at paras 48–50.

240Article 15(3) of the Regulation excludes from Section 4 a contract of transport, other than a contract that, for an inclusive price, provides for a combination of travel and accommodation. In Cases C-585/08 and C-144/09: Pammer v Reederei Karl Schlüter and Hotel Alpenhof v Heller, [2010] ECR I-12527, the European Court ruled that the inclusion among consumer contracts of a contract that, for an inclusive price, provides for a combination of travel and accommodation, is equivalent in concept to a package, as defined by EC Directive 90/314, [1990] OJ L158/59, on package travel, package holidays and package tours. To satisfy this definition, it is enough that the following conditions are satisfied: (a) the service combines tourist services sold at an inclusive price; (b) the service includes two of the following services: (i) transport, (ii) accommodation, and (iii) other tourist services not ancillary to transport or accommodation and accounting for a significant proportion of the package; and (c) the service covers a period of more than 24 hours or includes overnight accommodation. Thus Section 4 extended to a voyage by freighter from Trieste in Italy to the Far East, since the voyage involved, for an inclusive price, accommodation as well as transport, and was for a period of more than 24 hours. But it is clear that insurance contracts are always governed by Section 3, to the exclusion of Section 4.

241However, the requirement that the alleged consumer must not be acting for business purposes prevents Section 4 from applying to a loan arranged by the managers of company for the purpose of acquiring its shares and, thus, enabling them to continue

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to manage the company; see Maple Leaf v Rouvroy [2009] EWHC 257 (Comm). See also Case C-419/11: Ceská Sporˇitelna v Feichter, 14 March 2013, where the European Court ruled that Section 4 did not apply where an individual with close professional links to a company, such as its managing director or majority shareholder, gave an aval on a promissory note issued in order to guarantee the obligations of the company under a contract for the grant of credit.

242See Case C-96/00: Gabriel [2002] ECR I-6367.

243See Case C-27/02: Engler v Janus Versand [2005] ECR I-481; also holding that such a claim counted as a contractual matter within Art 5(1).

244Case C-180/06, [2009] ECR I-3961.

516 | CIVIL JURISDICTION

In Ilsinger, the European Court addressed the situation where a consumer seeks, in accordance with protective legislation, an order requiring a mail-order company to pay a prize that the consumer has apparently won, after the company, with the aim of encouraging the consumer to conclude a contract, had sent a letter addressed to him personally giving the impression that he would be awarded a prize if he requested payment by returning the ‘prize claim certificate’ attached to the letter, but without the award of the prize depending on an order for goods offered for sale by the company. The European Court ruled that such an action brought by the consumer falls within Section 4 of the Regulation where either the professional vendor has undertaken in law to pay the prize to the consumer, or the consumer has, in fact, placed an order with the professional vendor. The Court explained that Section 4 of the Regulation is not limited to situations in which the parties have assumed reciprocal obligations, but that the Section does require that the action relates to a contract that has been concluded between a consumer and a professional. For this purpose, a contract may exist where one of the parties merely indicates its acceptance, without assuming any legal obligation to the other party, but it is necessary that the latter party should assume such a legal obligation by submitting a firm offer that is sufficiently clear and precise with regard to its object and scope as to give rise to a link of a contractual nature. In the context of a prize notification, the mail-order company must have expressed clearly its intention to be bound by a legal commitment, if it is accepted by the other party, by declaring itself to be unconditionally willing to pay the prize at issue to consumers who so request. Accordingly, Section 4 of the Regulation cannot apply if the professional did not undertake contractually to pay the prize promised to the consumer who requests its payment, unless the misleading prize notification was followed by the conclusion of a contract by the consumer with the mail-order company evidenced by an order placed with the latter.

As regards the character of the supplier, Section 4 of the Regulation (like Section 4 of the Brussels Convention) clearly requires that the other party to a consumer contract, the supplier, must be acting in the course of a trade or profession. This had been confirmed by the European Court in rulings on the Brussels Convention,245 and is made explicit by Art 15(1)(c) of the Regulation.

In addition, Art 15(1) requires that the contract must be either (a) a contract for the sale of goods on instalment credit terms;246 or (b) a contract for a loan repayable by instalments, or for any other form of credit, made to finance the sale of goods; or (c) a contract which is concluded with a person who pursues commercial or professional activities in the member state of the consumer’s domicile or, by any means, directs such activities to that member state or to several states including that member state, and which falls within the scope of such activities.

Article 15(1)(c) replaces Art 13(1)(3) of the Brussels Convention, which referred to any other contract for the supply of goods or a contract for the supply of services, where the conclusion of the contract was preceded by a specific invitation addressed to the consumer, or by advertising, in the state of his domicile, and the consumer took in that state the steps necessary for the conclusion of the contract on his part.247 The intention is to emphasise that contracts concluded through the Internet are included. The concept of ‘directing activities’ to the consumer's country, under Art 15(1)(c)

245See Case C-96/00: Gabriel [2002] ECR-I-6367, at para 39; and Case C-27/02: Engler v Janus Versand [2005] ECR I-481, at para 34. See also the Giuliano and Lagarde Report on the Rome Convention 1980, [1980] OJ C282/1 at p 23; and Art 6(1) of the Rome I Regulation.

246This case is confined to situations where the seller has granted credit to the buyer, in the sense that the seller has transferred possession of the goods to the buyer before the buyer has paid the full price, and does not apply where the full price had to be paid before transfer of possession, even it was payable in several instalments; see Case C-99/96: Mietz v Intership Yachting Sneek [1999] ECR I-2277.

247On Art 13(1)(3) of the Brussels Convention, see Case C-96/00: Gabriel [2002] ECR I6367; per Jacobs AG in Case C-464/01: Gruber v BayWa [2005] ECR I-439; and Rayner v Davies [2003] 1 All ER (Comm) 394 (CA).

of the Regulation, in the context of activities on the Internet, was addressed by the European Court in Pammer v Reederei Karl Schlüter and Hotel Alpenhof v Heller.248 It ruled that, to determine whether a trader whose activity is presented on its website or on that of an intermediary can be considered to be ‘directing’ its activity to the member state of the consumer’s domicile, within the meaning of Art 15(1)(c), it should be ascertained whether, before the conclusion of any contract with the consumer, it is apparent from those websites and the trader’s overall activity that the trader was envisaging doing business with consumers domiciled in one or more member states, including the member state of that consumer’s domicile, in the sense that it was minded to conclude a contract with them. The Court also provided a non-exhaustive list of matters that are capable of constituting evidence that the trader’s activity is directed to the member state of the consumer’s domicile: the international nature of the activity; mention of itineraries from other member states for going to the place where the trader is established; use of a language or a currency other than the language or currency generally used in the member state in which the trader is established, with the possibility of making and confirming the reservation in that other language; mention of telephone numbers with an international code; outlay of expenditure on an Internet referencing service to facilitate access to the trader’s site or that of its intermediary by consumers domiciled in other member states; use of a top-level domain name other than that of the member state in which the trader is established; and mention of an international clientele composed of customers domiciled in various member states. It added that the mere accessibility of the trader’s or the intermediary’s website in the member state in which the consumer is domiciled is insufficient. The same is true of mention of an email address and of other contact details, or of use of a language or a currency that are the language and/or currency generally used in the member state in which the trader is established.

In Mühlleitner vYusufi,249 the European Court ruled that Art 15(1)(c) Regulation does not require the contract between the consumer and the trader to be concluded at a distance. Thus, Section 4 applies where the contract has been concluded during a visit by the consumer to the supplier’s premises, after earlier communications by Internet and telephone.

Employment contracts

Articles 18–21 of the Regulation lay down protective rules in respect of individual contracts of employment.250 The nature of such contracts was addressed by the European Court in Shenavai v Kreischer,251 where it emphasised that such contracts create a lasting bond that brings the worker to some extent within the organisational framework of the employer’s business, and that they are linked to the place where the activities are pursued, which determines the application of mandatory rules and collective agreements. Thus the concept is confined to cases involving a personal relationship of master and servant, and does not extend to contracts for professional services, such as those of an architect or lawyer, engaged as an independent contractor to carry out a particular task.252 A fortiori it does not include a commercial contract whereby a company obtains

248Cases C-585/08 and C-144/09, [2010] ECR I-12527. See also the opinion of Cruz Villalón AG in pending Case C-218/12:

Emrek v Sabranovic, 18 July 2013.

249Case C-190/11, 6 September 2012.

250These provisions modify and replace Art 5(1), second sentence, and Art 17(6) of the Brussels Convention.

251See Case 266/85: [1987] ECR 239.

252See also WPP v Benatti [2007] 2 All ER (Comm) 525, where the English Court of Appeal held that these provisions did not apply to a self-employed management consultant who for a fee was engaged to devise proposals and strategies to improve the performance of a corporate group. It accepted that, for this purpose, the objective criteria of an employment contract are the provision of services by one party over a period of time for which remuneration is paid, control and direction over the provision of the services by the counterparty, and integration to some extent of the provider of the services within the organisational framework of the counterparty. However these are not hard-edged criteria which can be mechanistically applied. For example, in the case

exclusive rights to canvass in its country for advertising in a foreign newspaper.253 It has been held in England that Arts 18–21 are confined to claims based on a contract of employment, and do not extend to a claim by an employer against an employee in tort for conspiracy to interfere unlawfully with a commercial contract between the employer and a supplier;254 or, at any rate, that these provisions are confined to cases where the contract of employment is legally relevant to the claim, and thus do not extend to claims against an employee as party to a common design to misuse the employer’s intellectual property for the purpose of facilitating unlawful competition against the employer.254a However, an agreement, such as a bonus agreement, which varies or adds to the terms of an earlier contract of employment must be treated as part of the contract of employment, even if on its own it does not contain all the terms usually found in a contract of employment;255 and it has now been accepted that Arts 18-21 extend to claims by an employee for equal pay or in respect of sex discrimination.256

Article 19 gives the employee a choice of courts in which to sue an employer who is domiciled in a member state. He may sue in the courts of the member state where the defendant employer is domiciled; or (in another member state) in the courts for the place where the employee habitually carries out his work, or for the last place where he did so; or, if the employee does not or did not habitually carry out his work in any one country, in the courts for the place where the business which engaged the employee is or was situated. In addition, he may sue under Art 5(5) (in a member state other than the employer’s domicile) in the courts for the place where a secondary establishment of the employer, from whose operations the dispute arises, is located. In contrast, Art 20(1) confines actions brought by an employer to the courts of the member state in which the employee is domiciled. Article 21 invalidates jurisdiction clauses, except clauses which are entered into after the dispute has arisen, or which allow the employee to bring proceedings in additional courts.257 The ordinary rules on counterclaims and submission by appearance remain applicable in employment cases,258 but not the rule specified by Art 6(1) enabling joinder of co-defendants.Thus an employee who is jointly employed by two employers who are domiciled in different member states cannot utilise Art 6(1) so as to sue both employers at the domicile of one of them.259

The concept of the place of habitual work has been clarified by the European Court in Mulox v Geels260 and Rutten v Cross Medical.261 Where the employee carries out his work in more than one country, the concept refers to the place where the employee has established the effective centre of his working activities, at or from which he performs the essential part of his duties to his employer. Thus, for example, a sales manager will habitually work at the office where he organises his work,

of a person with a non-executive role, there may be degrees of control and degrees of integration within the organisational framework of the company. Thus the court must carry out an evaluative rather than a tick-box exercise, looking at the terms of the contract aided by evidence about its operation in order to reach an overall view of its character.

253See Mercury Publicity v Loerke [1993] ILPr 142 (CA).

254See Swithenbank Foods Ltd v Bowers [2002] 2 All ER (Comm) 974. 254a See Alfa Laval Tumba v Separator Spares [2012] EWHC 1155 (Ch).

255See Samengo-Turner v Marsh & McLennan [2007] 2 All ER (Comm) 813 (CA).

256See Simpson v Intralinks, [2012] UKEAT 0593_11_1506.

257See Case C-154/11: Mahamdia v Algeria, 19 July 2012, which involved an employment contract for work in Germany that contained a clause conferring exclusive jurisdiction on the Algerian courts. The European Court ruled that Art 21(2) is confined to an agreement on jurisdiction which gives the employee the possibility of bringing proceedings not only before the courts ordinarily having jurisdiction under Art 18 and 19, but also before other courts. Such other courts may include courts outside the EU. But Art 21(2) does not extend to an agreement on exclusive jurisdiction, which prohibits the employee from bringing proceedings before courts which have jurisdiction under Arts 18 and 19.

258See Arts 6(3), 20(2) and 24.

259See Case C-462/06: Glaxosmithkline v Rouard, [2008] ECR I-3965.

260Case C-125/92: [1993] ECR I-4075.

261Case C-383/95: [1997] ECR I-57.