BrusselsIRegulation

30 October 2002

Peter Van de Velde

On 1 March 2002, Council Regulation (EC) No 44/2001 of 22 December on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I”) entered into force. This Regulation replaces for all EU Member States, except Denmark, the 1968 Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (“EEX Treaty”).

Like the EEX Treaty, Brussels I sets out the rules for determining which EU court will have jurisdiction over disputes related to commercial contracts and facilitates the recognition and enforcement of judgments between Member States.

The new Regulation however also impacts on e-commerce related issues as it extends the protection of on-line consumers.

According to Article 16 §1 of the Brussels I Regulation, a consumer may bring proceedings against the other party to a contract either in the courts of the Member State in which that party is domiciled or in the courts of the place where the consumer is domiciled. The consumer thus has the choice, while proceedings against the consumer may only be brought in the courts of the Member State in which the consumer is domiciled.

Consumers thus can bring disputes before their home jurisdiction. According to Article 15 §1 c) of the Brussels I Regulation, this jurisdictional rule applies if “(…) the contract has been 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 the Member State, and the contract falls within the scope of such activities”.

The Brussels I Regulation is thus broadening the definition of “consumer contracts” by including all contracts where a company pursues commercial or professional activities in the Member State of the consumer’s domicile or, by any means, directs activities to that Member State. This new definition particularly affects on-line trade. How should the concept of “directing activities” be interpreted in the case of websites offering goods and services to consumers? What if a consumer located in one Member State buys goods or services via the Internet from a company located in another Member State? When will the on-line trader be regarded as having directed his activities to the Member State of the consumer?

The European Commission and the Council released a Statement on Article 15 of the Brussels I Regulation in relation to distance marketing via the Internet. The Commission and the Council stress that “the mere fact that an Internet site is accessible is not sufficient for Article 15 to be applicable, although a factor will be that this Internet site solicits the conclusion of distance contracts and that a contract has actually been concluded at a distance, by whatever means”. The Statement further holds that the language and the currency that are used on the website do not constitute a relevant factor.

In other words: when a consumer located in one Member State accesses a website of a company located in another Member State and accepts the offer made on the website to buy goods or services, the company will be considered to have directed its activities to the Member State of the consumer, notwithstanding the fact that (possibly) the website was only aiming at the consumers of the company’s own (or another) Member State. The rule of Article 15 can then automatically apply and the company operating the website will face the risk of being sued before the consumer’s home jurisdiction, irrespective of any jurisdiction agreement or jurisdiction clause in its Terms and Conditions.

Moreover, it is to be expected that the European Court of Justice will interpret the concept of “directing activities” in a broad sense (cf. already the broad interpretation of the EEX Treaty by the Court in favour of consumer protection). Companies offering goods and services via the Internet will then face immediate jurisdiction in all Member States of the EU.

In that respect, the Brussels I Regulation is not really making a contribution to legal certainty in the area of e-commerce.