This is relevant to international business because as the world globalizes it is important to set standards as to which laws must be applicable. Using an individual or companies domicile, where they live, is a simple way to dictate that entities are accountable to the jurisdictions in which they live.
The second basis is special jurisdiction, which in accordance with Articles 4-7, dictates that legal proceedings may be taken against a defendant even if he is not domiciled in a member state in matters of contract, maintenance or tort including the place of performance of an obligation or any other sort of dispute.
The basis of special jurisdiction is a bit more challenging to determine as not all aspects of agreements are always clearly stated, however having the option of bringing disputes to EU court based on the above is important in aiding the conduct of international business and protects the interests of those operating on EU lands. The implementation of special jurisdiction is particularly challenging because in some matters, obligations could be performed in a number of places that are not defined in a contract.
An example can be seen in the case of Re Harrods (Buenos Aires) Ltd whereby Harrods Buenos Aires operated in bad faith by registering a number of web domains in the name of Harrods in aims to mislead customers in believing they were the world renowned London retailer Harrods located in the United Kingdom. While the two companies were connected at one point all ties between them were severed and each owns their own specific rights to the name Harrods in separate parts of the world.[3] Harrods UK sued under the United States District Court for the Eastern District of Virginia at which time it had to be examined if the domain names had sufficient ties with Virginia for the location to be the jurisdiction. It was settled that 60 domain names were infringing and since those 60 domains were registered using a registrar in Virginia, the place of performance, it was settled that the jurisdiction be in that location
The case of Shevill v Presse Alliance SA is another matter in which jurisdiction was question. The House of Lords had to interpret Article 5(3) of the BR.[4] Since a number of locations were contractually set for the distribution of the publication the plaintiff was able to bring action where the article was distributed or where the plaintiff claims to have suffered damages. Having a number of jurisdictions which have ties to the matter leaves room for forum shopping and shows the weakness of Article 5(3) that did not initially have a clear definition for which jurisdiction should hear the case.[5]
The BR serves to guide courts in making effective decisions as to the choice of law in civil and commercial matters and consolidates the decision-making process to a set of distinct, agreed-upon, rules. While the BR is sometimes successful in determining which court has the jurisdiction to hear a case, when multiple foreign elements are introduced it is more difficult to determine the right court. The lack of consistency proves that the BR still has a ways to go before it is able to unify all the Member States in resolving conflict of laws.
[1] Ruth Hayward Conflict of Laws (4th edition, Cavendish Publishing Limited, London 2006) 50.
[2] Ruth Hayward Conflict of Laws (4th edition, Cavendish Publishing Limited, London 2006) 55.
[3] Re Harrods ( Buenos Aires) Ltd [1991] 4 All ER 334.
[4] Shevill v Presse Alliance SA [1995] 2 AC 18.
[5] John O’Brien Smith’s Conflict of Laws (2th edition, Cavendish Publishing Limited, London 1999) 238.
by
dxb625 (student)
