Who will decide my dispute? Determining which court has jurisdiction in European order for payment cases

For any creditor seeking to recover a cross-border debt, the european order for payment procedure offers an attractive solution. But before you start proceedings, you need to know which court to take your case to.

This is not an insignificant issue. An error in determining which court has jurisdiction can result in the claim being inadmissible, precious time being lost and even the claim becoming time-barred.

A two-tier system

Determining which court has jurisdiction follows a two-level logic:

1. At international level Which courts in which Member States can be involved?
2. At national level Once the Member State has been identified, which specific court within that State has material and territorial jurisdiction?

Rules of international jurisdiction

For the first level, Article 6 of the Regulation (EC) no. 1896/2006 of 12 December 2006 refers to European common law rules, principally those of Regulation (EU) no. 1215/2012, known as "Brussels I bis".

In a typical commercial case, the claimant generally has several options:

• Bringing the case before the court for the defendant's place of residence (basic rule)
• Bringing the matter before the court for the place where the obligation is performed (for contracts)
• Bringing an action before the court designated by a jurisdiction clause

As the CJEU pointed out in its judgment of 13 June 2013 (Goldbet Sportwetten GmbH v Massimo Sperindeo, C-144/12), these rules fully apply to the European order for payment procedure.

Specific consumer protection

The European legislator has made an important exception to these general rules where a consumer is involved.

Article 6(2) of the Regulation stipulates that where :

• the claim relates to a contract concluded by a consumer for non-business use, and
• the consumer is the defendant,

then "jurisdiction lies solely with the courts of the Member State in which the defendant is domiciled".

This protective rule prevents a professional from forcing a consumer to defend himself before a foreign court. It significantly limits the scope for forum shopping, to the detriment of consumers.

Jurisdiction of French courts

In France, once international jurisdiction has been established, the division of substantive and territorial jurisdiction is specified by national law.

Material competence

Law no. 2011-1862 of 13 December 2011 clarified this point:

• In civil matters: the court of first instance has jurisdiction (article L. 221-7 of the Code of Judicial Organisation).
• In commercial matters: the President of the Commercial Court has jurisdiction (Article L. 722-3-1 of the Commercial Code)

Territorial jurisdiction

According to Article 1424-1 of the Code of Civil Procedure, where the Brussels I bis Regulation "designates the courts of a Member State without further specification, the court having territorial jurisdiction is that of the place where one or more of the defendants resides".

In practice, applications for European orders for payment submitted to the French courts are often lodged by creditors from other Member States against debtors residing in France.

The pitfalls to be avoided: the light of case law

The case law of the CJEU has clarified a number of delicate points.

In Thomas Cook Belgium (C-245/14, 22 October 2015), the Court held that a defendant who has been served with a European order for payment cannot seek its review on the grounds that the court of origin assumed jurisdiction on the basis of incorrect information provided by the claimant.

More recently, the Flight Refund judgment (C-94/14, 10 March 2016) clarified that where a court is seised to designate a territorially competent court following an opposition, national procedural rules apply.

These decisions show the importance of correctly determining jurisdiction from the outset of the proceedings.

How do you correctly determine which court has jurisdiction?

Here is a 3-step method for identifying the competent court:

1. Identifying the basis for international jurisdiction :
   • Is there a jurisdiction clause in the contract?
   • Where is the defendant's domicile?
   • Where has the contractual obligation been or must it be performed?
2. Check the protective rules :
   • Is the defendant a consumer?
   • Is it an insurance contract or an employment contract?
3. Determining the precise jurisdiction :
   • In the Member State identified, which court has substantive jurisdiction?
   • Which court has territorial jurisdiction?

Once you have decided which court has jurisdiction, it is essential to prepare your case carefully. application for a european order for payment to start the procedure.

If you're not sure which jurisdiction has jurisdiction over your case, it may be a good idea to consult a specialist lawyer. An error at this stage can compromise the entire procedure and considerably increase collection times.

At [Firm name], we regularly assist creditors with the cross-border recovery of their debts. Please do not hesitate to contact us for a personalised analysis of your situation.

Sources

• Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure
• Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters
• CJEU, 3rd Ch. 13 June 2013, Goldbet Sportwetten GmbH v Massimo Sperindeo, Case C-144/12
• CJEU, 4th Ch. 22 October 2015, Thomas Cook Belgium NV v Thurner Hotel GmbH, Case C-245/14
• CJEU, 2nd Ch, 10 March 2016, Flight Refund Ltd v Deutsche Lufthansa AG, Case C-94/14
• Code of Judicial Organisation, article L. 221-7
• French Commercial Code, article L. 722-3-1
• Code of Civil Procedure, article 1424-1