The Competent Jurisdiction in B2C Contracts

Federica Greggio and Andrea Platania
Abridged by Devashish Bharuka

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In the effort to outline a uniform scenario on electronic commerce and to flatten differences between national rules governing jurisdiction in civil and commercial matters, the European Union is endeavoring to issue a remarkable number of legislative proposals. With this regard the Commission has lately proposed a draft Council Regulation aimed to replace and update the Brussels Convention of 1968. The main topic of discussion derives from the full adoption of the country of destination rule, set forth in Article 15 of the Draft, as to the establishment of the jurisdiction on disputes arising out of business to consumer (B2C) contracts.

Current legal scenario: Apart from sale of goods on installment credit terms and contract for loans repayable by installments, a consumer can, under Brussels Convention, bring an action in the country of his own domicile, upon condition that the conclusion of the contract was preceded by a specific invitation addressed to the consumer or by advertising carried out in the consumerís domicile country and provided that the consumer took in that state the steps necessary for the conclusion of the contract itself (Article 13.3). The author raises the question as to how to establish, in fact, whether the promotion and the offer of goods or services via an interactive website are carried out in the consumerís domicile country?

According to the New Regulation, the consumer is entitled to bring proceedings against the other party to a contract in his own domicile, not only with respect to Ďany other contracts for the supply of goods or a contract for the supply of servicesí, but with regard to any kind of contract, when the transaction is concluded with a person pursuing business activities in the state of the consumerís domicile or directing such activities towards that state, provided the contract in question falls within the scope of such activities.

In relation to e-commerce the Ďcountry of destination ruleí would mean that the proprietor of an interactive website based in an E.U. Member State would be subject to the jurisdiction of any E.U. Member State where his website is accessible. Consequently, he is subject to the laws of every such Member State, unless it is able effectively to restrict the access of consumers located in particular countries.

The author concludes that European suppliers of goods or services may be bound in fact to set up as many virtual shops as there are European countries, each complying with the particular legal provision of the country to which it is addressed and specifically refraining consumers from other countries from accepting offers made therein.