New ruling makes forum in delictual cases hot topic yet again - International Law Office

Background
Facts
Decision
Comment


As a general rule, a legal action can be brought against a party in the party's home jurisdiction. However, there are additional contexts which could render an alternative jurisdiction applicable. One of the most important is the notion of delictum, which can cause a lawsuit to be brought "where the legal wrong occurred". There has previously been some uncertainty in Danish case law regarding interpretation of the wording contained in the rule, but a recent judgment of the Maritime and Commercial Court(1) has provided clarification.

Background

As Denmark is a member of the European Union, its legislation is, to a large extent, affected by EU law. The issue of whether a case has jurisdiction in Denmark is regulated by:

• the Brussels I Regulation;
• the Lugano Convention; or
• the Administration of Justice Act.

In cases involving a non-EU member state, the principal rule is that a legal action should be brought in the defendant's jurisdiction if there is no valid agreement between the parties stating otherwise. However, in certain circumstances additional forums can apply for the plaintiff. One of the most frequently used is the delictual rule laid down in Section 243 of the Administration of Justice Act, which enables a legal action to be brought where the legal wrong occurred. The reasoning behind the delictual rule is that these types of case are most conveniently settled "where the legal wrong occurred". However, there has been uncertainty as to how this phrase should be interpreted, as in some cases the action has taken place in one jurisdiction whereas the damage occurred somewhere else.

The general opinion has been that a plaintiff may choose between the jurisdiction of the action and the jurisdiction where the damage occurred.

Facts

The parties to the case were a Danish architectural firm and 11 foreign companies, 10 of which were Turkish and one of which was German. The architectural firm claimed that it had been hired in the 1990s by a ship building company to design a ship. However, the firm subsequently discovered that its technical drawings had been used to build and classify 16 ships. The firm claimed that it had not consented to such use and, consequently, the copyright to its drawings had been infringed. The firm sued for financial compensation for the allegedly wrongful use of its drawings before the Maritime and Commercial Court in Copenhagen.

The essential issue was whether the legal proceedings could be rightfully brought before a Danish court or whether the case should be dismissed in its entirety.

The defendants argued for dismissal, claiming that Turkey was the correct jurisdiction, as this was where the ships had been built and therefore where the alleged infringement/damaging actions had taken place. However, the plaintiff claimed that Denmark was the correct jurisdiction, since this was where the damage had occurred and where it had suffered financial loss.

Decision

The court noted that the alleged harmful actions had taken place in Turkey, which was also where the defendants were domiciled. Moreover, evidence had to be produced in Turkey. The court rejected the view that the Danish courts had jurisdiction to hear the case simply because the financial loss had occurred in Denmark. According to the court, such an interpretation would broaden the scope of the delictual rule, as a plaintiff would thus in any case be able to bring a legal action in the country of its own domicile.

The court concluded that the case had not been brought before the correct jurisdiction, and it was consequently dismissed.

Comment

The Maritime and Commercial Court judgment is in line with a previous ruling of the Eastern Division of the Danish Court,(2) which also concerned IP rights that had allegedly been infringed by a foreign company abroad. The court dismissed the idea that Denmark was the appropriate forum because:

• the alleged harmful actions had not occurred in Denmark; and
• the actions had had a negative impact on the plaintiff's income in foreign countries only.

It was insufficient that the plaintiff was domiciled in Denmark and that the company would enter the financial loss in its Danish accounts.(3)

This latest Maritime and Commercial Court judgment supports the interpretation that a distinction must be made between damage and loss, and that a financial loss alone cannot result in jurisdiction being in Denmark. However, the Supreme Court has not had an opportunity to rule in this matter; until then, the Maritime and Commercial Court judgment provides clear guidance in terms of interpreting the wording of the delictual rule.

For further information on this topic please contact Peter Schradieck at Plesner by telephone (+45 33 12 11 33), fax (+45 33 12 00 14) or email (psc@plesner.com).

Endnotes

(1) May 1 2012.

(2) U1998.1078 Ø

(3) This case was regulated by the Lugano Convention and not the Danish Administration Act.