We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
20 March 2018
The issue of jurisdiction was at the centre of a recent action in the Limassol District Court, which dismissed the claimant's case at an early stage after hearing an application filed by the defendant challenging the jurisdiction of the Cyprus court.(1) The court based its ruling on Article 7(1) and (2) of the EU Brussels Regulation (1215/2012) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), which replaced the original EU Brussels Regulation (44/2001) with effect from January 10 2015.
The facts – according to the statement of claim filed by the claimant, a company operating in Cyprus – were as follows:
The claimant filed proceedings in Cyprus against the UK bank requesting damages on the grounds that:
The court noted that a fundamental precept of the EU Brussels Regulation is that a party should be sued in the member state of its domicile.(2) This is not an absolute rule, but is subject to exceptions set out in the regulation.
Among these exceptions to the general rule are those contained in Articles 7(1) and (2) of the recast regulation, which read as follows:
"A person domiciled in a Member State may be sued in another Member State:
(1)(a) in matters relating to a contract, in the courts for the place of performance of the obligation in question;
(b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be:
—in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered,
—in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided;
(c) if point (b) does not apply then point (a) applies;
(2) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur."
In reaching its decision, the court relied on European Court of Justice case law decided under the EU Brussels Regulation 2001, as the provisions of the recast regulation set out above are identical to the corresponding provisions of the earlier regulation.(3) It found as follows:
The decision clarifies the case law relating to the interpretation of Article 7(2) of the recast EU Brussels Regulation. It reaffirms the general principle that civil actions are to be brought against individuals and companies in the courts of the place where they are domiciled, except in specific instances where derogations from the general rule apply. These derogations are to be interpreted strictly so as not to create jurisdiction for the courts of the claimant's domicile unless the rule clearly produces that result.
In order to rely on the derogation provided in Article 7(2) of the recast EU Brussels Regulation, the claimant must establish that the harmful event or series of events giving rise to the damage took place in the EU member state where proceedings have been instituted.
For further information on this topic please contact Andreas Christofides at Elias Neocleous & Co LLC by telephone (+357 25 110 110) or email (email@example.com). The Elias Neocleous & Co LLC website can be accessed at www.neo.law.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.