Powell Duffryn plc v Wolfgang Petereit.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Writing for the Court: Sir Gordon Slynn
• ECLI: ECLI:EU:C:1991:431
• Date: 20 November 1991
• Docket Number: C-214/89
• Procedure Type: Reference for a preliminary ruling

Important legal notice

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61989C0214

Opinion of Mr Advocate General Tesauro delivered on 20 November 1991. - Powell Duffryn plc v Wolfgang Petereit. - Reference for a preliminary ruling: Oberlandesgericht Koblenz - Germany. - Brussels Convention - Agreement conferring jurisdiction - Clause in the statutes of a company limited by shares. - Case C-214/89.

European Court reports 1992 Page I-01745
Swedish special edition Page I-00001
Finnish special edition Page I-00029

Opinion of the Advocate-General

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Mr President,

Members of the Court,

1. These proceedings concern certain questions referred to the Court by the Oberlandesgericht (Higher Regional Court), Koblenz, for a preliminary ruling on the interpretation of Article 17 of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as amended by the 1978 Accession Convention.

2. I shall briefly recall the facts underlying these proceedings, referring for a more detailed account to the Report for the Hearing.

In 1979, and then in 1980 and 1981, Powell Duffryn Plc, an undertaking governed by English law, participated in the increase of capital in IBH-holding AG (referred to as "IBH"), an undertaking governed by German law, and subscribed for shares in it.

On 28 July 1980 the statutes of IBH were altered in general meeting and a new clause was inserted into Article 4 of the statutes with the following wording:

"By subscribing for or purchasing shares or interim certificates the shareholder submits with regard to all disputes with the company or its organs, to the jurisdiction of the courts ordinarily competent to entertain suits concerning the company." It should be emphasized that Powell Duffryn took part in the meeting and was therefore present when the amendment was introduced and approved by a show of hands.

Subsequently to the declaration of insolvency of IBH, Mr Petereit, a lawyer acting as the trustee in bankruptcy, commenced proceedings before the Landgericht (Regional Court), Mainz, maintaining that Powell Duffryn had not fulfilled its obligations under the agreement to subscribe for shares, and seeking reimbursement of dividends wrongly paid. Powell Duffryn contended that the Landgericht Mainz lacked jurisdiction but the latter, by interlocutory decision, declared itself to have jurisdiction, and considered that the jurisdiction clause contained in Article 4 of the statutes was valid under Article 17 of the Convention.

Powell Duffryn appealed against that decision to the Oberlandesgericht, Koblenz, which stayed the proceedings and, in essence, referred the following questions to the Court for a preliminary ruling:

1. Does a jurisdiction clause in the statutes of a company limited by shares constitute an agreement conferring jurisdiction within the meaning of Article 17 of the Convention, and must this question be answered differently depending upon whether the shareholder subscribes for shares or purchases existing shares.

2. If the first question is answered in the affirmative:

(a) does a written declaration of subscription for and acceptance of shares, on the occasion of an increase in capital, comply with the requirements for writing laid down in the first paragraph of Article 17;

(b) does the jurisdiction clause satisfy the requirement that the dispute must arise in connexion with a particular legal relationship within the meaning of Article 17;

(c) finally, does the jurisdiction clause also cover claims to payment arising out of a contract for the subscription of shares and claims to the repayment of wrongly paid dividends?

3. The main point to be decided is therefore whether a jurisdiction clause contained in the statutes of a company limited by shares constitutes an agreement conferring jurisdiction within the meaning of Article 17, thus complying with the formal requirements laid down in that article.

Article 17, in the wording formulated in the Accession Agreement in respect of Denmark, Ireland and the United Kingdom of 1978, provides for the situation in which "the parties, one or more of whom is domiciled in a Contracting State, have agreed that a court or the courts of a Contracting State are to have jurisdiction to settle any disputes which have arisen or may arise in connection with a particular legal relationship", as well as requiring that "such an agreement conferring jurisdiction shall be either in writing or evidenced in writing, or, in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware."

In view of the terms of the aforementioned provision, the question to be determined in the first place is whether the provision in question contained in the statutes (the clause conferring jurisdiction) is of a contractual nature within the meaning of Article 17. In order to reply to that question it is essential to clarify as a preliminary point the scope of the concept of an agreement between the parties (literally "if the parties ... have agreed ...") referred to in Article 17.

On that point it is clear that an autonomous meaning, and thus one common to all the Contracting States, may be attributed to concepts used in the Convention, where they are not defined by it, or regard may be had to national law. And it is well known that the Court has not in principle opted for the "national" interpretation or for an autonomous interpretation, but has allowed that choice to be determined by an examination of the individual concepts in order to establish on a case-by-case basis which of the two options is likely to contribute most fully to the efficacy of the Convention. (1)

Nevertheless, in its most recent judgment the Court has shown a clear preference for the autonomous interpretation of the Convention, (2) to the extent to which it may be affirmed that practice in the matter has developed towards a situation in which there exists a general rule (autonomous interpretation) subject to exceptions (renvoi to national law).

I therefore consider that the concept of an agreement between the parties within the meaning of Article 17 must be interpreted in an autonomous manner. In so doing, I am taking account both of the objectives and of the scheme of the Convention, and in particular, therefore, of the objective of avoiding divergences in the application of the Convention itself, and of thus ensuring greater legal certainty by means of a clear and uniform interpretation for all the Contracting States, and also of the general principles common to all the national legal systems.

4. Indeed a comparison of the various legal orders of the Member States demonstrates, on the one hand, that the nature of corporate relationships and in particular - of relevance here - the relationships between a company and its shareholders, are not treated uniformly, although at the same time the differences do not entail substantially different consequences.

In fact, in the legal systems in which the contractual conception prevails, and they are the largest majority, it is clearly established that the obligation stemming from status as a shareholder may subsist irrespective of the will of the individual. Thus, for example, it is not disputed that a resolution adopted by a majority at a meeting of the company, which in principle resists inclusion in any contractual classification, is binding on all the shareholders including those in disagreement, and on persons who subsequently become shareholders. Conversely, in the legal systems where the institutional concept prevails, whereby the statutes (and indeed the deed of incorporation) are sui generis acts having the value of objective law for the shareholders, it may be that certain clauses of the statutes are enforceable only against those who expressly consented to them, in the strict contractual sense of the term.

The contractual-institutional dichotomy in the categorization of corporate relationships seems to me in the end rather theoretical and thus of little relevance in the solution of the problem in question. What is important, in my opinion, is rather the fact that, regardless of the view adhered to and of the academic discussion on this subject, there is underlying the corporate phenomenon an expression of an intention to enter into legal relations which manifests itself in the deed of incorporation of the company, of which the statutes form an integral part, which leads to close links being established between the shareholders and between the shareholders and the company, reciprocal obligations which are provided for most fully and completely in the statutes and, for present purposes, are in essence at least analogous to contractual obligations in their effects.

5. That is specifically confirmed in the Peters judgment (3) in which the...