Concurrence SARL v (1) Samsung Electronics France SAS; and (2) Amazon Services Europe Sarl (Case C-618/15)

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In its decision in Concurrence SARL v (1) Samsung Electronics France SAS; and (2) Amazon Services Europe Sarl (Case C-618/15) the CJEU found ‘special jurisdiction’ under Article 5(3) of the Brussels Regulation for the courts of France to hear an action for infringement of the terms of a selective distribution agreement by virtue of websites, accessible in France but operated in other Member States, selling products covered by the agreement.

Facts

In March 2012 Concurrence (a French retailer of consumer electronics) concluded a selective distribution agreement with Samsung for high end products, namely Samsung’s ‘ELITE’ range. This agreement included, in particular, a provision prohibiting the sale of the ELITE range products on the internet.

A dispute arose between the parties. Samsung accused Concurrence of breaching the selective distribution agreement by selling the ELITE products on its website. In response, Concurrence contested the legality of the terms of the Agreement alleging that these were not uniformly applied to all distributors, some of whom marketed the products in question on several Amazon websites without any response from Samsung. Samsung informed Concurrence of the termination of their commercial relationship with effect from 30 June 2013.

Concurrence commenced French legal action with a view to obtaining an interim order declaring the prohibition on the sale of the ELITE range on the internet imposed by the selective distribution agreement unenforceable against it and requiring Samsung, in consequence, to continue to supply it with the products covered by that agreement. Concurrence also brought proceedings against Amazon seeking to obtain an interim order requiring the withdrawal of any offers for sale of a number of Samsung’s ELITE range products from its Amazon.fr, Amazon.de, Amazon.co.uk, Amazon.es, and Amazon.it websites.

The Commercial Court in Paris held that it did not have jurisdiction over the Amazon websites operating outside the French territory (because they were not directed at the French public) and found that there was no need for interim measures in connection with Concurrence’s claims against Samsung. Concurrence’s claims were therefore dismissed in their entirety. Concurrence appealed and The Paris Court of Appeal referred the matter to the CJEU asking a question regarding the interpretation of Article 5(3) of the Brussels Regulation.

Article 5(3): ‘Special’ jurisdiction

The general rule is that a Defendant should be sued in the Member State in which they are domiciled. However, Article 5(3) of the Brussels Regulation provides an exception to the general rule for matters relating to tort providing that a person domiciled in a Member State may be sued in another Member State in the courts for “the place where the harmful event occurred or may occur”.

The CJEU’s decision

The CJEU were asked how Article 5(3) should be interpreted in the present case, namely a case looking to establish ‘special’ jurisdiction in an action for infringement of the prohibition on resale outside a selective distribution network resulting from offers, on websites operated in various Member States outside France, of the Samsung ELITE products covered by the distribution agreement.

The CJEU noted that the expression “the place where the harmful event occurred or may occurred” in Article 5(3) is intended to cover both the place where the damage occurred and the place of the event giving rise to it; however, in this case, the CJEU was solely concerned with the place where the damage occurred.

According to settled case law, the rule of special jurisdiction is based on the existence of a particularly close connecting link between the dispute and the court of the place where the harmful event occurred. On the facts of the case, the CJEU identified two connecting factors to the courts of France:

1. Firstly, it was held that the infringement of the prohibition on resale outside of the selective distribution network is given effect by French law and it is the laws of France which govern the rights protected. A natural connecting link therefore exists between the dispute and the French courts; and

2. Secondly, it was held that it is in the territory of France that the alleged damage to Concurrence occurs. Here, the alleged damage was Concurrence’s reduction in the volume of its sales in France because of the sales made by the Amazon websites in breach of the conditions of the network. It was irrelevant that the Amazon websites supplying the Samsung ELITE products operated in other Member States so long as the events which occurred in those Member States resulted in or may result in alleged damage in France (this was for the national court to decide).

To summarise, jurisdiction was therefore conferred on the French courts to hear this dispute and the case will now return to France for a determination of liability against both Samsung and Amazon for alleged damage suffered by Concurrence in France.

Link to Judgment:

Judgment Date: 21 DECEMBER 2016

French jurisdiction covers overseas websites selling to French consumers where French courts are seized of a selective distribution dispute

 

 

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