Case law Developments in PIL

The Volvo Case and the Spanish Supreme Court

In October 2021, the Spanish Supreme Court had the opportunity to show its willingness to follow the Court of Justice and to give an example of a good practice in a matter related to the application of Article 7(2) of the Brussels I bis Regulation.

The order (auto) of 7 October 2021, was delivered by the Plenary of the Civil Chamber, with M. Ignacio Sancho Gargallo as reporting judge, against the background of an action for damages suffered as a result of an infringement of competition law.

In the case at hand, the Spanish company Garutrans Gasteiz S.L. filed a claim against Paccar Inc. and its subsidiary DAF Trucks NV, domiciled, according to the lawsuit, in San Fernando de Henares (Spain). The case was assigned to the Commercial Court No. 3 of Madrid, which declared the application admissible. After the attempts to serve the process at the address indicated in the claim failed, the plaintiff indicated two new addresses, one in the United States and another in the Netherlands.

The Madrid court, by order of 18 January 2021, declared ex officio its lack of territorial jurisdiction and pointed to the commercial courts of Vitoria as competent, arguing the defendants have their registered office outside of Spain and the DAF trucks were acquired in Vitoria, where the plaintiff is domiciled.

By order of 12 April 2021, however, the Commercial Court No. 1 of Vitoria declared itself incompetent as well on the basis that three of the four trucks had been acquired in Navarra. The situation was therefore one of a negative conflict of jurisdiction.

The Supreme Court ruled that the Madrid court’s declaration of incompetence was premature, since according to Article 28, para. 1, of the Brussels I bis Regulation it should have summoned the defendants (NoA: the Regulation imposes such duty only in relation to defendants domiciled in a Member State other than the one where the judge seats; nothing is said about other defendants), so as to give them the possibility of appearing and accepting jurisdiction in accordance with Article 26 of the Regulation, or rejecting it through the procedural tool to the purpose. Only after, and only provided the defendant(s) does not appear, the court seised is entitled to analyse its jurisdiction and to declare ex officio it has none.

What is interesting about the order of the Supreme Court, however, is not the final conclusion, but the Court’s statements showing its awareness and disposition to follow the Court of Justice’s decision C 30/20, Volvo, in order to identify the place of the damage in the framework of Article 7(2) of the Brussels I bis Regulation.

The Volvo ruling corresponds to a request from a Madrid Court. There, the Court of Justice explicitly asserts that Article 7(2) of the Regulation determines both international and territorial jurisdiction. Moreover, the Court recalls that the centralisation of jurisdiction before a single specialised court may be justified in the interests of the sound administration of justice: as AG Richard de la Tour had suggested in his opinion, the technical complexity of the rules applicable to actions for damages for infringements of competition law provisions may militate in favour of such a centralisation of jurisdiction. In its absence, the courts of the place where the goods were acquired are territorially competent. This notwithstanding, should the buyer not have purchased the goods affected by the collusive arrangements in question within the jurisdiction of a single court, territorial jurisdiction is conferred on the courts of the place where the undertaking harmed has its registered office.

As already said, the Spanish Supreme Court did not need to apply the above-mentioned solutions to the case at hand, but profited from the occasion to endorse them and to explicitly revoke its previous understanding of Article 7(2) of the Brussels I bis Regulation.

Legal Secretary CJEU Full Professor PIL, University of La Laguna (Spain) Senior research fellow MPI Luxembourg (on leave)

2 comments on “The Volvo Case and the Spanish Supreme Court

  1. Matthias Lehmann

    Thanks very much for this update, Marta. What is very hard to understand about this case from an outside perspective is how the case got “assigned” from San Fernando de Henares to the Commercial Court no 3 in Madrid. Was this on the basis of some law that provides for specialised courts in antitrust matter? Or what was the precise reason?
    Also, the ruling of the Supremo that a court without jurisdiction should summon the parties to see whether they acquiesce to its jurisdiction seems odd. What shall be the legal basis for doing so?

  2. Sixto A. Sánchez Lorenzo

    Dear Matthias:
    San Fernando de Henares is a small town near Madrid with no judicial district, so that the alleged domicile of the defendant’s subsidiary is understood to be in Madrid. The claim is filed generically before the Madrid courts, which “in turn” assign the case to Commercial Court No. 3. As for the second question, it has a reasonable procedural justification: it is a question of determining the procedural moment at which a court can decline its international jurisdiction. When it is a question of exclusive forums that justify the jurisdiction of a foreign court, the declination of jurisdiction can be made at the stage of admission of the action. On the other hand, in any other case, the claim must be notified in order to guarantee the possibility of submission (prorrogatio fori) to the Spanish courts by the defendant. Once the time limit for answering the claim has elapsed, if the defendant does not appear in court, the court declares itself incompetent and terminates the proceedings: Arts. 36 and 38 of the Procedural Civil Code (Ley de Enjuiciamiento Civil). In the Spanish system, the judge must declare himself incompetent ex officio if the defendant does not appear, whatever his domicile

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