The post below was written by Matthias Lehmann, who is Professor of Private International Law at the University of Vienna. It is the fourth contribution to the EAPIL on-line symposium on the ruling of the Court of Justice in the case Hrvatske Sume d.o.o. Zagreb v BP Europa SE. The previous posts were authored by Peter Mankowski, Adrian Briggs and Bernard Haftel.
Readers are encouraged to share their views by making comments to the posts. Those wishing to submit longer contributions for publication are invited to get in touch with the managing editor of the blog, Pietro Franzina, at pietro.franzina@unicatt.it.
The CJEU decision already reviewed in this blog-post is more than doubtful from a comparative law viewpoint. It ignores the fact that in some legal systems a claim for unjust enrichment may be based on a tort. This is the case, for instance, in German law, where the unlawful interference with another’s rights may lead to a so-called Eingriffskondition (unjust enrichment based on intervention) under sec. 812(1) of the German Civil Code (BGB). It is also true in Swiss law, English law and in the law of most U.S. states, which equally allow restitutionary claims in cases of torts. Even though these are not EU Member States, their laws may apply to claims brought under the Brussels Ibis Regulation. These legal systems illustrate that the gamut of unjust enrichment may cover facts that also sound in tort. Comparative law is infinitely richer than the CJEU accepts. To say that a claim for restitution is never based on a harmful event reminds of the attitude of Palmström in Christian Morgenstern’s poem “The Impossible Fact“: “that which must not be, cannot be”.
A natural reading of the term “quasi-delict” in Art 7(2) Brussels Ibis suggests that it would cover claims for restitution in case of wrongs. The CJEU has chosen a different path by excluding these claims from the scope of the provision altogether. This follows from a purist understanding of the term “unjust enrichment” which, according to the CJEU, should not overlap with any other legal category. This is remarkable given that the term “unjust enrichment” does not even feature in the Regulation. It is also astounding that the CJEU adopts quite a different approach with regard to Art 7(1) Brussels Ibis: The Court expressly recognises that this head of jurisdiction, which does not even provide an open-ended term like “quasi-contractual”, covers an unjust enrichment claim that “is closely linked to a pre-existing contractual relationship between the parties” (para 51). In effect, while being very open-minded with regard to Art 7(1), the Luxembourg judges are particularly narrow-minded with regard to 7(2). It is the old Kalfelis mistake again: giving priority to contract over tort in matters of jurisdiction.
The CJEU’s grammatical argument for this narrow-mindedness is the mention of “harm” – via the expression “harmful event” – in Art 7(2) Brussels Ibis. From the provision’s use of this term, the Court concludes that unjust enrichment is excluded because it is not based on the harm of the victim, but on the enrichment of the other party. Yet this ignores that Art 7(2) Brussels Ibis uses the expression “harmful event” not as a definitional element for tort/delict or quasi-delict, but as part of the connecting factor to determine the competent court for those claims. The difference is important because even in case of unjust enrichment a harm may exist. This is illustrated by unjust enrichment based on intervention (Eingriffskondiktion): German law expressly provides that the unjust enrichment in these cases must be “at the cost” (auf Kosten) of the victim. This is merely another way of saying that the victim must suffer a loss, or “harm”.
Thus, the existence of a claim for unjust enrichment does not mean that a place where the harmful event occurred cannot be identified. Retaining the place of harm as the decisive criterion for determining the competent court over claims of Eingriffskondiktion and similar restitutionary claims for torts also makes sense: It offers the victim the benefit of having the same court deciding on the tort and related claims, which is exactly what Art 7(2) Brussels Ibis aims at by mentioning “quasi-delicts”. Using the place of the harmful event as the connecting factor in these cases also does not violate the legal nature of unjust enrichment claims, but merely illustrates the different focus of procedural and substantive law.
One could, however, save the reasoning of the CJEU by creative interpretation. A case could be made for contending that the CJEU did not want to exclude claims such as those mentioned under German, English, Swiss or U.S. state law from the scope of Art. 7(2) Brussels Ibis because it did not rule on them, but on a different type of claims under Croatian law. Arguably, the CJEU adopted an autonomous understanding of “unjust enrichment” independent of national or comparative law, which does not cover cases that require harm as a condition for a restitutionary claim. If in the future the Court would be faced with such a claim, it could allege that this situation was not the same as that of the Hvratske Šume ruling because the latter only concerned “unjust enrichment” in an autonomous European sense. This would then pave the way for qualifying the particular cases of Eingriffskondiktion and similar claims as being “quasi-delicts”.
Even if this creative-restrictive reading of the CJEU’s ruling were rejected, one must not overestimate its impact. The result of excluding cases involving unjust enrichment from Art 7(2) Brussels Ibis do not seem disastrous: The claimant will have to use the base rule of Art 4 Brussels Ibis and sue the defendant at the place of its domicile. This will in most cases coincide with the place where the defendant has acted, and thus with part of the Art 7(2) jurisdiction. And even if not, the place of domicile of the defendant will often be the place where the enrichment has taken place. The domicile of the enriched party could thus function as a kind of “default head of jurisdiction” for unjust enrichment claims.
The damage done by the CJEU is thus rather small in practical terms. It will mainly concern cases in which the party having borne the loss from an unjust enrichment is not the claimant, but the defendant. A case in point is a claim for a negative declaration that no unjust enrichment claim exists. Following the CJEU approach in Folien Fischer, such a claim could be brought at the domicile of the party that is alleging or likely to allege the unjust enrichment, i.e., at the domicile of the party that has suffered rather than benefitted from such enrichment. But this awkward result is the product of the CJEU allowing claims for negative declarations under the Brussels Ibis regime rather than a problem specific to unjust enrichment.
Many thanks to Amy Held, Felix Krysa and Verena Wodniansky-Wildenfeld for their comments on the draft post.
Dear M. Lehmann
I note that your argument (also advanced by Professor Mankowski in his contribution) was actually addressed by the AG in his Opinion (which the Court essentially followed). See, in particular, footnote 81 of the Opinion: “I would emphasise that the crucial point is not that such a claim seeks restitution of property. As I stated in point 41 of this Opinion, the classification of a claim depends on the source of the obligation on which it is based, not on the remedy sought by the applicant. Thus, in my view, claims for restitution based on a ‘harmful event’ (compare with the common law concept of restitution for wrongdoing) do come within Article 5(3) of the Brussels I Regulation (see, to the same effect, Magnus, U. and Mankowski, P., op. cit., p. 272). …”. In that context, the term “unjust enrichment” as the basis for the restitution claim was thus used in a narrow sense, excluding cases of claims for restitution based on a wrong.