Case law Developments in PIL

CJEU Rules on Formal Validity of Online Jurisdictional Clauses

On 24 November 2022, the Court of Justice delivered an interesting judgment on the validity of a digital jurisdictional clause, i.e. the general terms and conditions containing the clause was accessible from a hypertext link mentioned in the written contract (C-358/21, Tilman, already commented here by Krzysztof Pacula and here by Geert Van Calster). In a nutshell, the Court held that such a clause is valid based on the formal requirements laid down in the Lugano II Convention (and, by analogy, in Brussels I bis Regulation) ensuring the parties’ consent to the clause, without the need for a click-wrapping system. Here lies the very point that differentiates the present case from previous ones (in particular C-322/14, Jaouad El Majdoub).

The Facts

A dispute arose between Tilman, a Belgian-based company and one of its clients, Unilever, established in Switzerland, concerning unpaid invoices. Unilever challenged the international jurisdiction of the Belgian courts seized by Tilman, relying on a jurisdiction clause in favour of the English court. This clause appeared in Unilever General Terms and Conditions (GTC) but these were not directly attached to the main contract; instead, they were only accessible on the Internet via a hypertext link mentioned in the contract. Plus, the hypertext link did not directly give access to the GTC but to a website, access to which allows those general terms and conditions to be viewed.

Before the Belgian Court of cassation, Tilman invoked a violation of the formal requirements of the Lugano II Convention – which corresponds to Article 23 of Regulation 44/20021 Brussels I – with regard to the jurisdictional clause and, therefore, the invalidity of the clause for lack of informed consent on its part.

The Issue at Stake

In this context, the Belgian court asked the Court of justice whether, under Article 23, §1, a) and §2, of the Lugano II Convention, consent to a jurisdiction clause can be deduced from a hyperlink inserted in a written contract, without any ‘obligation’ to click on that link.

The Court answered positively, confirming that business life is increasingly digital, including in its ‘legal dimension’, and that the main principles of contract law must thus adapt to it. This is the case of consent which is seen as genuine even in the digital sphere.

 The Court of Justice Reasoning

The decision of the Court of justice provides for a three-steps response.

First, (Non-)Impact of Brexit

Since the jurisdictional clause was stipulated in favour of the English court, the Court could not ignore the question of the geographical and temporal scope of the Lugano II Convention. After Brexit, the United Kingdom was refused access to the Lugano Convention (see also here and here). The applicable instrument for assessing the validity of the clause could be determined either at the date of its conclusion or at the date of the judicial proceedings. Since the issue at stake here was Brexit, i.e. the modification in time of the scope of application of EU law (including the Lugano II Convention), the Court of Justice chose the second option (for a discussion on this question, see here).

The Court rules that the legal action – the jurisdiction clause producing effects only on the date of the judicial proceedings (see Case Sanicentral, 25/79, point 6) – was brought before 31 December 2020, the termination date of the transitional period provided for in Article 126 of the UK withdrawal agreement. The latter text maintains the application of Union law, including the law on judicial cooperation in civil matters and the international agreements such as the Lugano II Convention. Therefore, the convention is applicable in the present case. The issue will be more difficult in the future (cf. here about a Swiss decision refusing the application of the Convention); in particular, the 2005 Hague Convention on Choice of Court Agreements should be considered.

Second, Analogy with the Interpretative Framework of the “Brussels Regime”

As regards the interpretation of the Lugano II Convention, the Court recalls, in a very classical way, that it must follow the principles laid down by the previous caselaw concerning the provisions at issue contained in other instruments, including the Brussels Convention and the Brussels I and Ia Regulations, insofar as these provisions are drafted in similar terms.

Third, Condition of Validity of a Jurisdiction Clause in the Digital Ecosystem

In order to be valid, a jurisdiction clause must be concluded, inter alia, “in writing or orally with written confirmation” (Article 23, §1). The objective is to ensure that the parties’ consent to the clause is genuine. In case of a dispute, the assessment is left to the court on the basis of this EU substantive rule. In the context of the information society and e-commerce, proof of consent may also be based on “electronic means which provides a durable record of the agreement”. This is an expression of the principle – which is becoming more and more widespread in comparative and EU contract law – of assimilating electronic transmission to written form, with a view to simplifying the conclusion of online contracts. However, according to European caselaw, this does not imply that the clause conferring jurisdiction and the GCT mentioning it are “actually” recorded permanently by the parties (see point 44 of the judgment). This nuance is crucial. In order for electronic transmission to offer the same guarantees as the paper format, in particular as regards evidence, there mere “possibility” to save and print the information before the conclusion of the contract is seen as sufficient.

In the present case, the Court of Justice notes that the jurisdiction clause is stipulated in the GTC explicitly mentioned in the written contract concluded between the parties. This procedure complies with EU law, but it must be ensured that the GTC containing the jurisdiction clause have actually been “communicated” to the contracting party, here Tilman, the Belgian company. This is in principle the case, according to previous case law, “if that information is accessible by means of a screen”. Here, the written contract provided for a hypertext link to an Internet site where the general conditions could be accessed. It is therefore necessary, according to the Court, “that hypertext link functions and can be activated by a party exercising ordinary diligence”. The Court adds that it “equates a fortiori to evidence of communication of that information”.

This analysis is relevant, but it is unclear why it is an a fortiori reasoning. Viewing general conditions on a screen expresses the fact that digital access is effective. This is not the case in the presence of a hypertext link, as long as it has not been clicked on. And then, a key practical issue is how to prove that the link does not function: by taking a photo of the screen (screenshot) which displays an ‘error message’ after the hyperlink has been clicked on?

According to the Court, it is irrelevant that Tilman, the co-contractor, did not have a box to tick on the page of the website to express acceptance of those terms and conditions, nor that the page containing those terms and conditions did not open automatically when the website was accessed. The Court implicitly applies here a proportionality test between the requirement of informed consent and the objective of not hindering commercial exchanges. It is therefore up to the party who is invited to consult the GTC online to do so. A “click” and a reading online, on a screen, are no more demanding in a hyperconnected society than reading a paper document in an annex to a contract.

Finally, the Court allows itself an obiter dictum by referring to points b) and c) of Article 23, §1, in order to clearly situate the case in “international trade”. For the record, these provisions validate jurisdiction clauses concluded in a form consistent with international commercial practice, reinforcing the private autonomy of the economic operators. I am not convinced however that this adds anything to the interpretation and especially that it corresponds (i.e. using a hypertext link to refer to the GTC including a court agreement) to the very concept of usage of international trade. But this is an open question.

General Assessment

This solution must be approved for at least three reasons.

Firstly, outside the digital paradigm, economic operators are supposed to be aware of the GTC of the contract and in particular of the jurisdictional clause they contain. Indeed, the GTC are an important criterion for the financial balance of the commercial agreement.

Secondly, in line with its previous case law, the Court of justice follows a different analysis of contractual consent in B2B contracts than in B2C relationships. The formal requirements laid down in EU secondary law on B2C distance contracts cannot be transposed, by analogy, to the B2B context (see point 37, C-322/14, Jaouad El Majdoub).

Thirdly, the Court’s reading of Article 23(2) is part of a more global European political and legislative context: that of the emerging ‘digital by default principle’. In the e-Government strategy, it means that delivering services digitally is the preferred option through a single contact point (see here). According to the European Commission, the same should progressively apply in the judicial cooperation in civil matters. In its 2020 Communication on Digitalisation of justice in the European Union, the Commission proposed to make “the digital channel the default option in EU cross-border judicial cooperation” (point 3.2 and see here for an update on the topic). Reading this ambition for EU Civil Justice together with the “Brussels/Lugano Regime” (as interpreted in the present case), it shows that the EU legal system is working on providing a coherent framework for international economic exchanges in the digital ecosystem.

Marion is law professor at Artois University (France)

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