The Swedish Supreme Court on Third-Party Transport and Article 7(1)(b) Brussels I bis

In matters relating to the sale of goods, the “place of delivery” constitutes the decisive connecting factor under Article 7(1)(b) of the Brussels I bis Regulation (1215/2012). Even if it is clear from case law that this place shall be where the purchaser acquires “actual power of disposal” of the goods, a recurring issue is how that shall be interpreted when the transport is performed by an independent carrier. This issue arose for the Swedish Supreme Court in a dispute between a Swedish purchaser and a Polish seller. In a decision of March 18, the Supreme Court held that the physical control of the goods was transferred in Sweden and that the Swedish court therefore had jurisdiction as the place of performance.

Background

A Swedish company purchased a scaffolding system from a Polish company. The scaffolding system was to be transported by a third-party road carrier to Örebro, Sweden. Upon arrival, the Swedish buyer alleged that the goods were defective and initiated proceedings before a Swedish court.

The Polish seller contested Swedish jurisdiction, arguing that proceedings should be brought in Poland, where the seller company was domiciled. This lead the Swedish courts to assess whether the jurisdictional rule in Article 7(1) was met in the case at hand.

Pursuant to Article 7(1), the courts for the place of performance of the obligation in question also have jurisdiction in contractual matters. When it is a sale of goods case, the “obligation in question” shall be the place where the goods were delivered or should have been delivered under the contract, as prescribed for in Article 7(1)(b).

This contractual interpretation shall be done on the basis of autonomous EU law and not on the substantive law that would have been applicable if the court has jurisdiction (see e.g. Electrosteel, C-87/10, para 26). Under this autonomous EU law, the place of delivery is “the place where the physical transfer of the goods took place, as a result of which the purchaser obtained, or should have obtained, actual power of disposal over those goods at the final destination of the sales transaction”.

The Polish seller argued that the place of delivery was in Poland, on the ground that it was there that the carrier took possession of the goods. The court of first instance, however, held that the place of delivery was in Sweden. On appeal, that conclusion was reversed. The appellate court emphasised that the transport had been carried out under a separate contract between the purchaser and the carrier. On that basis, it found that the purchaser had already acquired actual power of disposal over the goods in Poland.

With references to Car Trim, C-381/08 para 58–62, the Supreme Court held that it is the place where the purchaser takes physical control of the goods that is relevant. Holding that this place was Sweden, the Supreme Court found that the Swedish court had jurisdiction.

One of the Supreme Court justices appended a separate opinion, observing that the method for determining the place of delivery remains unclear under EU law and that further guidance from the CJEU is needed. In the present case, however, he considered that the procedural framework precluded the Supreme Court from examining that issue.

Comment

It is easy to agree with the separate opinion that the determination of the place of delivery raises complex issues where transport is carried out by a third party. While the separate opinion considered that the Court was procedurally precluded from addressing those issues, it is nevertheless open to question why the Supreme Court did not make a reference to the CJEU. Given that only a limited number of cases are granted leave to appeal and that the issue concerns the interpretation of EU law, there are strong reasons to expect that such questions should be referred to the CJEU.