March 2024 – In its decision of 8 February 2024 (C 566/22), the Court of Justice of the European Union (the ECJ) has finally resolved the long-term practical question (and debate among legal practitioners) whether, in the case of a purely national relationship without the presence of a foreign element or link to several legal orders, contracting parties may choose the jurisdiction of the judicial authorities of any EU Member State. The response is YES.
This landmark decision is a clear affirmation of the parties' autonomy to determine the jurisdiction of the judicial authorities. Simply put, if two Slovak entities enter into an agreement under Slovak law without a link to another Member State or non-Member State, the parties are not limited to designate the choice of jurisdiction to Slovak courts only but may choose the judicial authority of any Member State. This applies not only to entities domiciled in a Member State, but also to any third-country entities.
Background of the case
The ECJ ruled on a preliminary question raised by the Supreme Court of the Czech Republic, whether the parties to a dispute, being two Slovak entities, conferred validly the jurisdiction of their contractual relationship to the locally competent Czech court.
Article 25(1) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the Brussels Ia Regulation) stipulates: “If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State.”
In the grounds of its decision, the ECJ stated that, “an agreement conferring jurisdiction such as the one at issue in the main proceedings reflects mutual trust in the administration of justice in the European Union, and thus contributes to maintaining and developing an area of freedom, security and justice, inter alia, by facilitating access to justice.”
In light of the above, the ECJ ruled: “Article 25(1) of Brussels Ia Regulation must be interpreted as meaning that an agreement conferring jurisdiction by which the parties to a contract who are established in the same Member State agree on the jurisdiction of the courts of another Member State to settle disputes arising out of that contract is covered under that provision, even if that contract has no other connection with that other Member State.”
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