Avoidance of foreign proceedings through “torpedo lawsuits”

Already by choosing the court with the filing of a lawsuit, in some cases the outcome can be influenced and costs can be reduced. Examples:

  • Letter of claim from a foreign consumer directly to the German manufacturer
  • Summons of the German manufacturer to evidence proceedings before French courts by which the party at the end of the supply chain wants to secure direct claims

International Civil Procedure Law often offers a choice of competent courts. In addition to the court with jurisdiction at the defendant's place of business, there may be a court at the place of performance in contractual disputes or a court at the place of the harmful event in disputes of tort, the latter even in two forms: the place of action and the place where the damage occurred. This gives the "quicker" plaintiff the possibility to move the proceedings to the country he prefers (e.g. to his registered office).

The unification of European civil procedure law ensures that the action brought first has priority (if it does not violate a choice of court agreement) and that the judgment is recognised in the other Member States. This means that the action brought first often determines in which country the claims will be decided. A second decision by the courts of the other Member State is excluded.

Private international law (choice of law) is also unified, in particular via the Rome I Regulation (Regulation (EC) 593/2008 on the law applicable to contractual obligations) and the Rome II Regulation (Regulation (EC) 864/2007 on the law applicable to non-contractual obligations). However, uniform application is not always assured. Courts are often inclined to let arguments on the application of their home law prevail.

It pays to be quick!

One example in which bringing an action in France has proved successful is claims by buyers in France who do not have a contractual relationship with the German-based manufacturer or supplier because at least one trading level was interposed. In such cases, French law provides for a direct claim by the other parties in the supply chain against the previous seller. German manufacturing companies often find themselves surprisingly exposed to claims that far exceed the volume of the part they supplied.

The ECJ has clarified important issues in this regard that safeguard the strategy. There is a place of jurisdiction at the place of manufacture of the product. Thus, provided it is a product manufactured in Germany, the manufacturing company can sue for a declaration that the claimant is not entitled to any claims before the court having jurisdiction for the place of its plant. The ECJ also clarified in 2017 in the HanseYachts decision that the "référé", an independent evidentiary procedure that typically precedes court proceedings in France, does not bar the bringing of an action. Already at this point in time, when a German company is involved in such evidence proceedings, it may therefore be appropriate to have it clarified in Germany that there are no direct claims by other parties in the supply chain.

Practical advice: If you receive claim letters or summonses to proceedings abroad and the claimant is not your customer, contact us immediately. If the product in dispute was manufactured in Germany (not in a factory abroad), the situation can often be resolved cost-effectively in Germany.

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