delivered on 6 June 1985 (*1)

Mr President,

Members of the Court,

The plaintiff, AS-Autoteile Service GmbH, buys used motor-vehicle parts, in particular, clutches and clutch parts, reconditions them and sells them as replacement parts. In connection with its business it had dealings in spring 1977 with PAT, a company whose head office was in Meckenheim, near Bonn. The defendant, who is normally resident in France, was a shareholder in PAT. The plaintiff paid PAT a total of DM 1940949,95 for a number of deliveries, the last of which was on 9 September 1977. After the last delivery made by PAT differences of opinion arose over the quality of the goods supplied. The plaintiff brought a claim against PAT for the repayment of DM 1001476.95 on the ground that PAT had for the most part delivered only unusable scrap, instead of used parts suitable for reconditioning, as had been agreed. The plaintiff obtained default judgment for that amount in the Landgericht [Regional Court], Bonn on 5 April 1978. That judgment could not however be enforced, since PAT had become insolvent and an application for a winding-up order had been dismissed by order of the Amtsgericht [Local Court] Euskirchen of 5 May 1978 on the ground that there were insufficient assets to cover the cost of the proceedings.

The plaintiff asserted that the defendant had received sums of money from PAT in a total amount in excess of its claim against PAT, and that he was obliged to repay them to that company under the law on unjust enrichment. On the application of the plaintiff PAT's alleged claims in unjust enrichment against the defendant were therefore attached and transferred to the plaintiff for recovery. The plaintiff thereupon brought an action against the defendant on those claims before the German courts in the amount of DM 1008741.25 plus interest. The action was dismissed as inadmissible, on the ground that the German courts lacked jurisdiction.

In the judgment dismissing the claim in that action, the antecedent of the present proceedings, costs were awarded against the plaintiff. The defendant obtained an order against the plaintiff for the payment of those costs. To avoid enforcement of that order the plaintiff put forward a bank guarantee as security. Against the defendant's claim for the costs of the previous proceedings (about DM 40000) the plaintiff sought to set off the claims for unjust enrichment which had been attached and transferred to it for recovery and which it had unsuccessfully raised in those proceedings. In an application brought before the Landgericht [Regional Court] Baden-Baden, the plaintiff, relying on that right of setoff, claimed that the order to pay the costs of the previous proceedings should be declared unenforceable.

The Landgericht dismissed the application as inadmissible on the ground that the German courts had no jurisdiction. It left open the question whether the German courts could derive jurisdiction from Article 16 (5) of the Brussels Convention. In its view there could be no jurisdiction over an application to oppose enforcement whereby the applicant, whose claim in previous proceedings was unsuccessful for lack of jurisdiction, sought to defeat the defendant's claim for costs arising out of those proceedings by setting off the claim in which he was unsuccessful.

As permitted by Paragraph 566 a of the Code of Civil Procedure the plaintiff brought a direct appeal against that judgment before the Bundesgerichtshof. In order to arrive at a decision on the appeal the Bundesgerichtshof considered it necessary to obtain replies to three questions regarding Article 16 (5) of the Brussels Convention. It therefore referred the following three questions to the Court:

(1) Do actions to oppose enforcement within the meaning of Paragraph 767 of the German Code of Civil Procedure fall within the jurisdiction provision contained in Article 16 (5) of the Convention;

(2) Pursuant to Article 16 (5) of the Convention, in an action to oppose enforcement before the courts of the Contracting State in which enforcement is to take place, is it possible to resist enforcement by pleading a setoff in respect of a claim over which the courts of that State would have no jurisdiction if it were raised independently?

(3) Does the jurisdiction recognized by Article 16 (5) of the Convention cover proceedings in which the debtor, relying on a submission that the creditor's claim cannot be enforced, demands the return of the instrument of guarantee which he provided as security to avoid enforcement?

The plaintiff in the main proceedings, the Government of the United Kingdom and the Commission of the European Communities submitted observations regarding the reference.

Those observations are in agreement with regard to the answers to be given to the first question and to the closely related third question. Both questions should, they say, be answered in the affirmative, since an action to oppose enforcement falls in principle within the scope of Article 16 (5) of the Brussels Convention. In view of the factual circumstances described above the question regarding the return of the instrument of guarantee should also be answered in the affirmative.

There are differences of opinion, however, with regard to the second question, whether in an action to oppose enforcement claims may be pleaded over which the court hearing the matter, in the State in which enforcement is to take place, would have no jurisdiction under the general provisions of the Brussels Convention. The plaintiff in the main proceedings argues that the answer to that question should be in the affirmative, while the Government of the United Kingdom and the Commission are of the opposite view.

My views on the matter are as follows:

The plaintiff in the main proceedings would like an affirmative reply to be given to that question. It takes the view that the wording of the Brussels Convention, which attributes exclusive jurisdiction over actions to oppose enforcement to the courts of the ‘Contracting State in which the judgment has been or is to be enforced’, implies that those courts have exclusive jurisdiction over the objections raised.

The Government of the United Kingdom and the Commission, on the other hand, take the opposite view. At first sight, they argue, there is something to be said for the idea that in the interest of the effective administration of justice the court of the place of enforcement should be able to determine all claims which may be associated with the enforcement of a judgment. There are compelling reasons of principle, however, for opposing that result. Article 16 confers exclusive jurisdiction and must, the Court has held, be interpreted strictly. It does not create any additional jurisdiction over new claims or objections which would establish or, as in this case, extinguish liability. The departure from the general jurisdictional rules of the Brussels Convention laid down in Article 16 is only justified where there are objective reasons connected with the proper administration of justice: the basic provision of Article 2 (jurisdiction of the courts of the State where the debtor is domiciled) must not be overridden without compelling reason.

The intention and scheme of the Brussels Convention clearly favour the latter view.

The Brussels Convention makes it considerably easier for a plaintiff to obtain recognition and enforcement of a judgment. Conversely — as a counterbalance, in a way — Title II of the Convention includes provisions protecting defendants. In view of the fact that the recognition and enforcement of judgments is facilitated the defendant must be protected from being ‘caught by surprise’ by proceedings brought before courts which do not have jurisdiction, hampered in his defence and pursued on the basis of such judgments.

That would however be the case if under Article 16 (5) he was obliged to defend an application to oppose enforcement based on a setoff with a claim over which the courts of the State of enforcement, according to their own final decision, had no jurisdiction. Although in the first proceedings the defendant was not obliged to reply to the claim made against him, since it was brought before a court which had no jurisdiction, he would still have to reply to it in connection with the proceedings on costs, merely in order to recover the costs incurred by him in his defence against the inadmissible claim. The defendant would thus be forced to defend himself against the claim even though in the proceedings in which it was raised he was not obliged to do so.

As the Landgericht Baden-Baden correctly stated in its judgment of 4 November 1983,‘having regard to the objectives and the protective nature of the jurisdictional provisions such a result cannot represent the law’.

The conclusion proposed by the United Kingdom and the Commission is also in accordance with Article 16 (5) of the Convention. In the first place, the provisions regarding exclusive jurisdiction constitute exceptions which must, as I have already said, be interpreted strictly. Furthermore, the particular areas which fall under Article 16, certain disputes regarding tenancies, companies, registers, industrial property and the enforcement of judgments, are matters which, because of their particular difficulty or complexity, require that the court having jurisdiction should be particularly familiar with the relevant national law. As the Court held in its judgment of 14 December 1977 with regard to the exclusive jurisdiction provided for by Article 16 (1), ‘it is preferable, in the light of their complexity, that [rules regarding tenancies of immovable property] be applied only by the courts of the States in which they are in force’.

Such a ‘proximity to the matter’ can certainly be required of the competent court in matters involving the provisions on the ‘recourse to force, constraint or distraint on movable or immovable property in order to ensure the effective implementation of judgments and authentic instruments’, that is, in deciding on the lawfulness of measures of enforcement. It does not however constitute a sufficient ground for granting exclusive jurisdiction over a claim in ancillary proceedings where there was no jurisdiction over the same claim in the main proceedings and a final decision was given on that absence of jurisdiction.

3. Although the Bundesgerichtshof's third question regarding the return of the instrument of guarantee is independent of questions 1 and 2, I do not think it is necessary for the Court to give an answer to that question either. I share the view expressed by the plaintiff in the main proceedings that the claim for the return of the instrument of guarantee is so closely connected with the enforcement procedure that jurisdiction over the one cannot be separated from jurisdiction over the other.

In view of the foregoing I propose that the Court give the following answer to the reference of the Bundesgerichtshof:

Article 16 (5) of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters must be interpreted as meaning that in an action to oppose enforcement before the courts of the Contracting State in which enforcement is to take place it is not possible to resist enforcement of an order for costs by pleading a setoff in respect of a claim over which it has been held in a final judgment of a court in that State that those courts would have no jurisdiction if it were raised independently.

* * *

(*1) Translated from the German.

(*1) 1

See Judgment of the Court of 14 December 1977 in Case 73/77, Sanders v van der Putte, [1977] ECR 2383, 2390 et seq.

See Judgment of 15 November 1983 in Case 288/82, Duijnstee v Goderbauer, [1983] ECR 3663, 3676 et seq.

(2) See footnote 1.

(3) See the remarks of Mr P. Jenard in his Report on the Brussels Convention, under the heading ‘Enforcement of Judgments’ (OJ 1979, C 59, p. 36).