Wednesday, 28 January 2015

Financial Services Purchased from a Third Party and Jurisdiction - CJEU judgment in case C-375/15 Kolossa

Today the CJEU handed down its judgment in the Kolossa case (have a look at the blog entry about the AG's opinion as the CJEU followed its AG in all points). The Austrian resident Kolossa had purchased financial instruments issued by the British Barclays Bank. After the bearer bonds had lost all their value, Mr Kolossa filed a lawsuit against Barclays in front of an Austrian court which asked the CJEU for an interpretation of the Brussels I Regulation.

The CJEU holds that Art 15 Brussels I Regulation is not applicable to a case where a consumer purchased a financial instrument not directly from the issuer but from a professional intermediary. There has never been a contractual relation between Mr Kolossa and Barclays and a chain of contracts through which certain rights and obligations of Barclays are transferred to Mr Kolossa is not sufficient.

Regarding Art 5(1), the CJEU holds that - in contrast to the requirement laid down in Art 15 - the conclusion of a contract is not a condition for its application. It is nevertheless essential that a legal obligation freely consented to by one person towards another can be identified since the place of performance of this obligation determines jurisdiction. Although Barclays had certain obligations towards Mr Kolossa, there was no such legal obligation freely consented to by Barclays. 

The Austrian court wanted to know if its jurisdiction could then be based on Art 5(3). The claim for damages was based, among others, on the liability for the prospectus and breaches of other legal information obligations towards investors. Art 5(3) points at the 'place where the harmful event occurred'. This is either the place of the event giving rise to the damage (which in this case was where Barclays has its seat) or the place where the damage occurred. In the specific circumstances the damage occurred on Mr Kolossa's Austrian bank account, which is why Austrian courts have jurisdiction for these non-contractual claim.   

Finally, the CJEU held that in the context of determining the international jurisdiction under the Brussels I Regulation, a national court does not have to conduct a comprehensive taking of evidence in relation to disputed facts that are relevant both to the question of jurisdiction and to the existence of the claim. The court can, however, examine its international jurisdiction 'in the light of all the information available to it, including, the allegations made by the defendant'.  

1 comment:

  1. We will see how it improves in the future, now is still soon to examine if it's the correct decision but atleast it was made, as a corporate lawyers it would help us for sure, thanks