Information Technology Reference
In-Depth Information
about jurisdiction, so that in case of litigation they do not know which court will
be competent. The basic principle, set forth by Art. 2(1) of the Regulation, is that
“Subject to this Regulation, persons domiciled in a Member State shall, whatever
their nationality, be sued in the courts of that Member State.” The first problem to
solve regards the determination of the domicile of the parties, in light of the consid-
eration that “with contracts made over the Internet, it is difficult to determine where
the party is domiciled, even though the plaintiff can identify the party and locate the
transaction” (Wang 2008). Art. 60(1) gives the solution and says that “a company
or other legal person or association of natural or legal persons is domiciled at the
place where it has its: (a) statutory seat, or (b) central administration, or (c) principal
place of business.”
10
We can assume therefore that
SuperICTResources
is domiciled
in Germany and
SaaSforyou
is domiciled in the Netherlands.
In order to assess whether German or Dutch courts will be competent, it is neces-
sary to refer to Art. 5(1), which sets a so-called 'special jurisdiction'. To be more
precise, a person or company, domiciled in an EU Member State, may be sued in
another Member State (contrary to the principle of Art. 2) “in matters relating to a
contract, in the courts for the place of performance of the obligation in question.
11
”
The expression “place of performance of the obligation in question” seems rather
obscure and of difficult practical implementation: point (b) of Art. 5(1) specifies
with this regard that this place shall be “in the case of the provision of services, the
place in a Member State where, under the contract, the services were provided or
should have been provided.”
Subsequent literature reasonably pointed out that this criterion is likely to
encounter major difficulties when applied to e-commerce scenarios (Gillies 2001
12
;
Wang 2008
13
). In our view, in case of Grid services (and the same applies to Cloud
services), it is extremely difficult, if not impossible, to assess the place of provision
of the services, so that the application of the relevant provision of the Regulation
encounters major obstacles. The statement, proposed in the literature as regards
Internet, that “businesses fear that the determination of Internet jurisdiction could be
uncertain because unlike paper based contracts, online contracting is not executed in
one particular place” (Wang 2008), is even truer in a Grid/Cloud scenario. The solu-
tion to this issue is left to the courts that have to implement the Regulation, when a
10
Art. 60(2) sets a special rule for British and Irish companies: “For the purposes of the
United Kingdom and Ireland 'statutory seat' means the registered office or, where there is
no such office anywhere, the place of incorporation or, where there is no such place
anywhere, the place under the law of which the formation took place.”
11
Art. 5(1)(a).
12
“Whilst it is to be applauded that the European Union sought to distinguish between the
place of performance of goods and services, what definition will be given for the place of
performance of digital goods or services purchased on-line has yet to be tested.”
13
According to Article 5(1)(b) of the Brussels I Regulation, the place of performance should
be deemed to be the place of delivery. Since it is very difficult to ascertain the place of
performance with digitalized goods involving online delivery, in my opinion, the recipient's
place of business should be considered as a connecting factor.”
