1 By order of 25 May 1993, received at the Court on 16 June 1993, the Bundesgerichtshof (Federal Court of Justice) referred to the Court for a preliminary ruling under the Protocol of 3 June 1971 on the interpretation by the Court of Justice of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (OJ 1972 L 299, p. 32), as amended by the Convention of 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland (OJ 1978 L 304, p. 1) (hereinafter `the Brussels Convention'), on a number of questions on the interpretation of Articles 13 and 14 of that Convention.
2 Those questions were raised in separate proceedings between Mr Brenner, a self-employed master joiner, and Mr Noller, employed as a textile technician, both domiciled in the Federal Republic of Germany (`the plaintiffs'), and Dean Witter Reynolds Inc., a firm of brokers based in New York (`the defendant').
3 According to the order for reference, the plaintiffs, not acting within the scope of their profession or occupation, commissioned the defendant with the implementation of commodity futures transactions, on a commission basis.
4 The plaintiffs provided large sums of money, which apart from a small residual amount were entirely consumed by losses as a result of speculations.
5 The defendant advertises in Germany via Dean Witter Reynolds GmbH, a German company based in Frankfurt. However, it is common ground between the parties that contacts between them were mediated exclusively by Metzler Wirtschafts- und Boersenberatungsgesellschaft mbH (`MWB'), a company based in Frankfurt which advises on economic and stock market affairs, and is independent of the defendant.
6 The plaintiffs claimed damages on the grounds of breach by the defendant of its contractual and precontractual obligations, tortious conduct characterized by unjustified charges in connection with a large number of partly unreasonable transactions (`churning'), and unjust enrichment.
7 The Landgericht (Regional Court), in which the plaintiffs brought proceedings, held that it had no jurisdiction in respect of the defendant. Its decisions were upheld on appeal. Mr Brenner and Mr Noller thereupon each appealed on a point of law to the Bundesgerichtshof.
8 The Bundesgerichtshof considers that, on the basis of the findings made by the judges of fact, only Articles 13 and 14 of the Brussels Convention might establish the international jurisdiction of the German courts.
9 Under Article 13 of the Brussels Convention:
`In proceedings concerning a contract concluded by a person for a purpose which can be regarded as being outside his trade or profession, hereinafter called "the consumer", jurisdiction shall be determined by this Section without prejudice to the provisions of Articles 4 and 5(5), if it is:
1. a contract for the sale of goods on instalment credit terms; or
2. a contract for a loan repayable by instalments, or for any other form of credit, made to finance the sale of goods; or
3. any other contract for the supply of goods or a contract for the supply of services, and
(a) in the State of the consumer's domicile the conclusion of the contract was preceded by a specific invitation addressed to him or by advertising; and
(b) the consumer took in that State the steps necessary for the conclusion of the contract.
Where a consumer enters into a contract with a party who is not domiciled in a Contracting State but has a branch, agency or other establishment in one of the Contracting States, that party shall, in disputes arising out of the operations of the branch, agency or establishment, be deemed to be domiciled in that State.
This Section shall not apply to contracts of transport.'
10 The first paragraph of Article 14 then states that:
`A consumer may bring proceedings against the other party to a contract either in the courts of the Contracting State in which that party is domiciled or in the courts of the Contracting State in which he is himself domiciled.'
11 The Bundesgerichtshof observes that in the present case the other party to the contract is not domiciled in a Contracting State and no branch, agency or other establishment within the meaning of the second paragraph of Article 13 of the Brussels Convention acted as an intermediary in the conclusion or performance of the contract. It wonders whether in those circumstances the consumer is precluded only from bringing proceedings against the other party to the contract in the courts of the State in which that party is domiciled, or whether the consumer is also precluded from bringing proceedings in the courts of the Contracting State in which he is himself domiciled. The Bundesgerichtshof considers that the first paragraph of Article 4 of the Brussels Convention might support the latter interpretation, since it makes the applicability of the Convention subject to the defendant being domiciled in a Contracting State.
12 In those circumstances the Bundesgerichtshof stayed the proceedings pending a preliminary ruling by the Court on the following questions:
`1 Is it a condition for the recognition of the international jurisdiction of the State in which the consumer is domiciled under the second alternative in the first paragraph of Article 14 of the Brussels Convention that the other party to the contract is domiciled in a Contracting State to the Brussels Convention or is deemed under the second paragraph of Article 13 of the Brussels Convention to be so domiciled?
2 Does subparagraph 3 of the first paragraph of Article 13 of the Brussels Convention cover contracts on a commission basis for the purpose of carrying out commodity futures transactions?
3 Is subparagraph 3(a) of the first paragraph of Article 13 of the Brussels Convention applicable whenever the party with whom the consumer enters into a contract has advertised in the State in which the consumer is domiciled prior to conclusion of the contract, or does that provision require there to be a connection between the advertisement and the conclusion of the contract?
4 (a) Does the term "proceedings concerning a contract" in the first paragraph of Article 13 of the Brussels Convention cover, in addition to the pursuit of claims for damages for breach of contractual obligations, also the pursuit of claims based on breach of precontractual obligations (culpa in contrahendo) and unjust enrichment in connection with reversal of contractual performance?
(b) In the case of proceedings in which damages are claimed for the breach of contractual and precontractual obligations, claims are put forward on the basis of unjust enrichment and damages are sought for tortious acts, does the first paragraph of Article 13 of the Brussels Convention create, by virtue of the factual connection, ancillary jurisdiction which extends also to the non-contractual claim?'
13 The Bundesgerichtshof notes that Questions 2, 3 and 4 are asked only in case the answer to Question 1 is that the first paragraph of Article 14 of the Convention is applicable in a case such as the present one.
14 It must be noted to begin with that Articles 13 and 14 form part of the section on `jurisdiction over consumer contracts'.
15 In addition, the first subparagraph of Article 13 expressly states that that section, as a whole, applies `without prejudice to the provisions of [Article] 4'.
16 According to the first paragraph of Article 4, `if the defendant is not domiciled in a Contracting State, the jurisdiction of the courts of each Contracting State shall, subject to the provisions of Article 16, be determined by the law of that State'. Article 16 lays down rules for exclusive jurisdiction in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the validity of the constitution, the nullity or the dissolution of companies or other legal persons, the validity of entries in public registers, the registration or validity of patents, trademarks, designs or other similar rights, and in proceedings concerned with the enforcement of judgments.
17 It follows that, subject to those cases of exclusive jurisdiction, the jurisdiction of courts in proceedings where the defendant is not domiciled in a Contracting State is governed not by the Brussels Convention but by the law of the Contracting State of the court in which proceedings are brought.
18 With respect to consumer contracts, the only exception to the rule in Article 4 is introduced by the second paragraph of Article 13, which applies where a consumer enters into a contract with a party who is not domiciled in a Contracting State but has a branch, agency or other establishment there and the dispute arises out of its operations.
19 It is sufficient to note that, according to the order for reference, no branch, agency or other establishment within the meaning of the second paragraph of Article 13 acted as an intermediary in the conclusion or performance of the contracts between Mr Brenner and Mr Noller and the defendant, and that that exception thus does not apply to the present case.
20 Accordingly, the answer to Question 1 must be that the courts of the State in which the consumer is domiciled have jurisdiction in proceedings under the second alternative in the first paragraph of Article 14 of the Brussels Convention if the other party to the contract is domiciled in a Contracting State or is deemed under the second paragraph of Article 13 of that Convention to be so domiciled.
21 In view of the answer to Question 1, there is no need to answer the other questions.
Costs
22 The costs incurred by the German Government and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds,
THE COURT
(Fifth Chamber),
in answer to the questions referred to it by the Bundesgerichtshof, by order of 25 May 1993, hereby rules:
The courts of the State in which the consumer is domiciled have jurisdiction in proceedings under the second alternative in the first paragraph of Article 14 of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as amended by the Convention of 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland, if the other party to the contract is domiciled in a Contracting State or is deemed under the second paragraph of Article 13 of that Convention to be so domiciled.
