Contracts

In which country a foreign entrepreneur can sue his Polish contractor?

The Brussels I bis Ordinance addresses issues related to the choice of competent court between EU contractors. General jurisdiction has been granted to the courts of the State in which the defendant is domiciled in the EU and, in the case of legal persons, in which legal person has its registered office. In certain types of cases, there is a choice between general jurisdiction and additional jurisdiction. In the event of disputes arising from the contract, the plaintiff may choose between the court of the State in which the contractor’s registered office is located and the court of the State where the contract was to be performed. The place of performance of the contract is:

• in the case of a sales contract – the place where the purchased goods were or was to be delivered,

• in the case of a contract for the provision of services – a place where the agreed service was or was supposed to be provided.

Before determining the jurisdiction of the court under special jurisdiction, it is therefore appropriate to correctly classify the contract as a sales or service contract. In the case of complex or unusual contracts, the verdicts of Court of Justice of the European Union and national case-law may help. The contract for the provision of services may, for example, be a contract for construction works when materials have been provided by the buyer. It should also be verified whether the claims directed against the contractor are not tortious. In this case, the special property designates the place where the event causing the damage occurred or may occur. For the claim against tort, it may be considered, for example, asserting claims against members of the management board owned by the company’s creditors on the basis of art. 299 of Commercial Companies Code.

The prorogation clause

Irrespective of the general rules for determining jurisdiction, the parties may agree that disputes arising out of their contract shall be resolved in a court of a particular country, including the so-called prorogation agreement. It is a common practice to include jurisdiction clauses not in the actual content of the contract between the parties, but also in the general terms of the contract or in the confirmation of the order. In this way, an inattentive contractor may not notice that he / she has become bound by the prorogation clause terminating the court competent for the disputes arising from the contract in a favorable manner than it results from the general provisions. For the prorogation clause to be effective, it must be agreed by the parties. On the basis of the Brussels I bis Ordinance, the examination whether the parties have actually agreed upon the jurisdiction of the courts of a given State, is dealt with by the national court referred to by the party. According to art. 25 of the Brussels I bis Ordinance establishing the prorogation clause will be valid not only by explicitly placing it in the content of the contract, but, for example, invoking in the contract the general terms of delivery of one of the contractors containing the relevant provisions. It will also be important to conclude a clause in a manner appropriate to the commercial practice which the parties knew or should know.

It should be remembered that the conclusion of the prorogation clause will not automatically result in the inability to conduct a dispute against the contractor before the court which’s jurisdiction was established on the basis of general rules. The other party to the dispute may, however, raise the plea of ​​lack of jurisdiction. If he does so before getting into a dispute, the plaintiff may expect the claim to be rejected. Such a situation is particularly dangerous when the lawsuit is filed shortly before the expiry of the period of limitation of claims.

Before submitting an action against a Polish entrepreneur, it is worth checking whether the parties have effectively concluded a prorogation agreement that changes the general rules of jurisdiction in this given case.

Author team leader DKP Legal anna szymielewicz
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