1 BY ORDER OF 15 MARCH 1979 , RECEIVED AT THE COURT REGISTRY ON 11 APRIL 1979 , THE BUNDESGERICHTSHOF ( FEDERAL COURT OF JUSTICE ) REFERRED TO THE COURT , UNDER ARTICLE 3 OF THE PROTOCOL OF 3 JUNE 1971 ON THE INTERPRETATION OF THE CONVENTION OF BRUSSELS OF 27 SEPTEMBER 1968 ( HEREINAFTER REFERRED TO AS ' ' THE CONVENTION ' ' ), A QUESTION CONCERNING THE INTERPRETATION OF ARTICLE 5 ( 1 ) AND 17 OF THE SAID CONVENTION .
THIS QUESTION HAS BEEN RAISED IN THE COURSE OF LITIGATION BETWEEN TWO MERCHANTS , ONE DOMICILED IN MUNICH , IN THE FEDERAL REPUBLIC OF GERMANY , AND THE OTHER IN MASCARI , IN ITALY , RELATING TO THE REPAYMENT BY THE DEFENDANT IN THE MAIN ACTION OF A LOAN SAID TO HAVE BEEN MADE TO HIM BY THE PLAINTIFF IN THE MAIN ACTION . THE LATTER , RELYING UPON AN ORAL AGREEMENT UNDER WHICH MUNICH IS SAID TO HAVE BEEN FIXED AS THE PLACE OF REPAYMENT , INSTITUTED PROCEEDINGS BEFORE THE LANDGERICHT MUNCHEN ( MUNICH REGIONAL COURT ) WHICH HELD THAT IT HAD NO JURISDICTION ON THE GROUNDS THAT , ON THE ONE HAND , A MERE ORAL AGREEMENT ON THE PLACE OF PERFORMANCE WAS NOT SUFFICIENT TO ESTABLISH INTERNATIONAL JURISDICTION AND , ON THE OTHER HAND , THAT THAT AGREEMENT COULD ONLY HAVE THE EFFECT OF CONFERRING JURISDICTION IF THE FORM PRESCRIBED BY ARTICLE 17 OF THE CONVENTION HAD BEEN OBSERVED . THAT DECISION WAS UPHELD BY THE OBERLANDESGERICHT MUNCHEN ( MUNICH HIGHER REGIONAL COURT ) AND THE PLAINTIFF IN THE MAIN ACTION APPEALED ON A POINT OF LAW TO THE BUNDESGERICHTSHOF WHICH POSED THE FOLLOWNING QUESTION :
' ' DOES AN INFORMAL AGREEMENT WHICH IS EFFECTIVE UNDER NATIONAL - IN THIS CASE GERMAN - LAW BETWEEN FULL-SCALE MERCHANTS ( VOLLKAUFLEUTE ) CONCERNING THE PLACE OF PERFORMANCE OF THE OBLIGATION WHICH IS AT ISSUE IN THE PROCEEDINGS SUFFICE TO FOUND JURISDICTION IN THAT PLACE UNDER ARTICLE 5 ( 1 ) OF THE CONVENTION , OR IS THE CAPACITY OF SUCH AN AGREEMENT TO FOUND JURISDICTION DEPENDENT UPON OBSERVANCE OF THE FORM LAID DOWN IN ARTICLE 17 OF THE CONVENTION?
' '
2 IT FOLLOWS FROM THE WORDING OF THIS QUESTION THAT THE NATIONAL COURT IS ASKING WHETHER AN AGREEMENT SUCH AS THAT DESCRIBED , IN ORDER TO FOUND JURISDICTION UNDER ARTICLE 5 ( 1 ) OF THE CONVENTION , IS DEPENDENT UPON OBSERVANCE OF THE FORM PRESCRIBED BY ARTICLE 17 OF THE CONVENTION , ACCORDING TO WHICH PROVISION THE COURT OF THE CONTRACTING STATE SPECIFIED BY THE PARTIES - OF WHOM AT LEAST ONE MUST HAVE HIS DOMICILE IN THE TERRITORY OF A CONTRACTING STATE - AS HAVING JURISDICTION TO SETTLE ANY DISPUTES WHICH HAVE ARISEN OR MAY ARISE IN CONNEXION WITH A PARTICULAR LEGAL RELATIONSHIP SHALL HAVE EXCLUSIVE JURISDICTION , PROVIDED THAT IT HAS BEEN SPECIFIED BY AN AGREEMENT IN WRITING OR AN ORAL AGREEMENT EVIDENCED IN WRITING .
3 IT IS APPROPRIATE TO POINT OUT THAT ARTICLE 5 ( 1 ), WHICH OCCURS IN SECTION 2 OF TITLE II OF THE CONVENTION INTITLED ' ' SPECIAL JURISDICTION ' ' , CREATES A GROUND OF JURISDICTION WHICH IS AN EXCEPTION TO THE GENERAL RULE OF JURISDICTION PROVIDED FOR IN ARTICLE 2 OF THE CONVENTION ; THE PROVISIONS OF ARTICLE 5 , WHICH PROVIDE THAT IN MATTERS RELATING TO A CONTRACT A DEFENDANT DOMICILED IN A CONTRACTING STATE MAY BE SUED IN THE COURTS FOR THE PLACE OF PERFORMANCE OF THE OBLIGATION IN QUESTION , INTRODUCE A CRITERION FOR JURISDICTION , THE SELECTION OF WHICH IS AT THE OPTION OF THE PLAINTIFF AND WHICH IS JUSTIFIED BY THE EXISTENCE OF A DIRECT LINK BETWEEN THE DISPUTE AND THE COURT CALLED UPON TO TAKE COGNIZANCE OF IT .
4 BY CONTRAST , ARTICLE 17 , WHICH OCCURS IN SECTION 6 OF THE CONVENTION INTITLED ' ' PROROGATION OF JURISDICTION ' ' AND WHICH PROVIDES FOR THE EXCLUSIVE JURISDICTION OF THE COURT DESIGNATED BY THE PARTIES IN ACCORDANCE WITH THE PRESCRIBED FORM , PUTS ASIDE BOTH THE RULE OF GENERAL JURISDICTION - PROVIDED FOR IN ARTICLE 2 - AND THE RULES OF SPECIAL JURISDICTION - PROVIDED FOR IN ARTICLE 5 - AND DISPENSES WITH ANY OBJECTIVE CONNEXION BETWEEN THE LEGAL RELATIONSHIP IN DISPUTE AND THE COURT DESIGNATED . IT THUS APPEARS THAT THE JURISDICTION OF THE COURT FOR THE PLACE OF PERFORMANCE ( PROVIDED FOR IN ARTICLE 5 ( 1 )) AND THAT OF THE SELECTED COURT ( PROVIDED FOR IN ARTICLE 17 ) ARE TWO DISTINCT CONCEPTS AND ONLY AGREEMENTS SELECTING A COURT ARE SUBJECT TO THE REQUIREMENTS OF FORM PRESCRIBED BY ARTICLE 17 OF THE CONVENTION .
5 CONSEQUENTLY , IF THE PARTIES TO THE CONTRACT ARE PERMITTED BY THE LAW APPLICABLE TO THE CONTRACT , SUBJECT TO ANY CONDITIONS IMPOSED BY THAT LAW , TO SPECIFY THE PLACE OF PERFORMANCE OF AN OBLIGATION WITHOUT SATISFYING ANY SPECIAL CONDITION OF FORM , AN AGREEMENT ON THE PLACE OF PERFORMANCE OF THE OBLIGATION IS SUFFICIENT TO FOUND JURISDICTION IN THAT PLACE WITHIN THE MEANING OF ARTICLE 5 ( 1 ) OF THE CONVENTION .
6 THE ANSWER TO THE QUESTION PUT BY THE BUNDESGERICHTSHOF MUST THEREFORE BE THAT IF THE PLACE OF PERFORMANCE OF A CONTRACTUAL OBLIGATION HAS BEEN SPECIFIED BY THE PARTIES IN A CLAUSE WHICH IS VALID ACCORDING TO THE NATIONAL LAW APPLICABLE TO THE CONTRACT , THE COURT FOR THAT PLACE HAS JURISDICTION TO TAKE COGNIZANCE OF DISPUTES RELATING TO THAT OBLIGATION UNDER ARTICLE 5 ( 1 ) OF THE CONVENTION OF BRUSSELS OF 27 SEPTEMBER 1968 , IRRESPECTIVE OF WHETHER THE FORMAL CONDITIONS PROVIDED FOR UNDER ARTICLE 17 HAVE BEEN OBSERVED .
COSTS
7 THE COSTS INCURRED BY THE GOVERNMENT OF THE UNITED KINGDOM AND THE COMMISSION OF THE EUROPEAN COMMUNITIES WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT ARE NOT RECOVERABLE .
8 AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF 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 ,
IN ANSWER TO THE QUESTION REFERRED TO IT BY THE BUNDESGERICHTSHOF BY ORDER OF 15 MARCH 1979 , HEREBY RULES :
IF THE PLACE OF PERFORMANCE OF A CONTRACTUAL OBLIGATION HAS BEEN SPECIFIED BY THE PARTIES IN A CLAUSE WHICH IS VALID ACCORDING TO THE NATIONAL LAW APPLICABLE TO THE CONTRACT , THE COURT FOR THAT PLACE HAS JURISDICTION TO TAKE COGNIZANCE OF DISPUTES RELATING TO THAT OBLIGATION UNDER ARTICLE 5 ( 1 ) OF THE CONVENTION OF BRUSSELS OF 27 SEPTEMBER 1968 , IRRESPECTIVE OF WHETHER THE FORMAL CONDITIONS PROVIDED FOR UNDER ARTICLE 17 HAVE BEEN OBSERVED .
