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Zuid-Chemie B.V. v. PMF Productions

2009 March 19
by Hein Kernkamp

Court: Netherlands Supreme Court

Date: April 4th, 2008

LJN number: BC3305

Case: Zuid-Chemie, a Dutch company, initiated proceedings against PMF Productions, a Belgian company, before the court of Middelburg in the Netherlands. The EU Council Regulation on Jurisdiction, recognition and enforcement of judgments in civil and commercial matters ("Brussels I") lays down rules governing the jurisdiction of the courts in civil and commercial matters. The basic principle of Brussels I is that the courts with jurisdiction are those of the Member State in which the defendant is domiciled, a defendant may in certain circumstances be sued in the courts of another Member State. In this case Zuid-Chemie alleged that PMF Productions could be sued in the court of the Netherlands under Article 5(3) of Brussels I, that allows the claimant to bring matters relating to liability for wrongful acts (tort, delict or quasi-delict) before the courts for the place where the harmful event occurred or may occur. PMF Productions held up that only the courts of Belgium had jurisdiction in the matter and asked the Dutch court to dismiss the case due to lack of jurisdiction.

The underlying facts were the following. Zuid-Chemie, a producer of fertilizers, bought a micromix from HCI, which company in its turn asked PMF Productions to prepare the micromix in its factory in Essen, Belgium, wich it did. After delivery Ex works by PMF Productions, the micromix was transported to Sas van Gent in The Netherlands, where Zuid-Chemie used the micromix to prepare fertilizer. The end product was subsequently delivered to its customers. Later it turned out that the content of zinc sulfate in the micromix was too high, which resulted in claims from customers and damages for Zuid-Chemie.

In two instances the Dutch courts followed PMF Productions in its allegation that only the Belgian courts had jurisdiction in the matter and dismissed the claim. Subseqently the claim had been brought before the Netherlands Supreme Court. The European Court of Justice has already esablished that a claimant is free to bring a case before the 'Handlungsort' or the 'Erfolgsort'. In the proceedings at hand it had been established that Essen, Belgium, should be considered as the 'Handlungsort', as the place where the micromix had been prepared. In the view of Zuid-Chemie, its plant in Sas van Gent, The Netherlands should be regarded as the 'Erfolgsort', as the place where the micromix was used and where it caused the contamination of the end product. As this argument calls for an explanation of Brussels I, the Netherlands Supreme Court decided to refer the case to the European Court of Justice.

The questions referred to the European Court of Justice are the following:

(a) Which harm is, in the case of unlawful conduct such as that which forms the basis for Zuid-Chemie's claim, to be treated as the initial harm resulting from that conduct: the harm which arises by virtue of the delivery of the defective product or the harm which arises when normal use is made of the product for the purpose for which it was intended?

(b) If the latter is the case, can then the place where that harm arose be treated as 'the place where the harmful event occurred' within the meaning of Article 5(3) of Council Regulation (EC) No 44/2001 (1) of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters only if that harm consists of physical harm to persons or goods, or is this also possible if (initially) only financial harm has been incurred?

It will take considerable time before the European Court of Justice renders its decision. Meanwhile this topic is open for debate.

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