CYPRUS: Interpretation of Article 7(2) of the recast EU Brussels Regulation 1215/2012
A recent decision of the District Court of Limassol has clarified the interpretation relating to Article 7(2) of the recast EU Regulation reaffirming the general principle that civil actions are to be brought against individuals and companies in the courts of the place where they are domiciled, except in specific instances where derogations from the general rule apply as stated under Article 7(1) and (2). What is of essence is that the claimant has to establish that the harmful event or series of events giving rise to the damage took place in the EU member state where proceedings have been instituted in order to reply on the derogation as per Article 7(2).
In this recent decision of the District Court, the issue of jurisdiction arose and the Court decided to dismiss the claimant’s case at an early stage after the adjudication of the application filed by the Defendant challenging the jurisdiction of the Court. In reaching its decision the court relied under Articles 7(1) and (2) of the EU Brussels Regulation 1215/2012. Without going into the facts of the case the Court noted the following:
(i) A party should be sued at the place of its domicile, a rule subject to exceptions as set out in Articles 7(1) and (2) which states the following: "A person domiciled in a Member State may be sued in another Member State: (1)(a) in matters relating to a contract, in the courts for the place of performance of the obligation in question; (b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be: —in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered, —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; (c) if point (b) does not apply then point (a) applies; (2) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur."
(ii)The court ultimately found that as per the facts of the case the United Kingdom was the appropriate place to initiate proceedings since firstly the transfer of funds from the claimant's bank account in Cyprus to an account maintained with the defendant in the United Kingdom did not entail the occurrence of a material fact in Cyprus, such as to give jurisdiction to the Cypriot courts. The fact that the bank account which was the issue at dispute was located in the United Kingdom, which was also the place where the defendant was established and provided its services, gave rise to jurisdiction to the United Kingdom. Therefore the United Kingdom was the appropriate place for the defendant to be sued.
Furthermore analyzing Article 7(2) as regards to where the harmful event arose it was decided that it was the United Kingdom since the negligence of the Defendant in treating the claimant's funds had taken place in the United Kingdom. In this respect, there was no difference between the place where the damage had occurred and the place where the events giving rise to the damage had taken place.
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