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THE LUGANO CONVENTION

THE LUGANO CONVENTION

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Published by LEX 47

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Published by: LEX 47 on Sep 05, 2009
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09/27/2010

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THE LUGANO CONVENTION
In 1988, the Member States of the European Union and some other States concluded theLugano Conventionon jurisdiction and the enforcement of judgments in civil andcommercial matters. At present, apart from the EU Member States, Switzerland, Norway,Iceland and Poland are contracting parties to that convention. The Lugano Conventionextended the rules determining jurisdiction between Member States that used to be laiddown in the 1968Brussels Conventionon jurisdiction and the enforcement of judgmentsin civil and commercial matters beyond the boundaries of the European Union. In March2002 the 1968 Brussels Convention was replaced byCouncil Regulation(EC) No44/2001 on jurisdiction and the recognition and enforcement of judgments in civil andcommercial matters. The Regulation modified some of the jurisdictional provisions. Thatis why the Lugano Convention will soon be changed to bring it fully in line with the rulesthat apply within the European Union.
What are the main principles of the Lugano Convention as regards jurisdiction?
In general the factor determining jurisdiction is the
 
domicile of the defendant
. Personsdomiciled in a Contracting State shall, whatever their nationality, be sued in the courts of that State. Nevertheless, the Convention contains a number of provisions that depart fromthis principle and allow court proceedings to be brought in another Contracting Stateother than where the defendant is domiciled. The most important examples of thesespecial rules are:
in
 
matters relating to a contractual obligation
a person can be sued in the
courts
 
for the place of performance of that obligation
. For example, the French vendor of a lorry can be sued in Norway if that is where the vehicle was to be delivered.in an
action for damages
the courts of the place where the harmful event occurredare competent. Thus, in the case of a traffic accident that happened in Switzerland between a tourist domiciled in the U.K. and a Swiss local, the Swiss plaintiff canuse the Swiss courts. Sometimes the place of the event giving rise to liability in tort(e.g. the emission of toxic substances into a river in Poland) and the place wherethat event results in damage (e.g. harm to plants irrigated with the water of the polluted river in Germany) are not located in the same Contracting State. In thatcase the plaintiff is free to choose the courts of either of those Contracting States.in
matters relating to maintenance
the maintenance creditor can turn to thecourts of the Contracting State in which he himself is domiciled.in some contractual relationships that are characterized by a marked imbalance of  power between the parties such as
matters relating to consumer contracts and toinsurance
the weaker party is deemed to be in need of special protection. As a
 
general rule, the weaker parties (the consumer, the insured) can only be sued in theContracting State where they are domiciled. The stronger parties (the dealer, theinsurer), on the other hand, can also be sued, sometimes subject to certainconditions, in the Contracting State where the weaker party is domiciled.The rules on special jurisdiction listed above constitute an additional option for the plaintiff who can also choose to sue the defendant in the courts of the Contracting State inwhich that person is domiciled. There are, however, also some cases of so-called
exclusive jurisdiction
that do not supplement but replace the jurisdiction based on thedefendant's domicile. For example,in matters relating to the ownership or tenancy of 
immovable property
only thecourts of the Contracting State where the property is situated have jurisdiction.in matters relating to rights that have to be registered such as
patents
or 
trademarks
the courts of the Contracting State in which the registration has taken place are exclusively competent.subject to some conditions the parties also have the possibility of freely choosingthe Contracting State whose courts are to have jurisdiction. Such a
choice of courtagreement
usually leads to the exclusive competence of the courts of the chosenContracting State unless the parties stipulate otherwise.Subject to certain exceptions, the mere fact that the defendant enters an
appearance incourt
leads to the jurisdiction of the courts of that Contracting State even if they are notordinarily competent.
Please note that the above description of the rules on jurisdiction in the Convention isneither exhaustive nor sufficiently thorough to allow a reliable assessment of the issue of  jurisdiction in a specific case.
What happens if proceedings concerning the same dispute are brought in twoContracting States?
It may happen that both parties to a dispute initiate court proceedings on the same matter in different Contracting States. For example, after a traffic accident between two personsliving in Iceland and Finland, respectively, it could be that they both sue one another for damages in the Contracting State of the other party's domicile. In that situation theRegulation basically establishes a “first come first served” rule. The second court usedhas to stay its proceedings and wait for the other court to decide on its jurisdiction. If thefirst court considers itself competent the other court has to dismiss the case. Only if thefirst court comes to the conclusion that it does not have jurisdiction can the other courtcontinue its proceedings.
How is international jurisdiction determined if a Member State of the EuropeanUnion and a non-Member State that is not a signatory of the Lugano Conventionare involved?

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