Place of jurisdiction and INCOTERMS

As the German Federal Supreme Court has clarified in 2013, INCOTERMS affect the place of jurisdiction see ruling dated 7 November 2012, VIII 108/12 – Source: Database of Decisions of the German Federal Supreme Court .

Pursuant to the application of this decision, the Higher Regional Court at Stuttgart, on 7 August 2017 (Ref. 5 U 188/16, reprinted in the Journal for Distribution Law 2018, 131), had decided that in case of an ex-works clause, the place of fulfilment is the premises of the seller and therefore, suit may be filed at this place of jurisdiction. What is interesting about the Stuttgart ruling is that in the actual case, the seller undertook, at the cost of the buyer, the entire organization of the transportation. Since however, the responsibility for the transportation had been unambiguously clarified, (the seller, had in addition pointed out in the order confirmation that as far as she was concerned, It was only an ex-works delivery that was involved. In addition, the contract contained the clause "pick up in Hechingen, at the cost of the customer, the Higher Regional Court in Stuttgart decided rightly, that the

organization of transport was (as is not infrequently the case in practice) an add-on service,

which does not change anything in the agreement concerning an obligation.

In the context of a contractual relationship, it is prudent to give due consideration to the

consequences of the use of #INCOTERMS also for lawsuits. It can come as an unpleasant

surprise if a suit must ultimately be filed abroad, or in a country in which it can later become

impossible to enforce the same, as a result of which, under certain circumstances, protracted

and costly exequatur proceedings become necessary. In such cases the place of jurisdiction

resulting from the use of INCOTERMS can be avoided by means of an additional contractual

agreement concerning a place of jurisdiction. In addition, due consideration must be given to an arbitration agreement. - For more detailed information on drafting of contracts involving international issues see our newsletter of 7 April, 2018.

Ass. iur. Thorsten Vogl Associate

#incoterms #supplychainlaw #internationallaw #legal #transportation