Report for the Hearing delivered in Case C-115/88

I — Facts, procedure and legal background to the dispute

A — Facts

1. Course of the procedure in the main proceedings

Hans-Heinz Reichert and Ingeborg Kockler, his wife, who are of German nationality and reside at Schwalbach, Federal Republic of Germany, own immovable property at Domaine de Montjoyeux, Antibes, Alpes-Maritimes, France. They decided to donate the legal ownership of the property in question to their son, Mario Peter Antonio Reichert, also of German nationality and also residing at Schwalbach in the Federal Republic of Germany. The donation was made by a notarial instrument executed at Creutzwald, Moselle, France.

Dresdner Bank AG, whose registered office is at Frankfurt am Main, Federal Republic of Germany, challenged that donation before the tribunal de grande instance (Regional Court), Grasse, Alpes-Maritimes, France, within whose judicial district the immovable property in question is situated, by bringing an ‘action paulienne (actio pauliana, a revocatory action brought by a creditor whereby transactions entered into by his debtor in fraud of the creditor's rights may be declared ineffective as against the creditor in so far only as his interests are prejudiced) under Article 1167 of the French civil code.

In bringing its action before the tribunal de grande instance, Grasse, Dresdner Bank relied on Article 16(1) of the Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters, which provides that ’in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the courts of the Contracting State in which the property is situated are to have exclusive jurisdiction.

By a judgment of 20 February 1987, the tribunal de grande instance, Grasse, held that it had jurisdiction on the basis of that provision. The defendants, however, appealed against that decision to the cour d'appel (Court of Appeal), Aix-en-Provence, which has sought a preliminary ruling by the Court on the interpretation of Article 16(1).

2. The dispute before the cour d'appel, Aix-en-Provence

The Reicherts maintain before the cour d'appel, as they had previously maintained before the tribunal de grande instance, that Article 16(1) of the Convention of 27 September 1968 does not apply to the action brought against them by Dresdner Bank since it does not have as its object ‘rights in rem in immovable property’; it is, by very nature, a personal action. In the alternative, if it is accepted that the question of jurisdiction could be solved by applying Article 5(3) of the Convention, which provides that in matters relating to tort, delict or quasi-delict, a defendant may be sued ‘in the courts for the place where the harmful event occurred’, the Reicherts maintain that the courts for Metz, in whose judicial district the notarial deed was executed, should be held to have jurisdiction.

Dresdner Bank, for its part, reaffirms its original interpretation of Article 16(1) of the Convention and, with regard to Article 5(3), replies that if the criterion in that provision were accepted, the Grasse court would still have jurisdiction since the harmful event — that is to say the transfer of the immovable property out of the estate of Mr and Mrs Reichert — occurred within its judicial district.

B — Legal background to the dispute

Article 2 of the Brussels Convention provides: ‘Subject to the provisions of this Convention, persons domiciled in a Contracting State shall, whatever their nationality, be sued in the courts of that State’. Title II, Section V, however, lays down a number of cases of exclusive jurisdiction which may depart from that rule. In particular, Article 16(1) provides that ‘in proceedings which have as their object rights in rem in immovable property, the courts of the Contracting State in which the property is situated’ are to have exclusive jurisdiction, regardless of domicile. Article 5(3) of the Convention, also cited by both the defendants and the plaintiff in the main action, provides: ‘A person domiciled in a Contracting State may, in another Contracting State, be sued ... 3. in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred ... ’.

Those are the circumstances in which the cour d'appel, Aix-en-Provence, has sought a ruling from the Court on whether

‘by providing that the courts of the Contracting State in which the property is situated are to have exclusive jurisdiction in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, it was the intention of the Brussels Convention to lay down a rule of jurisdiction without any reference whatever to the classification of actions as personal, real or mixed actions, taking account only of the substantive legal issue, namely the nature of the rights concerned, and whether the rule of jurisdiction thus laid down entitles a creditor who contests transactions entered into by his debtor in fraud of his rights — in this case a donation of rights in rem in immovable property — to bring his action before the courts of the Contracting State in which the property is situated’.

The judgment of the cour d'appel, Aix-en-Provence, was received at the Court Registry on 11 April 1988.

In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted by the French Government, represented by Régis de Gouttes, assisted by Géraud de Bergues, acting as Agents; by the German Government, represented by Christof Böhmer, acting as Agent; by the United Kingdom, represented by J. A. Gensmantel, of the Treasury Solicitor's Department, assisted by M. C. L. Carpenter, of the Lord Chancellor's Department, acting as Agents; by the Italian Government, represented by Oscar Fiumara, avvocato dello Stato, acting as Agent; and by the Commission of the European Communities, represented by Georgios Kremlis, a member of its Legal Department, assisted by Giorgio Cherubini, an Italian official on detachment with the Commission under the arrangements for exchanges with national officials, acting as Agents.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.

Pursuant to Article 95(1) and (2) of the Rules of Procedure, the Court, by decision of 8 May 1989, assigned the case to the Fifth Chamber.

II — Summary of the observations submitted to the Court

A —. It must first be noted that the Government of the French Republic suggests that the national court's question should be reformulated in two parts, as follows : The various observations submitted are also based on that approach. The French Government and the German Government consider that the concept of matters relating to rights in rem in immovable property, in Article 16(1) of the Brussels Convention of 27 September 1968 should be given an independent interpretation. The French Government asserts that the Court of Justice has already taken that course in its judgment of 15 January 1985 in Case 241/83 Rosier v Rottwinkel [1985] ECR 99, with regard to the concept of tenancies of immovable property used in the same provision. An independent interpretation is all the more necessary inasmuch as the concept of rights in rem is not defined in the same way in the various Member States. The German Government is also in favour of an independent interpretation of the concept; the Court has often adopted an independent interpretation of the substantive concepts of the Convention and that approach is all the more necessary with regard to adjective law. The Commission states that it would be helpful to be able to lay down an independent definition of the concept of the action paulienne itself. It is, however, very difficult to arrive at such a definition since the concept is not common to all the Contracting States and there is controversy, even within France, as to its nature. It is therefore necessary to consider whether, when such an action, as defined in French law, concerns immovable property, it has as its object rights in rem in immovable property within the meaning of Article 16(1).

‘(1) Is the concept of matters relating to rights in rem in immovable property in Article 16(1) of the Brussels Convention of 27 September 1968 to be interpreted in accordance with the laws of the Contracting States or with the principles and aims of the Convention?

2) Does the concept of proceedings which have as their object rights in rem in immovable property within the meaning of Article 16(1) of the abovementioned convention cover an action paulienne brought by a creditor against a donation of immovable property by his debtors?’

B —. The Commission and all the governments which have submitted observations consider that the action brought by Dresdner Bank against the Reicherts does not have as its object rights in rem in immovable property within the meaning of Article 16(1). The reasons put forward may be classed in three categories. (a) First, it is submitted that the action paulienne does not fall within the scope of Article 16(1) of the Convention because, although it seeks the revocation of a disposition of immovable property, it does not possess the characteristics of a real action. That view is taken by the French, Italian, German and United Kingdom Governments and by the Commission. The French Government considers that a definition of the concept of rights in rem in immovable property must take as its starting-point that of the concept of immovable property itself. They are rights which confer direct powers over immovable property, such as those of use and alienation. But an action paulienne does not confer on the creditor any direct right over the immovable property — it seeks merely a declaration that a transaction entered into in fraud of his rights may not be relied upon as against him. The fact that the action concerns a transfer of rights in rem in immovable property is irrelevant as a criterion for determining jurisdiction. In the Italian Government's view, ‘the proceedings must be capable of being regarded as relating truly and strictly to rights in rem over immovable property’ if exclusive jurisdiction is to be conferred under Article 16(1). The United Kingdom, for its part, points out that an action paulienne can equally well be brought in relation to rights other than rights in rem in immovable property. The fact that the property concerned in the transaction in issue was immovable property forms merely a surrounding circumstance; the issue is, above all, the right of a creditor not to be defrauded. The German Government also considers that, for Article 16(1) to apply, it is not enough that the action should concern a right in rem in immovable property; that right must constitute the very basis of the action. Those views are shared by the Commission. (b) The Italian, German and United Kingdom Governments and the Commission point out that the ratio legis of Article 16(1) is absent in the case of the action paulienne. They refer to the report of the committee of experts which drew up the Convention (the Jenard Report, Official Journal C 59, 5.3.1979, p. 1) and to that of the working party which prepared the draft Convention on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom (the Schlosser Report, Official Journal C 59, 5.3.1979, p. 71) and state that the reason for the rule laid down in Article 16(1) was to serve the proper administration of justice, inasmuch as disputes concerning rights in rem in immovable property often entail checks, enquiries and expert examinations which have to be made on the spot. Moreover, the matter is often governed by customary practices which are not generally known except in the courts of the place where the immovable property is situated, and the law applicable to immovable property is always the lex rei sitae. They also point out, as does the Schlosser Report, cited above, that some actions, such as those seeking the annulment, avoidance or rescission of a contract relating to a right in rem in immovable property, do not necessarily fall under Article 16(1). Those considerations do not support the view that the action paulienne falls within the criteria for exclusive jurisdiction under the provision in question, since the action paulienne is a personal action whose structure is common to most of the legal systems concerned. (c) The United Kingdom and the German Government stress the need to give a strict interpretation to Article 16(1) both because it forms an exception to the general principle of Article 2, that persons should normally be sued in the courts of the State in which they are domiciled, and because it establishes exclusive jurisdiction. The United Kingdom claims that the Court in fact took that approach both in its judgment of 14 December 1977 in Case 73/77 Sanders v Van der Putte [1977] ECR 2383 and in that of 15 January 1985 in Rösier v Rottwinkel, cited above. The Government of the Federal Republic of Germany considers that too broad an interpretation of Article 16(1) might be contrary to the interests of defendants.

C —. The Commission puts forward a number of arguments concerning the possible application of Article 5(3) of the Convention, which provides that a defendant may also be sued ‘in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred’. It states that the element of fraud is common to the various legal systems which possess the action paulienne. It considers, therefore, that it might be possible to found jurisdiction on Article 5(3), subject to the dual requirement of an intention to harm and a prejudice suffered. It would thus be possible, in the Commission's view, to envisage an independent interpretation of the Convention in which the action paulienne fell within the category of matters relating to tort, delict or quasi-delict. The Commission also wonders whether it might not be possible to found jurisdiction on Article 24 of the Convention, which concerns protective measures, since some authors consider that the action paulienne falls within the category of protective measures.

F. Grévisse

Judge-Rapporteur

1 Language of the case: French.