Reliance Globalcom Ltd v OTE International Solutions SA

For jurisdiction under Article 5(1)(b) of the Judgments Regulation, services must be provided pursuant to a direct contractual obligation. Activities which are merely incidental, preparatory or necessary to maintaining the supplier’s infrastructure do not qualify. A contract granting capacity-use rights in a communications network is not thereby a contract for services, particularly where the agreement identifies no services to be performed. Where services are assumed for the purpose of an alternative argument, the place of performance is not impermissibly uncertain merely because the contract permits a negotiated change of landing points and corresponding contractual terms.

The claimant sought payment of operation and maintenance charges under capacity right of use agreements relating to a fibre-optic cable system. The defendant, domiciled in Greece, challenged the jurisdiction of the English court under CPR Part 11.

The claimant relied on Article 5(1)(b) of the Judgments Regulation, contending that the agreements were contracts for the provision of services performed in England. The defendant relied on the general domicile rule in Article 2 and argued that the agreements concerned the sale of rights to use cable capacity, not services. The central issues were the contractual character of the agreements and, alternatively, whether the place of performance was sufficiently certain.

1. Application of the jurisdiction test. The claimant bore the burden of establishing jurisdiction to the standard of a good arguable case. Since the principal issue was a short point of contractual construction and no factual dispute required resolution, the court could determine it conclusively at the interlocutory stage. The result would have been the same even on the arguability standard.
2. Nature of the agreements. The CROU Agreements made capacity available for use. Their terms referred to the purchase of capacity, an exclusive right to use it, a substantial purchase price, warranties and limitations consistent with that structure, and standby operation and maintenance charges without imposing corresponding service obligations on the claimant. They did not create a direct contractual obligation to provide identified services.
3. Incidental and preparatory activities. Monitoring, network management, repairs and maintenance of landing-station equipment did not constitute services under Article 5(1)(b) because the agreements imposed no contractual obligation to perform those activities. Such matters were background or preparatory arrangements rather than services provided under the contract.
4. Alternative place of performance argument. Even assuming that services were contractually required, the possibility of changing landing points did not make the place of performance too uncertain for Article 5. An exercised option would involve negotiation and a changed contractual regime, so the parties could foresee the resulting jurisdiction at the relevant time.
5. The primary argument succeeded. The English court lacked jurisdiction under Article 5, and the defendant’s application under CPR Part 11 was therefore successful. The alternative argument failed.