Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
1 Preliminary rulings - Jurisdiction of the Court - Limits - Manifestly irrelevant question
(EC Treaty, Art. 177)
2 Freedom of movement for persons - Freedom of establishment - Self-employed commercial agents - Directive 86/653 - Remuneration - Transactions concluded with customers belonging to a geographical area entrusted to an agent - Agent's entitlement to commission irrespective of his involvement in the transactions concerned
(Council Directive 86/653, Art. 7(2))
3 Freedom of movement for persons - Freedom of establishment - Self-employed commercial agents - Directive 86/653 - Remuneration - Customer belonging to a geographical area entrusted to an agent - Criteria connecting legal persons to a geographical area
(Council Directive 86/653, Art. 7(2))
Summary
4 Under the procedure for referring questions to the Court for a preliminary ruling pursuant to Article 177 of the Treaty, it is for the national courts alone, before which the proceedings are pending and which must assume responsibility for the judgment to be given, to determine, having regard to the particular features of each case, both the need for a preliminary ruling to enable them to give judgment and the relevance of the questions which they refer to the Court. A request for a preliminary ruling from a national court may be rejected only if it is quite obvious that the interpretation of Community law sought by that court bears no relation to the actual nature of the case or the subject-matter of the main action.
5 The first indent of Article 7(2) of Directive 86/653 on the coordination of the laws of the Member States relating to self-employed commercial agents must be interpreted as meaning that, where a commercial agent is responsible for a geographical area, he is entitled to commission on transactions concluded with customers belonging to that area, even if they were concluded without any action on his part.
That interpretation is required both by the wording of the provision in question, in which, in the case to which it refers, namely transactions entered into with a customer belonging to a geographical area or group of customers entrusted to him, no mention is made of the need for any particular activity on the part of the agent as a condition of entitlement to payment of a commission, and by the arrangement and logic of Article 7, which seeks to make provision for two alternative cases of entitlement to commission under Article 7(1) and (2), the first where the transaction was concluded as a result of the agent's activity, the second where the transaction was concluded with a customer belonging to an area or group entrusted to the agent.
6 Article 7(2) of Directive 86/653 on the coordination of the laws of the Member States relating to self-employed commercial agents, which provides that, where a commercial agent is entrusted with a specific geographical area, he is to be entitled to commission on commercial transactions concluded with a `customer belonging to that area', must, in the light of the context and aim of the Directive, be interpreted to the effect that where the customer is a legal person, it is the place of the latter's actual commercial activities which is relevant for the purpose of determining whether or not it belongs to the area entrusted to the agent. Where a company carries on its commercial activity in various places, or where the agent operates in several areas, other factors may be taken into account to determine the centre of gravity of the transaction effected, in particular the place where negotiations with the agent took place or should, in the normal course of events, have taken place, the place where the goods were delivered and the place where the establishment which placed the order is located, the essential criterion being to avoid a single transaction from being regarded as attaching to the geographical areas of two or more agents.
Parties
In Case C-104/95,
REFERENCE to the Court under Article 177 of the EC Treaty by the Polimeles Protodikio, Athens, for a preliminary ruling in the proceedings pending before that court between
Georgios Kontogeorgas
and
Kartonpak AE
on the interpretation of Article 7(2) of Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents (OJ 1986 L 382, p. 17),
THE COURT
(Fifth Chamber),
composed of: D.A.O. Edward, acting for the President of the Chamber, C. Gulmann, J.-P. Puissochet, P. Jann (Rapporteur) and M. Wathelet, Judges,
Advocate General: G. Cosmas,
Registrar: H.A. Ruehl, Principal Administrator,
after considering the written observations submitted on behalf of:
- Kartonpak AE, by Ionnis Dryllerakis, of the Athens Bar,
- the Greek Government, by Fokion P. Georgakopoulos, Assistant Legal Adviser in the State Legal Service, acting as Agent,
- the German Government, by Alfred Dittrich, Regierungsdirektor at the Federal Ministry of Justice, and Bernd Kloke, Oberregierungsrat at the Federal Ministry of Economic Affairs, acting as Agents,
- the French Government, by Catherine de Salins, Deputy Director of the Legal Affairs Directorate at the Ministry of Foreign Affairs, and Philippe Martinet, Foreign Affairs Secretary in the same Directorate, acting as Agents,
- the Commission of the European Communities, by Dimitrios Gouloussis, Legal Adviser, acting as Agent,
having regard to the Report for the Hearing,
after hearing the oral observations of Kartonpak AE, represented by Ionnis Dryllerakis, the Greek Government, represented by Fokion P. Georgakopoulos, and the Commission, represented by Dimitrios Gouloussis, at the hearing on 20 June 1996,
after hearing the Opinion of the Advocate General at the sitting on 4 July 1996,
gives the following
Judgment
Grounds
1 By judgment of 30 November 1994, received at the Court on 31 March 1995, the Polimeles Protodikio, Athens, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty two questions concerning the interpretation of Article 7(2) of Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents (OJ 1986 L 382, p. 17, hereinafter `the Directive'), in particular Article 7(2) thereof.
2 The questions were raised in proceedings between Mr Kontogeorgas, a self-employed commercial agent, and Kartonpak AE.
3 The file on the case shows that, by a contract concluded on 10 February 1981 between the two parties, as from 1 January 1981 Mr Kontogeorgas was to be responsible for marketing Kartonpak's products in the Departments of Achaia and Ilia. In return he was entitled to commission of 3% on net sales made there, subject to stamp duty, VAT and transport costs.
4 In 1985 Kartonpak was merged with Saint Ritsis Ellas AVEE (hereinafter `Saint Ritsis').
5 From 1988, according to Mr Kontogeorgas, Kartonpak sold its products itself to undertakings in Achaia and Ilia without paying him commission on those transactions. Kartonpak contends that those undertakings were formerly customers of Saint Ritsis, so that Mr Kontogeorgas was not entitled to commission.
6 The contract was subsequently terminated and Mr Kontogeorgas brought an action before the national court, seeking, principally, payment of DR 2 286 770, representing the commission on sales made since 1988 in the geographical area for which he was responsible. Kartonpak disputes that claim, on the ground that the customer undertakings did not have their seat in Mr Kontogeorgas's area of activity, but merely some factories.
7 Mr Kontogeorgas considers that he is entitled to that commission on the basis of Article 6(1) of Greek Presidential Decree No 219/91 on commercial agents, implementing Directive 86/653/EEC of the Council of the European Communities (FEK (Official Gazette of the Hellenic Republic) A 81 of 30 May 1991), which provides:
`A commercial agent shall be entitled to commission on commercial transactions concluded during the period covered by the agency contract where he is entrusted with a specific geographical area and the transaction was entered into with a customer belonging to that area.'
8 That provision transposed into Greek Law Article 7(2) of the Directive. Article 7 provides:
`1. A commercial agent shall be entitled to commission on commercial transactions concluded during the period covered by the agency contract:
(a) where the transaction has been concluded as a result of his action; or
(b) where the transaction is concluded with a third party whom he has previously acquired as a customer for transactions of the same kind.
2. A commercial agent shall also be entitled to commission on transactions concluded during the period covered by the agency contract:
- either where he is entrusted with a specific geographical area or group of customers,
- or where he has an exclusive right to a specific geographical area or group of customers,
and where the transaction has been entered into with a customer belonging to that area or group.
Member States shall include in their legislation one of the possibilities referred to in the above two indents.'
9 The national court considered Mr Kontogeorgas's action to be well founded, but expressed doubts regarding the interpretation of Article 7(2) of the Directive and Article 6(1) of the Greek Decree applying it, which reproduces the terms of the Directive and selects the first branch of the alternative offered by Article 7(2) of the Directive. The Polimeles Protodikio, Athens, consequently referred to the Court the following questions:
`1. Where a commercial agent is responsible for a specific geographical area, is he entitled to commission on transactions entered into without his involvement at any stage and irrespective of whether he himself had found the customers in question, or is he so entitled only on transactions concluded in his area of activity as a result of his intervention and with customers which he himself has found; and
2. What is the meaning to be attached to the term "customer belonging" to that area? In particular, where the customer is a company whose seat is located in a different place from that in which its business and trading activities are carried on, does the word "belonging" refer to the company's seat or to the place in which its commercial activity is actually carried on and/or its plant or other establishments are located, where the transaction in respect of which commission is sought was to supply that plant or those establishments and the relevant transaction in respect of which the agent is entitled to commission was entered into in that place within the agent's geographical area of activity?'
Admissibility of the questions referred to the Court
10 Kartonpak contends, first of all, that the reference for a preliminary ruling bears no relation to the case before the national court and its legal basis, so that it is inadmissible. At the hearing it stated that the questions were hypothetical, Mr Kontogeorgas's action being unfounded since the customers to whom he referred were formerly customers of Saint Ritsis, with which Mr Kontogeorgas had no contractual relationship. If the questions referred for a preliminary ruling were, nevertheless, held to be admissible, the first question should, it contended, be reformulated so as to clarify whether an agent was also entitled to commission for transactions concluded with customers of a third-party company which had taken over the company with which the agent had concluded the agency contract.
11 On that point, it is sufficient to point out that the Court has consistently held that it is for the national courts alone, before which the proceedings are pending and which must assume responsibility for the judgment to be given, to determine, having regard to the particular features of each case, both the need for a preliminary ruling to enable them to give judgment and the relevance of the questions which they refer to the Court. A request for a preliminary ruling from a national court may be rejected only if it is quite obvious that the interpretation of Community law sought by that court bears no relation to the actual nature of the case or the subject-matter of the main action (see, in particular, Case C-129/94 Ruiz Bernáldez [1996] ECR I-1829, paragraph 7).
12 That is not, however, the case here. The national court has indicated clearly that the outcome of Mr Kontogeorgas's action depends on the interpretation of Article 7(2) of the Directive, in the circumstances described in the first question, such interpretation being also required in respect of the national provision which transposed the Directive.
13 Accordingly the questions raised by the national court must be examined without however enlarging their scope.
Question 1
14 By this question the national court asks, essentially, whether the first indent of Article 7(2) must be interpreted as meaning that, where a commercial agent is responsible for a geographical area, he is entitled to commission on transactions concluded with customers belonging to that area, even if they were concluded without any action on his part.
15 The Commission, together with the Greek, German and French Governments, would answer that question in the affirmative, relying on both the wording and the structure of Article 7 of the Directive. That provision provides for alternative possibilities, corresponding to different situations, the second of which specifically does not require the agent's personal intervention. That interpretation is also confirmed by the use of the adverb `also' in Article 7(2) of the Directive.
16 Those arguments must be accepted. It is clear from the wording of Article 7 of the Directive that provision is made for two alternative cases of entitlement to commission. Article 7(1) refers to the agent's ongoing or previous activities, whereas Article 7(2) provides that a commercial agent is to be remunerated for all transactions entered into with customers belonging to a certain area or group, no mention being made of the need for any particular activity on the part of the agent. The distinction between the two situations is further confirmed by the fact that Article 7(2) of the Directive expressly employs the word `also'. That paragraph cannot, therefore, be interpreted to the effect that activity on the part of the agent is also required. Such an interpretation would, moreover, result in Article 7(2) of the Directive being rendered otiose since, where the commercial agent has found the customer in question, Article 7(1) applies.
17 Kartonpak considers, however, that Article 7 of the Directive must be read in conjunction with Article 6, which leaves it to the parties to the contract to specify what remuneration the commercial agent will receive. Since exclusivity is not mandatory in law, it would be incomprehensible if the agent were entitled to commission for all sales made in his area.
18 It should be noted, on this point, that Article 6 of the Directive concerns an agent's rate of remuneration and not, in contradistinction to Article 7, transactions on which commission is payable. The matters covered by those two provisions are consequently not the same.
19 The reply to the first question must therefore be that the first indent of Article 7(2) of the Directive must be interpreted as meaning that, where a commercial agent is responsible for a geographical area, he is entitled to commission on transactions concluded with customers belonging to that area, even if they were concluded without any action on his part.
Question 2
20 By this question the national court asks, essentially, whether the term `customer belonging to that area' in Article 7(2) of the Directive refers to the case where the customer is a legal person whose seat is located in a different place from that in which its business and trading activities are carried on.
21 According to the Commission, in the absence of any agreement between the parties to the contrary, the place where the commercial activity is actually carried on is decisive. In addition, the place where the legal person which is the other party to the transaction has its plant could be taken into consideration.
22 The Greek Government suggests a case-by-case definition, by reference to the particular circumstances, and mentions as criteria for determining the question the place where the business activities are carried on, the place where the plant is located, the place where the contract was concluded and the usages normally governing such transactions.
23 According to the German Government, customers having their seat or place of business in the area in question should be taken into account. Where they are situated in different places, the place where their commercial activities are carried on should be decisive. In a case where a customer undertaking has several branches, or where a customer manages several undertakings, the branch or undertaking that placed the order should be taken into account and not the one that took delivery.
24 Kartonpak considers that it is essentially the contractual terms agreed between the parties that must be taken as a basis. Moreover, it states that the place central to the decision to conclude the contract and where all the necessary documents are executed plays a decisive role in this connection.
25 It should first be noted, with respect to this question, that Article 7(2) of the Directive does not indicate the criteria which must be taken into consideration where the customer is a legal person whose seat is not situated in the place where its business is run and its commercial activity carried on. That provision must therefore be interpreted in the light of its context and the aim of the Directive (see Case 327/82 Ekro [1984] ECR 107, paragraph 11, and Case C-7/90 Vandevenne and Others [1991] ECR I-4371, paragraph 6).
26 It is common ground that the Directive is based on the consideration that the task of an agent is to find customers, negotiate with them, and if possible conclude commercial transactions with them (see Articles 1(2) and 3(2)(a) of the Directive). The Directive therefore emphasizes the actual commercial relationships between the agent and his customers such as they appear in a real economic context, not in hypothetical cases.
27 It follows that the meaning of the term `customer belonging to that area' which appears in Article 7(2) of the Directive is determined, where the customer is a legal person, by the place of the latter's actual commercial activities.
28 It must be recognized that the principal may have several agents operating on the territory of a single Member State, each with his own geographical area. It is therefore important to specify the place of the customer's commercial activities according to a criterion which makes it possible to preclude a single transaction from being regarded as attaching to the geographical areas of two or more agents.
29 Where a company carries on its commercial activity in various places, or where the agent operates in several areas, other factors may be taken into account to determine the centre of gravity of the transaction effected, in particular the place where negotiations with the agent took place or should, in the normal course of events, have taken place, the place where the goods were delivered and the place where the establishment which placed the order is located.
30 The reply to the second question must therefore be that Article 7(2) of the Directive must be interpreted to the effect that the meaning of the term `customer belonging to that area' must be determined, where the customer is a legal person, by the place where the latter actually carries on its commercial activities. Where a company carries on its commercial activity in various places, or where the agent operates in several areas, other factors may be taken into account to determine the centre of gravity of the transaction effected, in particular the place where negotiations with the agent took place or should, in the normal course of events, have taken place, the place where the goods were delivered and the place where the establishment which placed the order is located.
Decision on costs
Costs
31 The costs incurred by the Greek, German and French Governments and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.
Operative part
On those grounds,
THE COURT
(Fifth Chamber),
in answer to the questions referred to it by the Polimeles Protodikio, Athens, by judgment of 30 November 1994, hereby rules:
1. The first indent of Article 7(2) of Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents must be interpreted as meaning that, where a commercial agent is responsible for a geographical area, he is entitled to commission on transactions concluded with customers belonging to that area, even if they were concluded without any action on his part.
2. Article 7(2) of Directive 86/653 must be interpreted to the effect that the meaning of the term `customer belonging to that area' must be determined, where the customer is a legal person, by the place where the latter actually carries on its commercial activities. Where a company carries on its commercial activity in various places, or where the agent operates in several areas, other factors may be taken into account to determine the centre of gravity of the transaction effected, in particular the place where negotiations with the agent took place or should, in the normal course of events, have taken place, the place where the goods were delivered and the place where the establishment which placed the order is located.
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