Erich Gasser GmbH v. Misat Srl.

Austria-based Erich Gasser GmbH (Gasser) (plaintiff) sold children’s clothing to Italy-based Misat Srl. (Misat) (defendant) pursuant to a contract providing that any disputes be litigated in Austria. Misat fell behind in its payments to Gasser, but before Gasser could file suit in Austria, Misat sued Gasser in Italy, seeking a declaration that the contract had been terminated and that Misat did not owe any money to Gasser. Gasser subsequently sued Misat in Austria, but Misat argued that the Austrian court did not have jurisdiction due to, among other things, lis pendens (i.e., its existing Italian suit). The Austrian trial court stayed Gasser’s suit in favor of Misat’s Italian suit based on the Brussels Regulation (the predecessor to the Brussels I Regulation), which prohibited parallel litigation of the same claim. Gasser appealed, arguing that (1) the forum-selection clause permitted the Austrian court to proceed despite the Brussels Regulation and (2) even if the Brussels Regulation ordinarily would require the Austrian court to stay its proceedings, the extremely slow pace of Italy’s courts allowed the Austrian court not to wait for the Italian court in this case. The Austrian appellate court referred the case to the European Union Court of Justice, asking whether the Brussels Regulation (1) permitted a court that had jurisdiction pursuant to a forum-selection clause to resolve a litigation despite an earlier-filed suit in another jurisdiction and (2) could be disregarded if the courts in which the earlier-filed suit took a very long time to resolve cases.