Industrie Tessili Italiana Como v. Dunlop A.G.

After conducting negotiations in Como, Italy, Dunlop A.G. (Dunlop) (defendant), a German company based in Hanau, Germany, decided to order 310 women’s ski suits from Industrie Tessili Italiana Como (Tessili) (plaintiff). Dunlop sent an order by letter dated April 29, 1971, from its offices in Hanau. The order included a jurisdiction clause that required all disputes to be presented to the German courts in Hanau. Tessili sent the ordered goods on July 31, 1971, along with an invoice that provided that jurisdiction was proper only in the Italian courts in Como. Dunlop alleged there were defects in the suits. After considerable back-and-forth between Tessili and Dunlop, Tessili sued in Hanau, seeking to annul the contract and argued that the Hanau court did not have jurisdiction over the matter. The Hanau court rejected the jurisdictional argument, and Tessili appealed. The appellate court determined that jurisdiction was subject to the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (the convention). The foundation of the convention was jurisdiction in the defendant’s domicile. However, the convention had exceptions for contract matters. Under the convention, a party could be sued regarding contract matters in “the place of performance of the obligation in question.” The appellate court referred the issue to the European Union Court of Justice for its determination of what that clause meant.