Euro Herramientas S.A.U. v. The Stanley Works Limited

At a glance

Parties

Euro Herramientas S.A.U. (Spain) v. The Stanley Works Limited (United Kingdom)

Case no.

Tribunal de commerce de Versailles, RG No. 2018F00474

Court

Tribunal de commerce de Versailles (Commercial Court of Versailles), 3rd chamber

Forum and rules

French court proceedings; arbitration clause provides for American Arbitration Association rules, seat Hartford, Connecticut

Treaty

New York Convention 1958, Article II (relied on by the respondent)

Court

Alain Dolleans (President of chamber), Michel Haegel, Serge Goldstein Desroches

Sector

Industrial and DIY tools distribution; commercial agency

Outcome

The court declined jurisdiction because the AAA arbitration clause in the 2007 distribution contract applied, and it dismissed the respondent's counterclaim for abusive proceedings (27 September 2019).

Amount

Claimed: among other heads, commissions EUR 1,913,054.65, stock buy-back EUR 1,156,512.93, replacement machines EUR 47,808.02, goodwill indemnity EUR 2,000,000, investments EUR 649,313.71, severance costs EUR 443,047.61 and business value EUR 3,772,198.10. Awarded: nothing. Euro Herramientas was ordered to pay EUR 10,000 under Article 700 CPC plus costs, with court fees of EUR 73.22. Stanley's EUR 25,000 claim for abusive proceedings was dismissed.

The dispute

On 24 April 2007, Euro Herramientas, a Spanish company, signed a contract to distribute Stanley products in Spain and Portugal. The contract expired on 31 December 2007 and could be renewed each year by express written agreement. The Stanley Works Limited is the British subsidiary of the US Stanley Black & Decker group. Through its branch in Trappes, France, it centralised orders, correspondence and invoicing under the contract. On 14 April 2008 Stanley gave notice that the agreement would not be renewed for 2009. Euro Herramientas claimed that it had also acted as Stanley's commercial agent and that only the distribution contract had been ended. It sued the British company in Versailles for termination indemnities under the EU Commercial Agents Directive 86/653 and Spanish agency law. It relied on a clause in the Trappes branch's invoices that gave jurisdiction to the Versailles Commercial Court. Stanley Works objected that the court lacked jurisdiction because Article 23 of the contract provided for AAA arbitration.

Key holdings

1. The jurisdictional objection was admissible because Stanley Works raised it before any defence on the merits. An international arbitration agreement makes State courts incompetent to hear the dispute it covers. p. 5
2. The arbitration clause extends to Stanley Works and its French branch even though neither signed the contract. Under the contract's own notice provisions, they were directly involved in performing it and are presumed to have known of the clause. The jurisdiction clause on the branch's invoices therefore does not replace the arbitration clause of the 2007 master contract. pp. 6–7
3. The clause still applies after the contract expired. Article 23 expressly provides that it survives termination, so the argument that an oral contract without a dispute clause replaced it was rejected. p. 7
4. The argument that arbitration would evade overriding mandatory rules (agents' termination indemnity under Articles 17–18 of Directive 86/653) goes to applicable law, not jurisdiction. Arbitrators must apply public policy rules, and the court cited the Cour de cassation's view that claims for breach of commercial relations are not reserved to State courts. The court declared itself incompetent. p. 7
5. Stanley Works' counterclaim for damages for abusive proceedings was dismissed. Its grounds were that Spanish courts had already twice applied the clause, but Euro Herramientas had raised a new argument based on the invoice clause. Euro Herramientas must pay EUR 10,000 under Article 700 CPC and the costs. pp. 7–8

Procedural history

1. 24 April 2007Distribution contract for Spain and Portugal signed, with an AAA arbitration clause (Article 23), seat Hartford, Connecticut.
2. 14 April 2008Stanley gives notice that the agreement will not be renewed for 2009.
3. 2012Euro Herramientas sues Stanley's Iberian subsidiary in Spain. According to Stanley Works, Spanish first-instance courts and the courts of appeal of Barcelona and Madrid dismissed the claims on the basis of the arbitration clause.
4. 13 July 2018Euro Herramientas serves a summons on The Stanley Works Limited before the Versailles Commercial Court.
5. 21 June 2019Hearing before the judge in charge of the case, Alain Dolleans.
6. 27 September 2019Judgment: the court declares itself incompetent, refers the parties to the proper forum and dismisses the counterclaim.

Tribunal, counsel and experts

Decided by

• Alain Dolleans Judge, Tribunal de commerce de Versailles (President of chamber; judge in charge of the case)
• Michel Haegel Judge, Tribunal de commerce de Versailles
• Serge Goldstein Desroches Judge, Tribunal de commerce de Versailles

For the claimant

Cabinet d'avocats Interbarreaux · Association d'avocats Alfredo & Bayssières

For the respondent

Isabelle Toussaint · Jacques-Antoine Robert

Run a conflict check on these names →

Keywords

• New York Convention Article II
• arbitration agreement
• lack of jurisdiction
• extension of arbitration clause to non-signatories
• jurisdiction clause in invoices
• Brussels I bis Article 25
• survival of arbitration clause
• overriding mandatory rules
• commercial agency
• Directive 86/653/EEC
• termination indemnity
• distribution contract
• American Arbitration Association
• Hartford Connecticut
• Stanley Black & Decker
• abusive proceedings
• France

Summary generated with AI from the published documents — refer to the award for the authoritative text.