## Facts

- Saar-Ferngas AG, a German gas undertaking, claimed Somafer SA’s demolition work near its pipelines required protective measures and sought reimbursement of resulting costs in German courts.
- Somafer SA was incorporated in France and maintained an office in Germany described as a “Representation in Germany.”
- Saar-Ferngas relied on Article 5(5) of the 1968 Brussels Convention, which permits suit in the courts where a “branch, agency or other establishment” is located for disputes arising from its “operations.”
- Somafer contested German jurisdiction, arguing its German presence did not qualify as a “branch, agency or other establishment” under Article 5(5).

## Issues

1. Whether “branch, agency or other establishment” and “operations” in Brussels Convention Article 5(5) require an autonomous Convention-wide meaning rather than meanings supplied by national law.
2. What criteria determine whether an entity constitutes a “branch, agency or other establishment” under Article 5(5).
3. What disputes “arise out of the operations” of such a branch, agency, or establishment for purposes of Article 5(5).

## Decision

- The Court held that the concepts in Article 5(5) must be interpreted autonomously and uniformly across Contracting States to ensure legal certainty and equal treatment when departing from the general domicile-based jurisdiction rule.
- It defined a “branch, agency or other establishment” as a place of business with an appearance of permanency, functioning as an extension of the parent entity, having its own management, and being materially equipped to negotiate business with third parties so those third parties can transact locally without dealing directly with the foreign head office.
- It held that “operations” covers:
  - disputes concerning internal management of the local entity (including matters tied to premises and local staffing), and
  - disputes concerning contractual or non-contractual obligations arising from undertakings entered into or activities carried out by the local entity on behalf of the parent, where performance or the relevant activities occur in the State where the place of business is located.
- It left to the referring national court the fact-specific determination whether Somafer’s German representation met these criteria and whether the claim arose from its operations.

## Legal Principles

- Jurisdictional concepts in the Brussels Convention that create special jurisdiction must receive autonomous, uniform interpretation to preserve predictability and equality of rights and obligations.
- A “branch, agency or other establishment” exists where a stable, outward-facing place of business operates as an extension of a foreign parent, with local management and capacity to deal with third parties.
- “Disputes arising out of the operations” includes both contractual and tort-based claims connected to the local entity’s internal functioning and its external dealings or activities undertaken for the parent in the forum State.
- The Court supplies the interpretive test; national courts apply it to the established facts to decide jurisdiction.

## Conclusion

The Court construed Brussels Convention Article 5(5) as an exception to domicile-based jurisdiction that depends on uniform definitions: a branch-like place of business must present a permanent, locally managed extension able to transact with third parties, and “operations” includes contractual and non-contractual disputes linked to that local entity’s management and activities; the referring court must apply these standards to decide whether jurisdiction exists.


Somafer S.A. v. Saar-Ferngas A.G., Case 33/78, [1978] E.C.R. 2183 (Ct. J. Eur. Communities 1978)