The Court of Justice of the European Union (CJEU) has clarified the meaning under EU law of placing a product on the market in cross-border product liability cases (CJEU, judgment of 5 November 2026 – Case C-344/25). According to the judgment, the relevant place is not exclusively the place where a product leaves the manufacturer’s factory. It may also be located in the country in which the injured party acquires the product from a distributor or in which it is delivered to that party by a carrier. In addition, Article 5(1) of Regulation (EC) No 864/2007 (‘Rome II’) also covers products integrated as components into technical equipment.
Cross-Border Dispute Concerning Laying-Hen Batteries
The preliminary ruling proceedings arose from a dispute between the Italian company E. and the German company Z-GmbH. In the proceedings before the CJEU, E. was the claimant and appellant on a point of law, while Z. was the defendant and respondent on a point of law in the main proceedings. The language of the proceedings was German.
E. sought product liability damages under Italian law. The dispute concerned six laying-hen batteries of type S., which had been designed and manufactured by Z. in Germany. There were no contractual relationships between the parties.
Distribution Through Several Countries
Between 2009 and 2010, the manufacturer sold five laying-hen batteries to the Dutch company V. BV. It sold another unit to the French company O., which subsequently resold it to V. It was agreed that loading would take place in Germany; installation was not included in the total contract price. A technician employed by the manufacturer could be made available to the purchasing company if required.
V. sold four laying-hen batteries to various Italian companies. Those companies concluded leasing agreements with E. for complete aviary systems for laying hens. The two remaining laying-hen batteries were sold to another Italian company, which is said to have subsequently merged with E.
The systems were assembled at E.’s production site in Italy between July and December 2010. V. bore the cost of transportation from the manufacturer’s registered office in Germany to Italy. The assembly was carried out by V.’s employees with the involvement of the manufacturer’s employees.
Technical Problems and Proceedings to Date
According to the case file submitted to the Court, technical problems are said to have arisen in the aviary systems following assembly. In May 2011, V. therefore initiated independent evidentiary proceedings under Italian law against the manufacturer before the Gericht Ferrara (Ferrara Court). Repair work was carried out between September 2013 and January 2014.
In 2014, E. brought an action for damages in Italy. After the Gericht Ferrara had held that it lacked international jurisdiction, E. brought an action before the Landgericht Darmstadt (Darmstadt Regional Court). It alleged design and structural defects as well as malfunctions in the aviary systems.
The Landgericht dismissed the action on 1 July 2020. The Oberlandesgericht Frankfurt am Main (Higher Regional Court of Frankfurt am Main) dismissed the appeal on 17 December 2021. It held that German law applied and that, under that law, E. had no claim for damages against Z. E. pursued its claims by lodging an appeal on a point of law with the Bundesgerichtshof (BGH, Federal Court of Justice).
Relevant Conflict-of-Laws Rules of the Rome II Regulation
The Bundesgerichtshof considered the interpretation of Article 5(1) Rome II decisive for the resolution of the case. This provision governs which national law applies to non-contractual obligations arising from damage caused by a product.
Article 5(1), first subparagraph, Rome II contains a hierarchy of connecting factors. Without prejudice to Article 4(2) Rome II, the applicable law is determined successively according to the following criteria:
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Priority is given to the law of the country in which the injured party had their habitual residence when the damage occurred, provided that the product was marketed in that country.
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Failing that, the law of the country in which the product was acquired applies, provided that it was marketed there.
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If these criteria do not apply, the law of the country in which the damage occurred applies, provided that the product was marketed there.
If the person claimed to be liable could not reasonably have foreseen the marketing of the product, or of a product of the same type, in the country whose law would otherwise apply, the law of the country in which that person is habitually resident applies instead. In addition, Article 5(2) Rome II provides that the law of another country applies where, based on all the circumstances, the tort or delict is manifestly more closely connected with that country.
Meaning of ‘Placing on the Market’
The Bundesgerichtshof sought clarification in particular as to whether a product is placed on the market exclusively in the place where it leaves the manufacturer’s factory. Alternatively, the relevant country could be the country in which the end customer acquires the product from a distributor or in which a carrier delivers it to the customer.
The Oberlandesgericht Frankfurt am Main had understood placing on the market as ‘bringing to market’. It relied on the fact that the manufacturer had made the products available for collection at its site in Germany. Because, according to that assessment, the product had not been placed on the market in any of the countries referred to in points (a) to (c) of the first subparagraph of Article 5(1) Rome II, the court applied German law on the basis of the foreseeability rule.
By contrast, the Bundesgerichtshof considered that an autonomous interpretation under EU law might lead to the application of Italian law. The equipment had been delivered to and installed in Italy and, according to E.’s submissions, is also said to have caused the damage there.
Autonomous and Uniform Interpretation
The Rome II Regulation does not define placing on the market. As Article 5(1) Rome II does not refer to the law of the Member States for the meaning of that term, the CJEU held that it must be given an autonomous and uniform interpretation throughout the European Union.
The Court found that the German-language version of the Rome II Regulation and the German-language version of Directive 85/374/EEC on product liability both use the term ‘Inverkehrbringen’. By contrast, several other language versions use different terms. The German wording alone therefore did not support treating the terms used in the two legal instruments as equivalent.
Where language versions differ, the scheme and purpose of the relevant provision are decisive. Article 5 Rome II contains special conflict-of-laws rules for damage caused by products and, in that respect, specifies the general rule in Article 4 Rome II.
Placing on the Market Is Not Limited to the Manufacturer
According to the CJEU’s interpretation, Article 5(1) Rome II refers objectively to the product placed on the market. The provision does not depend on who manufactured it. Nor does the phrase ‘person claimed to be liable’ refer exclusively to the manufacturer; it may include any other person involved in distribution.
For the purpose of determining the applicable law, it is therefore irrelevant whether the injured party acquires the product directly from the manufacturer. Instead, the acquisition may form part of a distribution chain involving several distributors, leasing companies or transport companies.
The place where the product is placed on the market may therefore be:
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the place where the product leaves the manufacturer’s factory,
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the place where the injured party acquires it from a distributor, or
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the place where a carrier delivers it to the injured party.
In the CJEU’s view, limiting the relevant event to the product leaving the manufacturer’s factory would also largely deprive the foreseeability rule in the second subparagraph of Article 5(1) Rome II of its practical effect. If only the manufacturer’s own conduct were relevant, it would be difficult to envisage that such conduct could not have been foreseen by the manufacturer.
Objectives of the Conflict-of-Laws Rule for Product Liability
In its interpretation, the CJEU took account of the objective set out in recital 20 of the Rome II Regulation. The special rules on product liability are intended to ensure a fair distribution of the risks inherent in a modern, highly technological society, protect consumers’ health, maintain incentives for innovation, secure undistorted competition and facilitate trade.
To that end, Article 5 Rome II combines a tiered determination of the applicable law with a foreseeability clause. Particular significance is attached to the country in which the injured party is habitually resident when the damage occurs.
If only the place where the product leaves the factory were taken into account, that place would be accorded a priority under conflict-of-laws rules that does not follow from the Regulation. The other connecting factors could then generally apply only where the habitual residence, acquisition or occurrence of the damage was located in the country of manufacture.
Possible Application of Italian Law
According to the case file submitted to the CJEU, the six laying-hen batteries had been manufactured and placed on the market in Germany. E., however, did not acquire them in Germany. The acquisition took place either with the involvement of several trading and transport companies under leasing agreements for complete aviary systems or through their resale to an Italian company that is said to have subsequently merged with E.
Subject to the Bundesgerichtshof’s assessment of the facts, the judgment indicates that Article 5(1) Rome II supports the application of Italian law. In that regard, the CJEU relied on three circumstances:
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E. was habitually resident in Italy when the alleged damage occurred.
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The products concerned were acquired in Italy.
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The alleged damage occurred in Italy.
The final determination of the facts and the decision in the main proceedings remain matters for the Bundesgerichtshof; the proceedings have therefore not been finally concluded, and the alleged defects have not yet been established.
Component Products of an Overall Technical System
A further question concerned the classification of the laying-hen batteries as components of the complete aviary systems. It had to be determined whether a product also falls within Article 5(1) Rome II if it is acquired or leased not independently but as a component of more extensive technical equipment.
Definition of Product Includes Components
For the definition of a product, the CJEU referred to Article 2 of Directive 85/374. Under that provision, every movable item is a product, even if it is incorporated into another movable or immovable item. Article 7 of the Directive also expressly refers to a component incorporated into a finished product.
The Court inferred from this that Article 5(1) Rome II covers both independent items and products incorporated into technical equipment. The placing of a product on the market does not end when a processor takes possession of it or incorporates it as a component into an intermediate or finished product.
A different interpretation would make the scope of the conflict-of-laws rule dependent on how an item was technically manufactured or assembled. The CJEU regarded this as an artificial and arbitrary distinction that could not justify different treatment under conflict-of-laws rules.
Two Questions Remained Unanswered
The Bundesgerichtshof had also sought to ascertain which national law applies if none of the connecting factors in Article 5(1) Rome II is applicable. The CJEU declared this question inadmissible. Neither the case file nor the answers to the other questions indicated that the place where the products were placed on the market could not be determined or that the products had not been placed on the market at all. An answer would therefore have concerned a hypothetical scenario.
The Court also did not answer the question concerning the meaning of a ‘product of the same type’ in the second subparagraph of Article 5(1) Rome II. There was no indication that the manufacturer could not reasonably have foreseen the marketing of the products concerned in Italy. The question was therefore likewise not relevant to the resolution of the case.
Significance for Cross-Border Supply Chains
The decision makes clear that a product’s entire distribution chain must be considered when determining the product liability law applicable to it. Neither delivery to a carrier at the manufacturer’s registered office nor integration into an overall system necessarily limits the place where the product is placed on the market to the manufacturer’s country. Acquisition by and delivery to the end customer may constitute independent connecting factors.
For manufacturers, suppliers, distributors and commercial customers, this may raise questions concerning the classification of international supply, leasing and distribution transactions. MTR Legal Rechtsanwälte advises companies and investors on cross-border matters; further information is available from its commercial law advisory practice.
