Incoterms clause “Ex Works” in international sales contracts and the impact on jurisdiction

The Incoterms drafted and periodically updated by the International Chamber of Commerce (ICC) are of great importance in the regulation of international sales contracts.

Incoterms are a series of model commercial terms developed for the interpretation of the most used commercial terms in contracts for the sale of goods and to determine exactly the scope of obligations, the allocation of costs and risks between the seller and the buyer. In other words, by subjecting the contract to one of the Incoterms outlined by the ICC, the parties agree to share the costs and risks of the transaction according to the formula relevant to the chosen Incoterms.

Their application therefore derives from the express reference in the contract. For example, if the parties to the contract expressly indicate that the sale is governed by Ex Works (“EXW”) clause, thereby defining the place of delivery of the goods, the seller is released from the obligation of delivery, costs, and risks when they make the goods available to the buyer at the location indicated. This generally corresponds to the seller's premises, without any obligation to load or clear customs.

Furthermore, the inclusion of an EXW clause does not only mean transferring costs and risks to the buyer from the moment the seller delivers the goods by handing them over to the carrier at the agreed location, but also establishes that this is where the delivery obligation must be fulfilled and, consequently, it is also relevant - insofar as it is of interest here - in terms of jurisdiction, identifying which court will decide any dispute between two parties belonging to different countries and relating to any obligation arising from the contract, including that of paying the price of the goods.

In international contracts between the parties based in the European Union (the “EU”), jurisdiction is governed by EU Regulation No. 1215/2012, known as  Brussels I bis, which, in addition to the fundamental principle that jurisdiction must be exercised by the EU country in which the defendant is domiciled (Article 4 of the Regulation), provides for a number of special rules on jurisdiction.  For example, in cases of the sale of movable goods, jurisdiction lies with the court of the place where “the goods were or should have been delivered under the contract” (Article 7(1)(b) of the Regulation).

In order to establish the place of delivery of the goods and, consequently, the jurisdiction, it is necessary to consider the EXW clause that may be included in a contract. As established by the Court of Justice of the European Union (“CJEU”) and by the Italian Supreme Court of Cassation (“CSdC”), once the EXW clause is included in a contract of sale, it identifies the place of delivery of the goods and, consequently, the jurisdiction.

On this point, EU case law ruled more than ten years ago in the well-known "Electrosteel" judgment of June 9, 2011, handed down by the CJEU (Case C-87/10, Electrosteel Europe SA v. Edil Centro S.p.a), according to which, in determining whether the place of delivery of the goods is determined "on the basis of the contract," the court seized 'must take into account all the relevant terms and clauses of that contract which are capable of clearly identifying that place, including the terms and clauses generally recognized and established by international trade practice', such as Incoterms, provided that they are 'capable of clearly identifying that place'. Only in the absence of such an agreement, i.e., on a residual basis, does the rule apply that delivery is deemed to have been completed, for the purposes of jurisdiction, at the destination of the goods.

Previously, the CSdC considered that the EXW clause was not sufficient to express the parties' intention to indicate the place of delivery for the purposes of jurisdiction. Only recently has the Supreme Court changed its position to align itself with that of the CJEU and, therefore, affirmed that the EXW clause included in a sales contract is not limited to governing the transfer of risk but also the place of delivery of the goods and, consequently, jurisdiction.

More specifically, in its recent ruling no. 22032 of July 31, 2025, the Italian CSdC, called upon to rule on a dispute between an Italian seller and a Romanian buyer, stated that "in the case of international distance sales of movable goods, disputes concerning the payment of goods shall be referred, pursuant to Article 7(1)(b) letter b) of EU Regulation No. 1215 of 2012, to the jurisdiction of the judicial authority of the place of physical delivery of the goods, for this purpose considering the Incoterms Ex Works (EXW) clause, if referred to in the contract, as suitable for governing not only the transfer of risk but also the place of delivery of the goods (identified by Incoterms at the supplier's premises) and, consequently, jurisdiction, unless the contract itself contains different and additional elements that lead to the conclusion that the parties intended a different place of delivery."

With ruling No. 4716 of February 22, 2025, the Italian CSdC, called upon to rule on a dispute between an Italian seller and an Austrian buyer, stated that "when an Incoterm EXW clause is included in a sales contract, the place of delivery of the goods must be considered, for all purposes, to be the seller's factory or registered office," since the presence of such a clause is irrelevant for the purposes of determining the place of delivery only if "the existence of a clear intention of the parties to derogate from it is demonstrated."

The same opinion was expressed in ruling No. 11346 of May 2, 2023, in which the Italian CSdC, called upon to rule on a dispute between an Italian seller and a French buyer, held that in the context of an international contract for the sale of goods, unless proven otherwise, the inclusion of the Ex Works clause in the contract documents as agreed by the parties (correspondence to this effect between orders sent by the buyer and invoices issued by the seller being sufficient) is sufficient to determine the place of delivery of the goods and, consequently, in application of the common European rules (Brussels I bis Regulation), the jurisdiction of the Italian court applies, unless the contract contains other elements that lead to the conclusion that the parties intended a different place of delivery.

In conclusion, given the suitability of the Incoterms Ex Works clause to identify the place of delivery for the purposes of jurisdiction, it is useful to adopt different drafting and management approaches in the negotiation and drafting of sales contracts between EU parties, depending on the interests of the parties to the contract and the contractual scenarios.