(1) A decision by a court as to the liability to the obligee of one joint and several obligor does not affect:
(a) the obligations to the obligee of the other joint and several obligors; or
(b) the rights of recourse between the joint and several obligors under Article 11.1.10.
(2) However, the other joint and several obligors may rely on such a decision, except if it was based on grounds personal to the obligor concerned. In such a case, the rights of recourse between the joint and several obligors under Article 11.1.10 are affected accordingly.
1. No effect on the other obligors’ obligations
If the obligee commences judicial or arbitral proceedings against only one (or some) of the joint and several obligors, any decision by the court will not in principle affect the obligations of the co-obligors who were not called to court. Whatever the decision, the other obligors will still be bound in the original terms.
1. Bank C has loaned EUR 1,000,000 to joint and several borrowers A and B. A is sued for reimbursement by X and the court orders A to pay X EUR 1,000,000. This decision in itself does not affect B’s obligation; B is still bound to pay EUR 1,000,000 to X. Naturally, if the judgment is enforced and A pays X EUR 1,000,000, B’ obligation towards X will be extinguished under Article 11.1.5 and B will be subject to A’s contributory recourse under Article 11.1.10.
2. Company A and company B have jointly and severally undertaken to provide transportation for company X’s deliveries to its clients. Performance is defective and X sues A. The court orders A to pay damages. B is not bound by that finding of defective performance, and its obligations are not increased by the amount of the damages.
2. No effect on the rights of recourse
A court decision rendered against one joint and several obligor furthermore has no effect on the rights of recourse between the joint and several obligors under Article 11.1.10.
3. The facts are the same as in Illustration 2. A pays X the damages ordered by the court. A may not claim to recover part of the damages from B.
3. Right of the other joint and several obligors to avail themselves of the decision
The principle stated in paragraph (1) of this Article does not have to be enforced when the other co-obligors find it in their interest to rely on the decision. For such cases, paragraph (2) grants the other joint and several obligors the right to rely on it. However, the rule does not apply when the decision was based on grounds personal to the obligor concerned.
4. Art collectors A and B have joined in purchasing a painting at an auction and they are jointly and severally bound to pay the price of GBP 800,000. The price is not paid and the auction house sues A. The court accepts some of A’s arguments concerning the quality of the painting, which appears to have been restored, and reduces the price to GBP 600,000. B may rely on that decision to benefit from the same reduction of its obligations towards the auction house.
5. The facts are the same as in Illustration 4, except that A’s refusal to pay the auction house is grounded on a claim that the painting is a fake. This is confirmed by an expert opinion ordered by the court. Accordingly, the contract is avoided. B may also rely on that decision to be discharged of its obligations towards the auction house.
6. The facts are the same as in Illustration 4, except that A had separately obtained from the auction house a certificate stating that the painting had been shown at some major exhibitions. This turns out to be untrue, and a court orders the auction house to pay damages to A. B may not rely on that decision, since it is based on grounds personal to A.
4. Rights of recourse affected accordingly
If a joint and several obligor avails itself of a court decision rendered against its co-obligor, the right of recourse of the co-obligor will be affected accordingly.
7. The facts are the same as in Illustration 4. A’s obligation towards the auction house has been reduced to GBP 600,000. If A, after having paid this amount to the auction house, initiates a contributory recourse against B, the latter may avail itself of the court decision to have its contributory share reduced accordingly.