1. This appeal concerns Article 23 (“Prorogation of Jurisdiction”) of the
Brussels I Regulation (Council Regulation No. 44/2001 on jurisdiction and
the recognition and enforcement of judgments in civil and commercial
matters). The issue is whether an agreement between the appellants
(whom I will call “the plaintiffs”) and the second named respondent
(whom I will call “the second named defendant”) confers exclusive
jurisdiction on the courts of Italy. The appeal is taken from the judgment
in the High Court delivered on 28 June 2006 by de Valera J, holding in
favour of Italian jurisdiction.
2. The plaintiffs have a joinery business in Abbeydorney, Co Kerry. It
is unnecessary for the purposes of this case to distinguish between
the plaintiffs. I will refer to them throughout as if they were a single
party. In late 2001, the plaintiffs wished to modernise and improve
their business. They contacted a number of suppliers of woodworking
machinery including the defendants.
3. The first named defendant is a company incorporated in the United
Kingdom. The second named defendant is a company, associated with the
first named defendant, and incorporated in Italy. It appears that the latter
is the ultimate supplier of the equipment.
4. By an agreement made in December 2001 the plaintiffs agreed to
buy a specialised woodcutting machine, described as a CNC router,
from the first named defendant. On 21 December 2001 the plaintiffs
signed a printed order for the machine to be supplied by the first named
defendant. That form contained the following statement: "Sold subject to
Masterwood Spa Rimini Terms and conditions of Sale." That agreement
was not, however, made with the second-named defendant. It contained
no clause providing for choice of jurisdiction. The plaintiffs paid a
substantial deposit by way of cheque, which was, at the request of the
first named defendant, made payable to the second named defendant.
5. Subsequent to the making of that agreement, difficulties arose with
regard to the delivery date which had been agreed by the first named
defendant. The second-named defendant would not agree to the original
delivery date. Ultimately a new agreement came into existence. In the
month of March 2002 the second-named defendant faxed an order
form to the plaintiffs which was signed by and on behalf of the plaintiffs
and returned. At the same time the plaintiffs (in fact the first-named
plaintiff) signed a document headed: "General Conditions of Sale..."
Those conditions included the clause which is the subject of the dispute
and is as follows:
"For any controversy arising from the present contract or connected to the
same, the Court of Rimini shall have sole jurisdiction."
6. The machinery was delivered in due course to the plaintiffs. The
present action relates to complaints in respect of alleged defects in the
goods. The plaintiffs claim to have suffered severe loss and damage to
their business.
7. On 27th June 2003 the plaintiffs issued the present proceedings against
both defendants. The third defendant is joined as having provided finance
to the plaintiffs in respect of the transaction.
It is not a party to the appeal.
8. It is not clear from the statement of claim whether the plaintiffs allege
that that contract is with one or other of the defendants or with both. In
their written submissions, they state that they rely on the contract of 21st
December 2001 with the first named defendant. They also refer to that
defendant as being the agent of the second-named defendant. For the
purposes of the present judgment, it is sufficient to say that a contract is
alleged to have been made with the second-named defendant. It is the
terms of that contract, if it exists, which are relevant.
9. The second-named defendant entered an appearance expressed to be
purely for the purpose of contesting jurisdiction and brought a notice of
motion in the High Court seeking an order setting aside service upon it. It
relies on the printed condition which assigns jurisdiction to "the Court of
Rimini." It claims that by virtue of Article 23 of the Brussels Regulation,
that court has exclusive jurisdiction.
10. It is not disputed by the plaintiffs that the documents, assuming them
to be contract documents, of March 2002 were signed on their behalf. It
is not necessary at this stage to decide whether there was a contract with
the first named defendant. That defendant has not contested jurisdiction.
The purpose of the present appeal—as was the application in the High
Court—is to determine whether, on the assumption that the contract
was with the second-named defendant, it contained the clause assigning
exclusive jurisdiction to "the Court of Rimini."
11. The learned High Court judge was satisfied that the plaintiffs had
agreed to that clause in the agreement. He pointed out that it was clearly
set out in the body of the agreement and that it occurred just above the
signature of the first named plaintiff on the printed conditions. None of
this is denied. The first named plaintiff, in a lengthy affidavit, complains
that no such clause was at an time drawn to his attention and maintains
that the agreement was made in December 2001 with the first-named
defendant.
12. Article 23 of Brussels I occurs in Section 7 under the heading
"Prorogation of Jurisdiction". It is as follows:
1. “If the parties, one or more of whom is domiciled in a Member State,
have agreed that a court or the courts of a Member State are to have
jurisdiction to settle any disputes which have arisen or which may arise in
connection with a particular legal relationship, that court or those courts
shall have jurisdiction. Such jurisdiction shall be exclusive unless the
parties have agreed otherwise. Such an agreement conferring jurisdiction
shall be either:
a. in writing or evidenced in writing; or
b. in a form which accords with the practices which the parties have
established between themselves; or
c. in international trade or commerce, in a form which accords with a
usage of which the parties are or ought to have been aware and which
in such trade or commerce is widely known to, and regularly observed
by, parties to contracts of the type involved in the particular trade or
commerce concerned…”
13. It is well-established that it is for the courts of the Member States
to determine the facts. That includes deciding the terms of the contract.
(See Leo Laboratories Ltd v Crompton BV [2005] 2 I.R. 225 at 235;
Bio-Medical Research Ltd v Delatex SA [2000] 4 I.R. 307; Case
C-420/97Leathertex v Bodetex [1999] ECR I-6747).
14. According to the case law of the Court of Justice, "the requirements
laid down by article 17 of the Convention must be strictly interpreted
in so far as that article excludes both jurisdiction as determined by the
general principle of the defendant's courts laid down in article 2 and the
special jurisdictions provided for in articles 5 and six……” (Case C-106/95
MSG v Gravières Rhénanes [1997] ECR I-911, paragraph 14). The Court
was there referring to article 17 of the Brussels Convention, which has
been replaced by Brussels I. Article 23 is in the same terms as the former
Article 17. The Court explained that, "by making the validity of any
jurisdiction clause subject to the existence of an agreement between
the parties, Article 17 imposes on the court before which the matter
is brought the duty of examining, first, whether that clause conferring
jurisdiction upon it was in fact the subject of consensus between the
parties which must be clearly and precisely demonstrated…"(ibid.
paragraph 15).
15. In the present case the appellants do not dispute the content of the
clause. They rightly accept that, if it applies, it is beyond dispute that the
courts of Italy ("the Court of Rimini") have exclusive jurisdiction. On the
facts, paragraph (b) of article 23 paragraph 1 cannot apply, since there
was no established practice between the parties.
16. The requirements of article 23 can, therefore, be satisfied if either
the jurisdiction clause is "in writing or evidenced in writing," so as to
satisfy subparagraph (a) or is in a form which conforms with usage in
international trade, as described in subparagraph (c).
17. The second-named defendant in its written submissions relies
principally on (a). In my view, their reliance is justified. The clause is in
a written document which was signed. Nothing more is required. I am
satisfied that article 23 applies. The jurisdiction clause is both in writing
and evidenced in writing. Article 23 does not appear expressly to require
the signature of the party to be bound. In any event, the contract and the
clause are signed.
18. In these circumstances, it is strictly unnecessary to consider whether
subparagraph (c) applies. In my view, however, it is equally clear that
it does. I will not repeat the analysis set out in my judgment in Bio-
Medical Research Ltd v Delatex SA, cited above. The Court of Justice,
in MSG v Gravières Rhénanes, already cited, recalled that the original
form of article 17 of the Convention had been amended so as to provide
that "in international trade or commerce, any jurisdiction clause may
be validly concluded in a form which accords with practices in that
trade or commerce of which the parties are or ought to have been
aware." (Paragraph 16). While laying emphasis on the need to establish
consensus on the application of the clause, the court nonetheless
continued:
"To take the view, however, that the relaxation thus introduced relates
solely to the requirements as to form laid down by article 17 by merely
eliminating the need for a written form of consent would be tantamount
to disregarding the requirements of non-formalism, simplicity and speed
in international trade or commerce and to depriving that provision of a
major part of its effectiveness.
Thus, in the light of the amendment made to article 17......, consensus on
the part of the contracting parties as to a jurisdiction clause is presumed
to exist where commercial practices in the relevant branch of international
trade or commerce exist in this regard of which the parties are or ought to
have been aware.” (paragraphs 18 and 19 of the judgment).
19. It would be to overlook the obvious, if the court were to ignore
the admitted signature of the first named plaintiff on a set of printed
conditions containing a clear and express jurisdiction clause. It may well
be that the first-named plaintiff paid little attention to the terms of printed
conditions. That is commonplace. However, people engaged in trade,
certainly in international trade, must be taken to be aware that printed
conditions contain clauses which can affect their rights. They choose to
ignore them at their peril. That is why Article 23, section 1, subparagraph
(c) refers to practices of which parties “ought to have been aware.”
20. In my view, it is inescapable that the jurisdiction clause was part of
any agreement between the plaintiffs and the second-named defendant.
21. For these reasons, I would dismiss the appeal and affirm the order of
the High Court.