PANEL: Carroll J
JUDGMENTS:
This is an application to set aside service of the notice of plenary
summons on the defendants. Both defendants are companies domiciled
in France and they contest the jurisdiction of the Irish courts to hear
this matter. The plaintiffs claim that the Irish courts have jurisdiction by
virtue of art. 17 of the Convention on Jurisdiction and the Enforcement
of Judgments in Civil and Commercial Matters (including the protocol
annexed to that convention) signed at Brussels on the 27th September,
1968 ("the Brussels Convention") which acquired the force of law in
the State by virtue of the Jurisdiction of Courts and Enforcement of
Judgments (European Communities) Act, 1988 ("the Act of 1988"). A
claim under art. 6 (a) of the same convention was dropped.
The plaintiffs' claim arises out of an agreement described as a conline
booking note dated the 22nd April, 1991. They rely on clause 3 of the
carrier's bill of lading form being general conditions printed on the reverse
of the initial page of the conline booking note. Clause 3 provides:-
"Jurisdiction. Any dispute arising under this bill of lading shall be decided
in the country where the carrier has his principal place of business and
the law of such country shall apply except as provided elsewhere herein."
The plenary summons was issued on the 24th June, 1991. The statement
of claim, delivered on the 3rd June, 1992, claims that the first plaintiff,
named as N. Ltd., is the carrier and the second plaintiff is the owner of
the vessel L. The title was later amended to substitute H (trading as N)
as the first plaintiff. The statement of claim states that by the conline
booking note dated the 22nd April, 1991, the plaintiffs agreed to carry
certain cargo to India from Antwerp on the L. for US $340,000. The time
for shipment was to be from the 3rd to the 7th June, 1991. It is claimed
in para. 3 (a) that the defendants were aware that the plaintiffs' address
for business was (…). The problems encountered in connection with
loading the vessel after it moored at Antwerp on the 5th June, 1991, are
set out in the statement of claim but are not relevant to the issues in this
application which deals solely with jurisdiction. The second defendant was
the supplier of the goods to be shipped to India. The first defendant was
employed to arrange carriage of the goods.
The plaintiffs brought a motion for judgment in default of defence
grounded on an affidavit dated the 11th April, 1993, and sworn by
the plaintiffs' solicitor, Mr Daniel J Hanly. He claims the booking note
dated the 22nd April, 1991, was exchanged via fax and he exhibits the
fax document which was sent on the 25th June, 1991, from T to R. It
consists of two printed pages and three typed pages of special conditions
numbers 20 to 37. He states that R, ship brokers in the U.K., acted as
agents on behalf of the plaintiffs and that the document was prepared by
and returned by T. which he claims at all material times acted and held
themselves out as acting on behalf of the defendants. He claims that the
principal place of business of the plaintiffs is (…)(a different address to the
address mentioned in para. 3 of the statement of claim) and he claims the
defendants were aware when engrossing other proceedings in Belgium (ie
a petition dated the 13th June, 1991) that the ship owner was in Ireland.
The defendants brought a motion dated the 28th June, 1993, to set aside
service of the notice of the plenary summons and in support thereof Mr
Y, director of the first defendant, swore an affidavit dated the 25th June,
1993. In that affidavit he claimed that the first defendant did not agree in
writing (nor was there anything evidenced in writing) that jurisdiction was
conferred on the courts of Ireland. He denied that T. were agents of the
first defendant and he set out the circumstances under which the terms of
the conline booking note were agreed.
On the 15th February, 1991, T. telexed to the first defendant a list
of vessels described as vessels which they represented ("que nous
representons"). On the 10th April, 1991, T. faxed the first defendant
with information concerning L. stating they "have been authorised by the
owners to offer you firm as follows". There follows a number of specific
clauses, the last one being "B/ note subject further terms and details."
On the 18th April, 1991, there was another telex from T. to the first
defendant headed "recap of fixture" with a number of details including
"booking note subject further terms/details". It concluded by asking for
a telex in confirmation so that it could be sent to the owners for their
own confirmation. On the 19th April, 1991, the first defendant telexed
T. to confirm the fixture of L. as per telex recap of the 18th April, 1991,
with the proviso that the third paragraph was to read as follows . . . (the
content is not relevant). On the 22nd April, 1991, T. sent a telex to the
first defendant setting out details of the proposed booking note which
they intended to send to the owners for their own comments. This telex
sets out what would appear in the thirteen boxes of the printed form of
conline booking note. (The shippers are shown as S. Group, Republic
of Ireland). Then it states "part II as printed" followed by additional
clauses 20 to 35. There was an exchange of further telexes. Then by
fax dated the 16th May, 1991, from M.I.T. to the first defendant (1) the
booking note details were accepted and (2) the packing list as per fax
was accepted but with the addition of the phrase "cargo to be stackable
in the way it can be stacked". After this a dispute arose about packing
and loading. In the course of that dispute a pro forma booking note dated
the 22nd April, 1991, was faxed for the first time on the 13th June, 1991,
from M.I.T. to the first defendant but only the front side of it. (This time
the carriers are described as N Ltd. with no address). The conditions
printed on the reverse side of the first page were not faxed.
An original conline booking note (in duplicate with one copy) still dated
the 22nd April, 1991, was posted to the first defendant for signature with
the terms of the carriers' bill of lading included for the first time together
with a covering letter dated the 24th June, 1991, but was not received
by the first defendant until the 1st July, 1991. (The carriers are here
described as N Ltd., ((…) Republic of Ireland).
Mr L was cross-examined on his affidavit and I fully accept his evidence.
He confirmed that T. was not their agent; it acted for the owners. He was
in the business for 25 years and his company mostly dealt with owners
but sometimes with brokers like T. They had dealt with T. five to ten times
over the 25 years. He said he did not propose the conline booking note.
He said he was mainly familiar with part one of the conline booking note.
When they negotiated they worked on the page with the boxes. He said it
was not true that he knew what the clauses were before clause 20.
While the affidavit of R sought to throw doubt on the defendants' claim
that T. were not their agents, I accept the defendants' claim that they
were not. As further proof that T. were not agents of the defendants, Mr
L. points out in his affidavit that M.I.T. issued the bill of lading as agents
for the carriers on the 17th June, 1991. They also demanded payment
for freight on behalf of the plaintiffs. I am satisfied that Mr L. was not
furnished with a copy of the general conditions until the 1st July, 1991,
that the clause conferring jurisdiction was not drawn to his attention and
that he did not specifically know exactly what were the general conditions
printed on the back.
Article 17 of the Brussels Convention provides:-
"If the parties, one or more of whom are domiciled in a Contracting
State, have agreed that a court or the courts of a Contracting 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 exclusive jurisdiction. Such an agreement
conferring jurisdiction shall be either in writing or evidenced in writing or,
in international trade or commerce, in a form which accords with practices
in that trade or commerce of which the parties are or ought to have been
aware."
(The rest of the article is not relevant).
This art. 17 replaced art. 17 of an earlier convention of the 27th
September, 1968, on Jurisdiction and the Enforcement of Judgments in
Civil and Commercial Matters. The first paragraph of this earlier art. 17
provided as follows:-
"If the parties one or more of whom is domiciled in a Contracting State,
have, by agreement in writing or by an oral agreement confirmed in
writing, agreed that a court or courts of a Contracting 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 exclusive jurisdiction."
This latter provision has been interpreted more than once by the
European Court of Justice. In Estasis Salotti v R we (case 24/76) [1976]
ECR 1831, the court held that the requirements of art. 17 must be
strictly construed and a court must examine whether a clause conferring
jurisdiction was in fact the subject of a consensus between the parties
which must be clearly and precisely demonstrated. It further held that
the mere fact that a clause conferring jurisdiction is printed among the
general conditions of one of the parties on the reverse of a contract drawn
up on the commercial paper of that party does not of itself satisfy the
requirements of art. 17 since no guarantee is thereby given that the
other party has really consented to a clause waiving the normal rules
of jurisdiction. It went on to say that if the clause is on the back of a
contract the requirement of art. 17 is fulfilled only if the contract signed
by both parties contains an express reference to those general conditions.
The validity of a jurisdiction clause in a bill of lading was examined in
Tilly Rus. v Nova (case 71/83) [1984] ECR 2417. The court observed that
where a jurisdiction clause appears in the conditions printed on a bill of
lading signed by the carrier, the requirement of an "agreement in writing"
within the meaning of art. 17 is satisfied only if the shipper has expressed
in writing his consent to the conditions containing that clause either in
the document itself or in a separate document. The mere printing of a
jurisdiction clause on the reverse of a bill of lading does not satisfy the
requirements of art. 17 since such a procedure gives no guarantee that
the other party has actually consented to the clauses derogating from
the ordinary jurisdiction rules of the Convention. (Other cases mentioned
where a printed jurisdiction clause may satisfy the requirements of art.
17, ie where there is a prior oral agreement or where the bill of lading
comes within the framework of a continuing business relationship between
the shipper and the carrier are not relevant.)
These two decisions, however, do not deal with the addition to art. 17
in the Brussels Convention which includes, in international trade and
commerce, an agreement conferring jurisdiction in a form which accords
with practices in that trade or commerce of which the parties are or ought
to have been aware.
The plaintiffs referred to the report by Professor Peter Schlosser on the
Accession Convention, 1978. By virtue of s. 4, sub-s. 2 of the Act of 1988,
this may be considered by any court when interpreting any provision of
the conventions and shall be given such weight as is appropriate in the
circumstances.
At para. 179 of that report, Professor Schlosser states that the court's
interpretation of art. 17 of the Convention does not cater adequately for
the customs and requirements of international trade. He says:-
"In particular the requirement that the other party to a contract with
anyone employing general conditions of trade has to give written
confirmation of their inclusion in the contract before any jurisdiction
clause in those conditions can be effective is unacceptable in international
trade. International trade is heavily dependant on standard conditions
which incorporate jurisdiction clauses. Nor are those conditions in many
cases unilaterally dictated by one set of interests in the market; they have
frequently been negotiated by representatives of the various interests.
Owing to the need for calculations based on constantly fluctuating market
prices, it has to be possible to conclude contracts swiftly by means of
a confirmation of order incorporating sets of conditions. These are the
factors behind the relaxation of the formal provisions for international
trade in the amended version of Article 17. This is however, as should be
clearly emphasised, only a relaxation of the formal requirements. It must
be proved that a consensus existed on the inclusion in the contract of the
general conditions of trade and the particular provisions . . ."
The remainder of para. 179 is not relevant.
In the Irish courts a case which is relevant is Hanbridge Ltd. v British
All ERospace Communications Ltd. [1993] 3 IR 342. The Supreme Court
held that the onus is on the plaintiff seeking to have a claim tried in the
jurisdiction of a contracting state other than the contracting state in which
the defendant is domiciled to establish that such claim unequivocally
comes within the exception provided for in art. 5, para. 1 of the Brussels
Convention. The principle mentioned in the Supreme Court judgment
appears to me to be equally relevant in cases concerning article 17.
It seems to me, even taking into account the relaxation of the formal
provisions for international trade in the amended version of art. 17, that
the plaintiffs have not proved a consensus on the inclusion in the contract
of the particular provision conferring jurisdiction. Mr L. was not aware
specifically of clause 3 and in my opinion it cannot be said he ought to
have been aware of it. The first defendant did not receive a copy of the
fully printed general conditions until the 1st July, 1991, which was after
the issue of the plenary summons. Therefore the plaintiffs must fail on
this ground.
The defendants also challenge the application of art. 17 on the grounds
that the plaintiffs have not proved strictly, as they were obliged to do,
that their principal place of business is in the republic of Ireland. The
defendants challenge the averment of the plaintiffs' solicitor, Mr Daniel
Hanly, to that effect. Mr L. claims in his first affidavit that (…), is a
residential premises; that Sea Point Navigation is not registered as a
business name in Ireland; that no company in Ireland exists with the
name Skye Shipping Ltd.; that they are aware that a Belgian company
tried to recover outstanding monies from Sea Point Navigation and Skye
Shipping and unsuccessfully tried to identify a place of business in Dublin.
In a later affidavit (dated the 2nd May, 1994) Mr L. points out that no
proof has been given that the management of the vessel is carried on in
Ireland. He says that L was registered in Malta and it might well be that S
Ltd. is also registered and carrying on business there. He also discovered
that there is a company called N Ltd. which was incorporated in Gibraltar
on the 28th April, 1989.
Neither the first plaintiff nor any officer of the second plaintiff has filed
an affidavit averring that the principal place of business of the plaintiffs is
the Republic of Ireland. Therefore, in my opinion, the plaintiffs have failed
to prove strictly where their principal place of business is, the evidence
of Mr Daniel Hanly being hearsay evidence. The defendants are therefore
entitled to succeed on this ground also.
Disposition
Judgment for the Defendants.