THE SUPREME COURT DAN O CONNOR AND DAN O CONNOR JOINERY LIMITED PLAINTIFFS / APPELLANTS AND AND NATIONAL IRISH INVESTMENT BANK LIMITED DEFENDANT
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1 THE SUPREME COURT Denham J. Geoghegan J. Fennelly J. 307/ No. 7690P BETWEEN DAN O CONNOR AND DAN O CONNOR JOINERY LIMITED PLAINTIFFS / APPELLANTS AND MASTERWOOD (UK) LIMITED DEFENDANT MASTERWOOD SpA DEFENDANT/RESPONDENT AND NATIONAL IRISH INVESTMENT BANK LIMITED DEFENDANT JUDGMENT of Mr. Justice Fennelly delivered the 1 st day of July, 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
2 2 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 secondnamed 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:
3 3 "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 27 th 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 21 st 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."
4 4 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 any 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).
5 5 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
6 6 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 , 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.
7 7 21. For these reasons, I would dismiss the appeal and affirm the order of the High Court.
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