Polskie Ratownictwo Okretowe v Rallo Vito & C SNC & another [2009] EWHC 2249 (Comm), [2009] All ER (D) 80 (Sep)
Queen’s Bench Division, Commercial Court, Hamblen J, 14 Sep 2009
The Commercial Court has given guidance on the application of Art 23 of the Brussels Convention.
Chirag Karia (instructed by Hill Dickinson) for the claimant. Henry Byam-Cook (instructed by Reed Smith LLP) for the defendants.
The first defendant was the owner of a fishing vessel and the second defendant was the vessel’s hull and machinery insurer. Both were domiciled in Italy. The dispute arose from an incident in February 2009 when the vessel encountered problems. A contract was eventually concluded between the claimant and the first defendant for the hire of the claimant’s tug to assist the first defendant’s vessel. According to the first defendant, the tug pulled the vessel in a manner contrary to instructions, which caused them loss. The claimant disputed that and brought an action seeking a declaration that it was not liable for breach of contract or duty. It served the claim form out of the jurisdiction on the defendants in Italy. The defendants applied for a declaration that the English court had no jurisdiction. They contended that according to the Brussels Regulation they were to be sued in Italy, and that England had no jurisdiction. They relied on Art 2(1) which provided that “Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State”. The claimant, referring to Art 23 of the Regulation, contended that the parties’ contract included the terms of the pro-forma TOWHIRE form which contained an English jurisdiction clause. The defendants denied the existence of any such agreement.
Hamblen J:
Article 23 of the Brussels Regulation provided: “1. If the parties, one or more of who 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 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. 2. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to “writing” ...”
As stated in Briggs and Rees Civil Jurisdiction and Judgments (2005) 4th edition at paras 2.02 to 2.07 & 2.105:
(i) The fundamental rule was that if a case fell within the Brussels Regulation, the Regulation alone allocated jurisdiction over the defendant;
(ii) There were three overriding principles of interpretation: (i) the wording of the regulation should so far as possible be given a meaning which was common and uniform across the various member states; (ii) provisions which allowed a defendant to be sued against his will in a member state other than his domicile were to be construed narrowly; (iii) the risk of inconsistent decisions should be kept to a minimum.
Since Art 23 was a provision that allowed a defendant to be sued in a member state other than that of his domicile, the defendants placed particular reliance on the second of those principles of interpretation. The burden of proof in the instant case rested on the claimant. It had to establish a good arguable case that the parties concluded the alleged jurisdictional agreement. The Privy Council had given detailed guidance as to the meaning of that standard of proof in the context of Art 23 in Bols Distilleries (t/a Bols Royal Distilleries) v Superior Yacht Services Ltd [2007] 1 All ER (Comm) 461.
In that regard, Art 23 had two elements:
First, there had to be an agreement between the parties to confer jurisdiction on the court.
Second, that agreement also had to satisfy the requirements as to formality set out in sub-paras (a), (b) or (c).
As to the need for agreement, the claimant had to show that both the parties "clearly and precisely" consented to the alleged jurisdictional agreement. In a case, such as the instant, where a party alleged that it never accepted the clause, the task of the court was to determine if there was sufficient consensus between the parties as a question of fact, without recourse to any rules of national law.
In that connection it was sufficient for a party to agree to standard terms that contained a jurisdiction clause. It was not necessary for there to have been an agreement specifically as to the jurisdiction clause.
The "real consent" required by Art 23 "exists where there is an express reference to the terms and conditions which include the jurisdiction clause. It was not necessary for there to be a specific reference to the jurisdiction clause itself, the fact that the relevant party does not have a copy of the terms and conditions or the jurisdiction clause in his possession is not relevant" (E Communications Ltd v Vertex Antennentechnik GmBh [2007] 2 All ER (Comm) 798).
His lordship turned to the facts and concluded that there had been an oral agreement between the claimant and the first defendant for English jurisdiction. Commercial parties would expect towage contracts to be concluded on standard terms, and the TOWHIRE terms had been agreed in the instant case. It had not however been agreed that the second defendant would be a hirer.
The first defendant’s application therefore failed, and that of the second defendant succeeded.
