The Gazette 1985

GAZETTE

SEPTEMBER1985

Jurisdiction by Consent

Article 17 deals with choice of jurisdiction agreements.

Important amendments were made to Article 17 in the

1978 Convention and there have been a number of

important judgements of the Court of Justice dealing

with its interpretations.

Article 17, as amended, provides that if the parties,

one or more of whom is domiciled in a Contracting

State, have agreed that a court or courts of a Contract-

ing State is to have jurisdiction to settle disputes arising

in connection with a particular legal relationship that

court will have exclusive jurisdiction. The agreement

must either be in writing or oral and evidenced in writing

or (and this was introduced by the 1978 Convention) in

a form which accords with the practices of international

trade or commerce of which the parties are or ought to

have been aware.

Mention should be made here to the relationship

between a choice of law clause and a choice of juris-

diction clause. The practice of Irish courts has been to

accept jurisdiction where an agreement contains a clause

stipulating Irish Law as the law to govern the agreement.

They will no longer be able to do so, but a transitional

matter in providing in the form of Article 35 of the 1978

Convention which states that Irish and U.K. courts will

retain their right to exercise jurisdiction where parties to

a contract have agreed in writing, before the 1978 Con-

vention comes into force, that Irish and U.K. law would

govern the contract.

Another amendment introduced by the 1978 Conven-

tion relates to trusts and provides that the courts of a

Contracting State on which jurisdiction has been con-

ferred by a trust instrument will have exclusive juris-

diction in any proceedings brought against a settlor,

trustee or beneficiary if relations between these persons

or their rights or obligations under the trust are involved.

A choice of jurisdiction clause will be effective if

contrary to the provisions of Articles 12 or 15 relating to

insurance or consumer contracts or if it purports to oust

the exclusive jurisdiction provided for in Article 16.

Finally, Article 17 provides that if the agreement con-

ferring jurisdiction was concluded for the benefit of

only one of the parties, that party retains the right to

bring proceedings in any court which has jurisdiction

under the Convention.

The case of

Meeth

-v-

GlacetaP

dealt with the

question of more than one court being chosen and the

risk of such a choice giving rise to the courts of different

Member States having jurisdiction respectively over a

claim and a counterclaim. The agreement in question

provided that each party could only be sued in the

country of his domicile. On the basis of this agreement

the German court held that the defendant could not

claim a set off in the German court as the plaintiff's

domicile was in France. The Court of Justice held that

Article 17 did not seek to exclude the right of choosing

more than one court. Equally, however, it could not be

interpreted as preventing the court seized of a claim, in

circumstances such as those in this case, from taking

into account a set off claimed by a defendant.

The

case of

Sanicentral

-v-

Collin,

mentioned above, dealt

with a contract of employment which had been entered

into and terminated prior to the coming into force of the

Convention, but in relation to which proceedings were

issued after its coming into force. The Court held that a

choice of jurisdiction clause had no legal effect so long

as no proceedings had been commenced and it was

therefore the date of the institution of the proceedings

which was relevant in deciding whether the Convention

applied. Case 150/80

decided that Article 17 con-

tained all the formal requirements necessary to render

a choice of jurisdiction clause valid and effective

and national rules could not lay down further formal

requirements. In this case Belgian law provided that a

contract of employment was valid because it was not

also in Flemish. The Court held that it was not invalid

for the purpose of the Convention as the other require-

ments of Article 17 had been complied with.

Entry of Appearance

Article 18 clarifies the position about the effect, from

the point of view of jurisdiction, of the entering of an

appearnace. It provides that, apart from jurisdiction

derived from the other provisions of the Convention, a

court of a Contracting State before which a defendant

enters an appearance will have jurisdiction. However,

Article 18 goes on to specifically provide that this rule

will not apply where the appearance is entered solely for

the purpose of contesting that court's jurisdiction or

where another court has exclusive jurisdiction under

Article 16.

Case 150/80, mentioned above, is important in that it

dealt with the question whether the rule on jurisdiction

in Article 18 is applicable where the defendant has not

only contested jurisdiction but has also made submissions

on the substance of the action. The Court held that a

challenge to jurisdiction will be valid notwithstanding a

challenge on the substance so long as "the plaintiff and

the court seized of the matter are able to ascertain at the

time of the defendant's first Defence that it is intended

to contest the jurisdiction of the court".

And, the

Court held that Article 18 applied even where there is an

agreement designating a particular court to have juris-

diction over the dispute.

Refusal of Jurisdiction

Article 19 obliges a court of a Contracting State to

declare, regardless of whether the point has been pleaded,

that it has no jurisdiction in a matter before it where the

courts of another Contracting State have exclusive juris-

diction by virtue of Article 16. And, where a defendant

is sued in a Contracting State which is not that of his

domicile the court seized of the matter must declare, of

its own motion, that it has no jurisdiction if the defend-

ant has not entered an appearance and if jurisdiction

cannot be derived from some other provision of the

Convention.

Lis Pendens

Only the court first seized fo the matter may accept

jurisdiction where proceedings involving the same cause

of action and between the same parties are brought in

the courts of different Contracting States. Any other

court must, of its own motion, decline jurisdiction

except where jurisdiction is being contested in the first

court in which case proceedings may be stayed.

And,

where related actions are brought in the courts of

different Contracting States, Article 22 provides that

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