Boss Group Ltd v Boss France SA [QBD]
| Jurisdiction | England & Wales |
| Judge | Garland J. |
| Judgment Date | 12 April 1995 |
| Court | Queen's Bench Division |
| Date | 12 April 1995 |
Queen's Bench Division.
Garland J.
Adrian Briggs (instructed by Wilmer Cutler Pickering) for the plaintiff.
Thomas Lowe (instructed by D J Freeman) for Boss France.
The following cases were referred to in the judgment:
Arcado Sprl v Haviland SAECAS (Case 9/87) [1988] ECR 1539; [1989] 2 CEC 573.
Barclays Bank plc v Glasgow City CouncilELR [1993] QB 429.
Berkeley Administration Inc & Ors v McClelland & Ors (unreported, 14 February 1994, CA).
Camilla Cotton Oil Co v Granadex SAUNK [1976] 2 Ll Rep 10.
Clay, ReELR [1919] 1 Ch 66.
Compania Naviera Micro SA v Shipley International Inc (“The Parouth”)UNK [1982] 2 Ll Rep 351.
Custom Made Commercial Ltd v Stawa Metallbau GmbHECAS (Case C-288/92) [1994] ECR I-2913.
Effer SpA v KantnerECAS (Case 38/81) [1982] ECR 825.
Finnish Marine Insurance Co Ltd v Protective National Insurance CoELR [1990] 1 QB 1078.
First National Bank of Boston v Union Bank of Switzerland & OrsUNK [1990] 1 Ll Rep 32.
Guaranty Trust Co of New York v Hannay CoELR [1915] 2 KB 536.
Gulf Bank KSC v Mitsubishi Heavy Industries LtdUNK [1994] 1 Ll Rep 323.
Hazell v Hammersmith & Fulham London Borough CouncilELR [1992] 2 AC 1.
Maciej Rataj, TheUNK [1992] 2 Ll Rep 552.
Medway Packaging Ltd v Meurer Maschinen GmbH & Co KGUNK [1990] 2 Ll Rep 112.
Midland Bank plc v Laker Airways LtdELR [1986] QB 689.
Peters (Martin) Bauunternehmung GmbH v Zuid Nederlandse Aannemers VerenigingECAS (Case 34/82) [1983] ECR 987.
R v Governor of Brixton Prison, ex parte OsmanWLR [1991] 1 WLR 281.
Saipem SpA v Dredging VO2 BV (“The Volvox Hollandia”)UNK [1988] 2 Ll Rep 361.
Sennar, The (No.2)WLR [1985] 1 WLR 490.
Tatry (Owners of cargo laden on board) v Maciej Rataj (Owners)ECAS C-406/92, [1995] CLC 275; [1995] 1 CEC 273.
Conflict of laws — Jurisdiction under Brussels Convention — Negative declaration — Contract — Alleged exclusive distribution agreement between manufacturer and sole distributor in France — Distributor brought proceedings in France to enforce agreement and prevent distribution by another French company — Manufacturer sought negative declaration in England denying contract of distributorship — Whether proceedings “in matters relating to contract” where existence of contract denied — Whether manufacturer entitled to declaratory relief — Civil Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention), art. 5(1).
This was an appeal against an order setting aside a writ and dismissing an action for a declaration that the plaintiff was not contractually liable to the defendant for breach of an exclusive distribution agreement for their products.
The Boss group of companies (“old Boss”) carried on the business of manufacturing and distributing forklift trucks, marketed under the trademark “Lancer Boss”, through subsidiary companies. In 1967 the defendant company, Boss France SA, was incorporated to import and distribute Lancer Boss forklift trucks into France. For nearly 27 years Boss France had the exclusive right to distribute the forklift trucks in France on behalf of the parent company. In 1994 the group went into receivership. On 4 May 1994 the assets and goodwill of the old Boss companies and its German subsidiary were sold to the plaintiff, a newly formed company (“new Boss”) owned by a German corporation which had a French distributor (“MIC”). On 6 May Boss France was sold to a different purchaser. The main asset of Boss France was the goodwill attributed to the distribution of Lancer Boss products. On 27 and 28 May new Boss indicated that it would continue to deal with Boss France on the same terms until further notice. On 22 June new Boss purported to terminate any arrangement with Boss France, intending to distribute Lancer Boss products through MIC.
On 8 July Boss France began proceedings in the French courts for an order restraining MIC from holding itself out as a distributor of Boss equipment, ordering new Boss to deliver to Boss France all Boss equipment on the same conditions as previously existed, an inquiry as to damages and a penalty for default after the making of the orders. The president of the Tribunal de Commerce de Corbeil Essonnes made the order sought. Before the tribunal new Boss contested the jurisdiction of the court contending that English law governed the relationship of the parties. The French tribunal accepted jurisdiction. New Boss appealed to the Court of Appeal of Paris challenging the jurisdiction on the basis of art. 5(1) of the Brussels Convention 1968 since “the place of performance of the obligation in question” was England, the supply having been made there. The Court of Appeal accepted jurisdiction on the ground that “the obligation in question” was the distribution agreement and its place of performance was France. On the issue of supply the court found that new Boss was obliged to supply goods to Boss France only in respect of goods ordered before 22 June 1994.
On 28 September 1994 new Boss served a writ and statement of claim on Boss France in the High Court claiming a negative declaration that new Boss was under no obligation to supply equipment to Boss France, that there was no contract of distributorship or any other contract between the parties, or that any contracts had been lawfully terminated or fully performed by new Boss. Boss France applied successfully for the writ to be set aside under RSC, O.12, r. 8. That order was stayed pending appeal. New Boss appealed.
Held, dismissing new Boss's appeal and dismissing the action:
1. Special jurisdiction “in matters relating to contract” under art. 5(1) of the Brussels Convention, which was an exception to the general rule in art. 2 that a defendant was to be sued in the contracting state where he was domiciled, could not be established where the plaintiff denied the existence of a contract between the parties.
2. Since Boss France denied that any contract existed other than contracts for the sale and delivery of goods which had long since been performed, new-Boss could not rely on art. 5(1) to invoke the jurisdiction of the English court.
3. In view of the facts that no threat had been made to commence litigation between the parties in England, that litigation had been commenced in France, that the essential points in dispute had been formulated and ventilated and clearly identified by the Court of Appeal in Paris, the proper place for the resolution of those disputes was the French courts. Accordingly it was not appropriate to grant a negative declaration in all the circumstances.
Garland J: This is an appeal against an order made by Master Eyre on 21 March 1995 setting aside the writ and dismissing, the action in which the plaintiff sought declarations to the effect that it was not contractually liable to the defendant for breach of an exclusive distribution agreement for their products or an obligation to supply those products to the defendant.
It is necessary to set out the history of the matter at some length in order to define the issues which have arisen. For many years the Boss group of companies (which have for convenience been referred to as “old Boss”) carried on the business of manufacturing and distributing forklift trucks, associated equipment and spare parts. They did this through a number of subsidiary companies in England, Ireland and also in Germany and Austria as Steinbock Boss. The forklift trucks were marketed under the trademark “Lancer Boss”.
In 1967 the defendant company, Boss France SA, was incorporated as a subsidiary of Lancer Boss International for the purpose of importing and distributing Lancer Boss forklifts in France. Correspondence with the Minist$egrave;re de I'Économie et des Finances shows that the French government was informed that this was the purpose of the company which was incorporated on that basis. From late 1967 Boss France was the sole distributor in France of Lancer Boss forklifts whether made in England or in Germany. There were 11 sub-dealerships in France with exclusive concessions to whom Boss France guaranteed supplies and who, in return, agreed to take up minimum purchases. This exclusive right to distribute on behalf of the parent company continued for nearly 27 years. Deliveries were ex-factory both in England and in Germany although the details of delivery, credit and payment were varied from time to time, particularly when the Boss group began to experience financial problems but there was never any variation of the exclusive distribution arrangement.
In 1994 the group went into receivership. On 4 May of that year the assets and goodwill, but not the shares, of the old Boss companies and its German subsidiary, were sold to a newly formed company, the plaintiff in the action to whom it has been convenient to refer as “new Boss”. New Boss is owned by a German corporation, Jungheinrich, which has a French distributor, MIC. Under the agreement of 4 May, new Boss assumed a number of defined liabilities and engaged a number of former old Boss employees. On 6 May Boss France was sold to M Jacques Dupuy. At that time it had some 70 employees and a turnover of FfrlOOm but was loss-making. Its main asset was the goodwill attributed to the distribution of Lancer Boss products. On 26 and 27 May, new Boss indicated that it would continue to deal with Boss France on the same terms as hitherto until further notice. This was forthcoming on 22 June when new Boss purported to terminate any arrangement with Boss France. They were in fact intending to distribute Lancer Boss products through the Jungheinrich subsidiary, MIC. This was, of course, a complete disaster for Boss France who considered that under French law they would have no difficulty in establishing:
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(1) an exclusive territorial right of distribution;
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(2) a right to be supplied with Lancer Boss products; and
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(3) that new Boss were bound by the same obligations as those binding old Boss.
The third proposition is not...
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Boss Group Ltd v Boss France S.A.
...Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention), art. 5(1). This was an appeal from Garland J's dismissal of an action ([1995] CLC 786) on the ground that the proper place for the resolution of the disputes was France, where proceedings had already been commenced. The Engl......