Calyon v Wytornia Sprzetu Komunikacyjnego Pzl Swidnik SA
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE FIELD,Mr Justice Field |
| Judgment Date | 30 July 2009 |
| Neutral Citation | [2009] EWHC 1914 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 30 July 2009 |
| Docket Number | Claim No. 2008 Folio 1250 |
[2009] EWHC 1914 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mr Justice Field
Claim No. 2008 Folio 1250
Jonathan Gaisman QC and Nik Yeo (instructed by Allen & Overy LLP) for the Claimant
Andrew Thomas (instructed by Ross & Co) for the Defendant
HEARING DATES: 17 th and 18 th June 2009
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
INTRODUCTION
The contract and the jurisdiction clause in issue
This is an application by the defendant (“PZL”) for a declaration that the Court has no jurisdiction to try the claim brought against it by Calyon in Claim No. 2008 Folio 1250.
Calyon is a bank incorporated in France. It was formerly known as Credit Agricole. PZL is a company incorporated in Poland which manufactures aircraft equipment. In the course of 2008 PZL entered into a number of foreign exchange derivative transactions with Calyon in order to hedge against adverse movements in the US dollar/Polish Zloty exchange rate. One such contract was entered into over the telephone on 13 August 2008, with Mr Dariusz Frejowski acting for PZL and Mr Grzegorz Klimczyk acting for Calyon. The transaction involved was called a Strip of Ratio Forwards (“SRF). 1 A confirmation of the transaction setting out its terms was sent by Calyon's London Branch to PZL on 20 th August 2008. Those terms provided, inter alia, that: (i) there were to be bi-weekly “fixings” in the period September 2008 to May 2009; (ii) the governing law of the SRF was English law; and (iii) the transaction was subject to the provisions of 1992 Master Agreement (Multicurrency-Cross Border) as published by the International Swaps and Derivatives Association (“the ISDA Master Agreement”).
Clause 13(b) of the ISDA Master Agreement provides that if the agreement is governed by English law, each party irrevocably submits to the jurisdiction of the English courts in relation to any suit, action or proceedings relating to the agreement.
PZL did not sign the Confirmation. After permitting a number of payments out of its bank account in discharge of sums Calyon said were due under the SRF, PZL refused to make further payments alleging that it had not agreed to the terms set out in the Confirmation. In particular, PZL said that it had not agreed to bi-weekly fixings for October 2008 to May 2009. Some four months after receipt of the Confirmation, PZL first explicitly stated that the transaction was not governed by the terms of the ISDA Master Agreement.
On 1 December 2008, Calyon issued proceedings in this Court (Claim No 2008 Folio 1250) seeking: (i) a declaration that the agreement of 13 August 2008 was made on the terms contained in the Confirmation; and (ii) specific performance of those terms. On 4 December 2008, Calyon applied for permission to serve the claim out of the jurisdiction under CPR 6.33(2)(b)(iii) on the basis that PZL was a party to an agreement conferring jurisdiction on this Court within Article 23 of the Brussels I Regulation. The permission sought was granted by Master Whitaker on 11 December 2008.
On 22 December 2008, PZL started proceedings in the Commercial Division of the Regional Court in Warsaw (“the Polish proceedings”) for the recovery of the payments made to Calyon under the SRF. This claim is made on the basis that PZL
never agreed to there being bi-weekly fixings. PZL also alleges that: (i) Mr Frejowski had no authority to make an agreement with Calyon that was subject to the terms of the ISDA Master; and (ii) Calyon was in breach of the standard of diligence applicable to it as a bank in not presenting by telephone the terms of the transaction in a detailed and clear manner and not obtaining PZL's express agreement to each of the fixing dates.
Article 23(1) of the Brussels I Regulation and the applicable standard of proof
Article 23(1) provides:
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 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.
Theoretically, Article 23(1) contains two requirements: (i) an agreement (“consensus”) between the parties that disputes between them are to be settled in the courts of a Member State of the EU; and (ii) the satisfaction of the formalities specified in (a), (b) or (c).
In Estasis Salotti di Colzani Aimo e Gianmario Colzani v RÜWA Polstereimaschinen GmbH [1976] ECR 1831 the question was whether the parties to a contract had agreed for the purposes of Article 17 of the 1968 Convention on Jurisdiction and Enforcement of Judgments that the Cologne courts should have jurisdiction over disputes arising out of the contract. Printed on the back of the signed contract were the seller's general terms and conditions which included a clause stipulating that disputes should be decided in the courts of Cologne. There was no express reference to the general conditions on the face of the contract but there was a reference to previous offer letters which had referred to the seller's general conditions.
In paragraphs 6 and 7 of the judgement, the ECJ said:
6. The first paragraph of Article 17 of the Convention provides: “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 the courts of a contracting state are to have jurisdiction to settle any disputes which have arisen or which may arise in connexion with a particular legal relationship, that court or those courts shall have exclusive jurisdiction'.
7. The way in which that provision is to be applied must be interpreted in the light of the effect of the conferment of jurisdiction by consent, which is to exclude both the jurisdiction determined by the general principle laid down in article 2 and the special jurisdictions provided for in Articles 5 and 6 of the Convention.
In view of the consequences that such an option may have on the position of the parties to the action, the requirements set out in Article 17 governing the validity of clauses conferring jurisdiction must be strictly construed.
By making such validity 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 the clause conferring jurisdiction upon it was in fact the subject of a consensus between the parties, which must be clearly and precisely demonstrated.
The purpose of the formal requirements imposed by article 17 is to ensure that the consensus between the parties is in fact established.
The ECJ went on to hold that the requirement of writing under the first paragraph of Article 17 of the Convention is fulfilled: (i) where a clause conferring jurisdiction is included among the general conditions of one of the parties printed on the back of a contract, only if the contract signed by both parties contains an express reference to those general conditions; or (ii) where the contract refers to a prior written offer which refers to general conditions including a jurisdiction clause, only if the express reference can be checked by a party exercising reasonable care and the general conditions (including the jurisdiction clause) had been communicated to the other party with the prior offer.
It is clear from Salotti that the purpose of establishing paragraphs (a), (b) and (c) of Article 23 is to ensure that the consensus between the parties is in fact established. Further, the establishment of (b) and/or (c) gives rise to a presumption of actual consensus, see Mainschiffahrts-Genossenschaft eG (MSG) v Les Gravières Rhénanes Sarl ( Case C-106/95); [1997] QB 731 (ECJ), at p. 755 at para 19; The “Kribi” [2001] 1 Lloyd's Law Reports 76, at para 64.
It is common ground that (i) the approach of the ECJ in Estasis Salotti applies to Article 23(1) of the Brussels I Regulation; (ii) it is for Calyon to demonstrate clearly and precisely to the applicable standard of proof that the jurisdiction clause contained in Clause 13(b) of the ISDA Master was in fact the subject of a consensus between the parties; and (iii) “consensus” for the purposes of Article 23 has an autonomous meaning.
The applicable standard of proof is a “good arguable case”, which means that Calyon must show that it has a much better argument than PZL that, on the material available, the requirements of Article 23 (1) are met and it can be established clearly and precisely that Clause 13 (b) was the subject of consensus between the parties: see Bols Distilleries BV (trading as Bols Royal Distilleries) and another v Superior Yacht Services Ltd [2007] 1 WLR 12 where at para 28 the Privy Council endorsed Waller LJ's approach in Canada Trust Co v Stolzenberg (No 2) [1998] 1 WLR 547 at 555.
Mr Gaisman QC for Calyon submitted that where there was a...
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