Cube Lighting and Industrial Design Ltd v Afcon Electra Romania Sa
| Jurisdiction | England & Wales |
| Judgment Date | 10 October 2011 |
| Neutral Citation | [2011] EWHC 2565 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No: HC11C00303 |
| Date | 10 October 2011 |
[2011] EWHC 2565 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice,
Strand
London,
WC2A 2LL
Mr Edward Bartley Jones Q.C (Sitting as a Deputy High Court Judge)
Claim No: HC11C00303
Miss Camilla Bingham (instructed by SJ Berwin LLP, 10 Queen Street Place, London EC4R 1BE) for the Defendant
Mr Christopher Boardman (instructed by Darlingtons Solicitors, 48 High Street, Edgware HA8 7EQ) for the Claimant
Hearing Date: Friday 22 July 2011.
INTRODUCTION
The issue before me is whether the English courts have jurisdiction to hear this claim under and in accordance with the terms of Council Regulation (EC) No. 44/2001 of 22 December 2000 ("the Regulation").
The claim was commenced by Claim Form issued on 14 February 2011 out of the High Court of Justice, Chancery Division. The claimant is Cube Lighting and Industrial Design Limited ("Cube"). Cube is an English company undoubtedly domiciled in England and Wales under the terms of Article 60 of the Regulation. The defendant is Afcon Electra Romania SA ("Afcon"). Afcon is a Romanian company and it is common ground that, under Article 60, it is domiciled in Romania.
It is also common ground that the claim is a "civil and commercial matter" within the meaning of Article 1.1 of the Regulation.
Article 2.1 of the Regulation provides (subject to the other provisions of the Regulation) that a person domiciled in a Member State shall be sued in the courts of that Member State (in this case Romania). This domiciliary rule has been expressed as being the "basic philosophy" of the 1968 Brussels Convention and such a description is equally applicable to the Regulation which has superceded the Convention. As Henry LJ remarked in Knauf v. Peters [2002] 1 Lloyd's Rep 199 at [49] :—
"It is not merely that a claimant is entitled to sue his defendant where he is domiciled ; the defendant is entitled to be sued there".
Cube's contentions as to why this basic domiciliary rule should be displaced have varied from time to time. It will be necessary for me to identify how Cube's contentions have changed and how the evidence filed on behalf of Cube has developed. But as advanced at the hearing before me Cube's case was that this was a case falling within Article 23 of the Regulation. The basic domiciliary rule was displaced because Cube and Afcon had agreed that the courts of England and Wales would have jurisdiction over this matter and the requisite formalities (as required by Article 23) had been complied with.
THE BACKGROUND FACTS
Afcon was the sub-contractor retained to effect certain electrical and lighting works as part of the fitting out of a shopping mall which was being built at Cotroceni Park, Bucharest. The mall was scheduled for opening in October 2009.
The Particulars of Claim describe Cube as carrying on business in the design, construction and supply of lights and light fittings. Cube is said not to involve itself in the installation of lights and light fittings, save in respect of cold cathode lamps which it did install.
Negotiations commenced between Afcon and Cube for the supply of various lights and light fittings in the Bucharest mall. Clearly those negotiations contemplated, at least at one point, the installation by Cube of cold cathode lamps (see the terms of Contract "A" to which I shall refer). Ultimately, however, I am somewhat unclear as to how much installation work Cube actually undertook. Nothing turns on this. It is quite clear that the vast bulk of Cube's present claims against Afcon relate to the purchase costs of lights and light fittings supplied by Cube to Afcon and delivered to Bucharest.
A meeting occurred in Bucharest on 29 April 2009 between (1) Mr Simon Rosenberg (a director of Cube) and a Mr David Clarke on behalf of Cube and (2) a Mr Mordechai Kremer and a Mr Avi Ophir on behalf of Afcon. Mr Kremer was, at the time, the general manager of Afcon and it is clear that he would have had authority to enter into contracts on Afcon's behalf. Mr Ophir was Afcon's Electrical Projects Manager.
On 28 April 2009 Mr Rosenberg e-mailed to Mr Kremer and Mr Ophir three draft contracts for discussion "in tomorrow's meeting".
The first of those draft contracts (Contract "A") was for the manufacture, delivery and installation of cold cathode lamps at the mall. It was a fixed price contract – the contract price being €171,758. The goods/works were identified by reference to Quotation 13482 issued by Cube on 8 April 2009. Of particular note in Contract "A" were the following clauses :—
(1) clause 5.1 provided for Cube to give a warranty for a term of 2 years from the date of completion ; and
(2) clause 6 provided for payment. 50% of the contract price (€85,879) was to be paid within 7 days of the date of the signing of the contract. 40% (€68,703) was payable on sign off by Afcon of goods at Cube's bonded warehouse facility. And the remaining 10% was to be released within 60 days from "Acceptance" as defined.
Clause 12.1 of Contract "A" was in the following terms :—
"This contract shall be Governed by and construed in accordance with English Law and any proceeding [sic] litigation will be undertaken within the United Kingdom".
Clause 13.1 of Contract "A" contained an arbitration clause. This provided that "The place of disputes shall be in the UK the language of the dispute shall be the English language". In addition clause 13.3 provided as follows :—
"In the event that the dispute is not capable of being referred to arbitration, each of the parties hereto irrevocably agrees that the courts of the United Kingdom are to have jurisdiction to hear and determine any such suit, action or proceeding and to settle any such disputes which may arise out of or in connection with this contract and, for such purposes, irrevocably submits to the jurisdiction of such courts".
Contracts "B" and "C" were in broadly similar terms. Both provided for identical warranty and payment terms as Contract "A" and both contained clauses identical to clauses 12.1, 13.1 and 13.3 of Contract "A". Contract "B" was a fixed price contract in the sum of €128,638 based on Cube's Quotation 13481 dated 20 March 2009 for the manufacture, delivery and supervision of the installation of Type "K" special luminaries. Contract "C" was a fixed price contract in the sum of €708,938 based on Cube's Quotation 13483 dated 27 April 2009 for the manufacture, delivery and supervision of the installation of standard and special luminaries in the mall.
Copies of these three draft Contracts are before me. In clause 1 of each the company registration number and Romanian VAT registration number of Afcon has not been completed. But each bear the signature of Mr Rosenberg and the date 29 April 2009. There was a space for Mr Kremer to sign under an indent which started with the heading " BUYER" and which then set out Afcon's name and details with, at the bottom, the words "Mr Moti Kremer (General Manager)". Mr Kremer signed none of the three Contracts.
Miss Bingham (who appears for Afcon) did not accept that Mr Rosenberg's signature went on to any of these Contracts on the 29 April 2009. Her submission was that, in the context of what subsequently occurred, I should regard Mr Rosenberg's signature as having been appended to these three Contracts on, or after, 31 March 2011. This was part of the submission she made in paragraph 30 of her written Skeleton Argument namely that Cube's contentions were a "crude, cynical and misguided attempt to hoodwink the English courts into accepting jurisdiction". Whilst Miss Bingham is justified in criticising the way that Cube's case has developed before the English courts, I can see no justification whatsoever for reaching the conclusion that in a cynical, indeed fraudulent, attempt to mislead me Mr Rosenberg appended his signature to these three draft contacts after 31 March 2011. I can see a whole gamut of factual possibilities as to how Mr Rosenberg's signature went on to all three Contracts on or about 29 April 2009 which are consistent with (a) Afcon never having entered into a contractual relationship with Cube on the terms of the three draft Contracts and (b) my conclusions below. Indeed, I fail entirely to see what evidence there is in support of any suggestion that Mr Rosenberg signed and dated these three Contracts on or after 31 March 2011, save for some generalised suspicion arising out of the manner in which Cube has conducted its case.
Mr Boardman, in his oral submissions to me on behalf of Cube, did not contend that Afcon had entered into Contracts "A", "B" and "C" according to all their terms. His point on Article 23, as will be seen below, was far more subtle – namely that the parties had merely entered into a jurisdiction agreement – on the terms set out in clauses 12 and 13 of Contracts "A", "B" and "C"—which would govern any subsequent contracts which they entered into for the purchase or installation of light fittings at the mall.
Whilst I am conscious that on a jurisdiction issue such as the one before me I should refrain, so far as possible, from expressing any concluded view I think I can, in the light of Mr Boardman's submissions, say that Mr Boardman was very wise to accept that Contracts "A", "B" and "C" were not entered into as such. Thus, and by way of non-exhaustive illustration, not merely do the three Contracts not bear any signature on behalf of Afcon but also :—
(1) virtually immediately following his return to England on 30 April 2009 Mr Rosenberg e-mailed Mr Kremer and Mr Ophir thanking them for their hospitality and recording that it was unfortunate that "the meeting failed to resolve the issues we believed we were there to discuss". The first of those issues was then identified in...
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