The Gazette 1985

SEPTEMBER1985

GAZETTE

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. 23 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. 27 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 28 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". 29 And, the Court held that Article 18 applied even where there is an agreement designating a particular court to have juris- 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. 30 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. 31 And, where related actions are brought in the courts of different Contracting States, Article 22 provides that 335 diction over the dispute. Refusal of Jurisdiction