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	England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Standard Bank London Ltd. v Apostolakis & Anor [2001] EWHC 493 (Comm) (09 February 2001) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2001/493.html Cite as: [2002] CLC 939, [2001] Lloyd's Rep Bank 240, [2001] EWHC 493 (Comm), [2002] CLC 933

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IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		9th February 2001

Introduction

1. On the 27^th August 1997 the defendants, who are married and are both resident in Greece, entered into a written agreement with the claimant entitled “Terms and Conditions for Foreign Exchange in Precious Metals Margin Trading” which agreement incorporated the claimant’s standard terms of business. Pursuant to the agreement the defendants had by 13^th March 1998 entered into twenty-eight transactions of which some twelve remained open. The transactions were by way of forward purchases of ECU’s for Greek drachma. On that day the drachma was devalued. The defendants had earlier deposited US $1.1 million with the claimants (SBL) and this margin was applied by SBL in settlement of the amount said to be owed by the defendants on the close out of the remaining positions.
2. Upon 18^th December 1998 the defendants started proceedings against the claimant in Athens asserting that the claimant’s conduct was unlawful, arbitrary and in breach of contract. Shortly before service of those proceedings in December 1999, the claimant commenced proceedings in this jurisdiction seeking an injunction restraining the defendants from continuing with the proceedings, which they instituted before the multi-member first instance court in Athens. The basis of this latter claim was that the defendants had agreed to submit any claims under the relevant contract to the exclusive jurisdiction of the English court.
3. In response to these proceedings the defendants raised four issues:-

a. On a proper construction of the agreement, there was no exclusive jurisdiction clause and thus Article 17 of the Brussels Convention was inapplicable.

b. The agreement was a consumer contract within the meaning of Article 13 of the Brussels Convention.

c. The agreement was preceded by advertising and/or specific invitation addressed to the defendants and thus, as the defendants took the steps necessary for the conclusion of the agreement in the state of their domicile, by virtue of Articles 13, 14 and 15 of the Brussels Convention, the defendants are entitled to bring proceedings against the claimants in Greece.

d. The jurisdiction agreement was an unfair contract term pursuant to the Unfair Terms in Consumer Contract Regulations 1994 and/or 1999.

4. The first two of these issues have been determined by Longmore J in a judgment handed down on the 19^th January 2000. He held (although his order is subject to appeal):-

a. On a proper construction of the agreement, there was an exclusive jurisdiction clause and that Article 17 of the Brussels Convention was thus applicable;

b. However, the agreement was a consumer contract within the meaning of Article 13 of the Brussels Convention (and the Regulations).

It follows that the two further issues c and d now arise for a decision.

Dramatis personae

5. Standard Bank London Limited (“SBL”), the claimant, is the wholly owned subsidiary of Standard Bank Investment Corporation Limited of South Africa. It constitutes the merchant banking arm of the group. It has both a foreign exchange desk and a money market desk. On 21st March 1997 the claimant entered into an Introducing Agreement with Eurofinance S.A. (“EF”) whereby EF were to introduce to SBL clients who might wish to enter into foreign exchange transactions.
6. EF was a Greek firm of financial brokers based in Athens. The chairman was Mr Panagiotis Konstantatos. He gave evidence at the trial on behalf of the claimant. Another partner in EF was Mr Kalliopi Kalkopoulos. Mr Kalkopoulos also worked for an insurance and investment group called Inter American. A colleague of his at Inter American was Mr Alexandros Mitzirikis. The defendants were investment clients of Mr Mitzirikis.
7. The first defendant is a Greek engineer and property developer and the second defendant is his wife, who is a Greek law lawyer, practising in family law. In July 1997 Mr Mitzirikis introduced the first defendant to Mr Konstantatos. Both defendants gave evidence and Mr Mitzirikis was also called on their behalf.

Summary of background

8. Mr Apostolakis and his wife were well off. Between them they had substantial deposits in foreign exchange mainly with Citibank in London and with BCI in Geneva. Their overall portfolio was undoubtedly conservative, with other investments being primarily in bonds and mutual funds.
9. Mr Mitzirikis advised the defendants from time to time on their financial affairs and was anxious to encourage them to place part of their portfolio on a more speculative basis. He had in mind that something in the region of 20% of their liquid assets should be repositioned in this way. No doubt as a result of his contact with Mr Kalkopoulos, Mr Mitzirikis learnt of the potential for more speculative financial products that might be available through the offices of EF and accordingly he arranged for Mr Konstantatos to meet Mr Apostolakis at the latter’s office.
10. In his evidence Mr Konstantatos described how EF was contracted as an introducer of business not only to the claimants, but also to two other financial institutions, IFX (foreign exchange brokers in London) and Commerz Bank based in Geneva. One of the more popular packages made available by these institutions centred on the difference between the interest rate payable on the ECU and the rate payable on the Greek Drachma. The investor would borrow ECUs at the lower rates of interest to buy therewith drachma’s for deposit. The primary risk associated with this procedure was any devaluation of the Drachma. Mr Konstantatos described that he had a number of clients who had made such an investment through IFX and a few with Commerz Bank.
11. There was some dispute about even the date of the initial meeting between Mr Konstantatos and Mr Apostalakis. There was an even greater difference of recollection as to what took place at this initial meeting. Since the resolution of that factual dispute is of considerable significance in the context of the issues that I have to decide, it is desirable that I set out the competing accounts in some detail. But for the moment I will merely set the scene by describing the broad nature of the competing versions of the story.
12. It was Mr Konstantatos’ recollection that the initial meeting was relatively short and introductory in form, that no documents relating to SBL were handed over and that it was only over a series of subsequent meetings, during which Mr Konstantatos described the kind of financial packages that might be available from not merely SBL but also Commerz Bank and IXL, that eventually Mr Apostolakis plumped for SBL.
13. In contrast the account of Mr Apostolakis supported by Mr Mitzirikis was to the effect that the first meeting was the only one of substance, that only the financial products available from SBL were discussed and that all the relevant documentation was duly handed over to Mr Apostalakis at that stage.

Introducing agreement

14. On being signed up as an “introducer” by the claimant, EF was furnished with various documents. So far as general documentation was concerned, EF was provided with copies of the “Report and Accounts” for the claimant group for the financial year 1996, together with copies of a brochure entitled “Directory of Services”. It was common ground that the first defendant was indeed provided with copies of these documents, albeit there was some controversy as to when. EF was also provided with blank forms of contract for execution following the introduction of a new customer. These forms included the following:

a. A standard letter containing the “terms of business” for the conduct of investment by the claimants. This contained an English exclusive jurisdiction clause.

b. A standard form document containing the “Terms and conditions of foreign exchange and precious metals margin trading” which included a non-exclusive English jurisdiction clause.

c. A “Power of Attorney and Indemnity”.

d. A “Communications Indemnity Agreement”.

All these four documents were for execution by the introduced client. (There was a further form entitled “Client Questionnaire” which was intended for completion by EF on the instruction of the introduced client.)

15. Again there was some dispute as to the stage at which copies of these forms of agreement were handed to the defendants, but what is not in issue is that on 27th August 1997 the relevant forms were duly executed by the defendants and were then forwarded to the claimants by Mr Konstantatos under cover of a letter which read: “Please be advised for the documents of a new account in the name of E. & S. Apostolakis”.
16. Accompanying these forms was a completed Client Questionnaire. This contained the various entries by way of indication of the defendants’ wealth e.g.

a. “What is your approximate gross annual income from employment or pensions?” In respect of which the box “£250,000/£500,000” was ticked.

b. “What is your gross annual income from all investments including deposits?”

In respect of which the box “more than £100,000” was ticked.

c. “What is the approximate value of your assets (including savings) but excluding the value of your home?”

Answer “£3 million”.

4. “How much do you invest each year?”

Answer “£400,000”.

As I have already indicated, this document was not signed by the first defendant, but it was stamped and signed by Mr Konstantatos on behalf of EF, the entries being based on information furnished by the first defendant.

17. On receipt of the documents in London, a “credit application” was prepared, setting out some of the details referred to above. The application appears to have been prepared (and recommended) by Mr Patrick Chalmers and initialled by three other members of the Bank on 29^th August. There is however a later initialled endorsement dated 7th September to the effect that the maximum term should be three months.
18. On the 10th September Mr Chalmers wrote a memorandum to the following effect:

“Apostolakis is keen to start trading soon through Eurofinance Athens. He is aware that his account is on hold for the moment, as we are not in a position to classify him as an expert for SFA purposes. He has said that he would like to send us a signed declaration along the following lines to give us the comfort we need: he has traded FX before with Citibank assets on an unmargined basis. He is aware of the risks involved in margined trading and that the entire amount of his deposit could be at risk. He has traded in other financial markets (Greek and International Bonds and Equities). He is prepared to operate through Eurofinance Athens and has signed a Power of Attorney to that effect. He would not hold a bank responsible for losses incurred on trading decisions made by him or Eurofinance on his behalf. Is there anything else we need to include?”

19. This memorandum was addressed to another member of the bank, Craig Greaves-Lord. I believe it to be common ground that the proposed form of declaration was in fact the work of Mr Konstantatos. The very next day, September 11th, Mr Konstantatos forwarded to Mr Chalmers “the additional document you requested”. This was in the form of a letter signed by Mr Apostolakis broadly following the lines of the proposal contained in the earlier memorandum:-

“Dear Sirs, I take this opportunity to inform you that my previous experience in foreign exchange is with Citibank, Athens, involving physical trading without the use of leverage and I am totally aware of the risks and rewards involved using leverage in the foreign exchange market.

My areas of experience also involves private banking, meaning physical trading in Greek and International bonds and also Greek and International equities through individual hands and/or mutual funds. Taking the above into consideration, I am happy for Eurofinance S.A to manage my account and enter trades for my account and risk.”

20. The initial margin call as foreshadowed in the questionnaire was for US $500,000, which was duly deposited on 15th September 1997. By 30th October 1997 a total of twenty-eight positions had already been opened on behalf of the defendant. Some sixteen had been closed, but twelve remained open to a total of 6.1 million ECU. However by this date the forward exchange rate as between Drachma ECU of 322 was already materially lower than the actual rate. In the result the claimants sought an additional margin payment of $600,000 failing which they threatened that they would close out the defendants’ remaining positions. The defendants made the appropriate arrangements and the additional margin requirement was remitted on 4th November.
21. However on Sunday 15th March 1998 the Bank of Greece announced a devaluation of the Drachma and the following day the claimants closed out the remaining open positions at a rate of 352, a decision that is challenged by the defendants. As already recorded, proceedings were instituted on the defendants’ behalf in the first instance court in Athens on 18th December 1998.
22. The only other document of materiality is a letter dated 12th November 1999 written shortly after the institution of the present English proceedings. The letter was signed by Mr Konstantatos, although apparently drafted by the legal representatives of the claimant in accord with their understanding of his instructions. The relevant part of the letter reads as follows:

“I am aware of legal proceedings, which refer to the role of Eurofinance in introducing Dimitrios and Stiliani Apostolakis to Standard Bank London Ltd (SBL). At all relevant times, I was a director of Eurofinance, representing Mr and Mrs Apostolakis in their relationship with SBL.

I would like to make a number of points in relation to the background of the proceedings as follows:

1. I have known Mr and Mrs Apostolakis for a number of years. Mr Apostolakis is a well-known civil engineer involved in real estate development and Mrs Apostolakis is an experienced Greek lawyer, practising in Athens.

2. Prior to entering into a relationship with SBL, Mr Apostolakis was experienced in Foreign Exchange trading and he understood the risks associated with leveraged transactions. Mr and Mrs Apostolakis had relationships with a number of Greek and foreign banks and conducted foreign exchange and other business with them. These other banks included Citibank Athens, Alpha Credit Bank and BCI (Suisse) in Zurich, Switzerland. I have also repeatedly have explained to him the dangers of the GRD market and specifically the danger of devaluation which is exactly what happened. I had many conversations with Mr and Mrs Apostolakis regarding the proposed transactions with SBL. They stated that they fully understood the nature of the proposed transactions including the risks of loss. This is reinforced by a letter which Mr Apostolakis sent to you confirming that he had experience in trading foreign exchange and fully understood the risks and regards in using leverage in the foreign exchange market.

3. Eurofinance did not advertise nor represent SBL’s business in any way in Greece. At the request of Mr and Mrs Apostolakis, I informed them about the execution services provided by various banks and finance institutions, including SBL.

4. On 27 August 1997, Mr and Mrs Apostolakis attended at my office to sign the SBL documentation. I presented them with the documentation and went through it with them. They stated that they understood the language. Their command of English is excellent…

Mr Konstantatos’ evidence

23. In seeking to reconstruct the manner in which Mr and Mrs Apostolakis became clients, Mr Konstantatos made reference to his diary for 1997. This had an entry for Mr Mitzirikis on 25th July, an entry for Mr Apostolakis on 29th July, an entry for the 30th July of “prepare Apostolakis” and a further reference to Mr Apostolakis on the 1^st August. The only other reference to Mr Apostolakis was on the 27^th August being the date on which the various contractual documents were signed. Against this background Mr Konstantatos contended that he had met with Mr Mitzirikis alone on the 25^th July. At that meeting. Mr Mitzirikis had informed him that he had a client who was interested to meet Mr Konstantatos in order to discuss the possibility of entering into a transaction of the kind described above. Based on his diary entries, he considered that he met up with both Mr Apostolakis and Mr Mitzirikis on the 29^th July.
24. In his statement Mr Konstantatos described the joint meeting in the following way:

“After initial introductions Mr Apostolakis mentioned that Mr Mitzirikis had talked to him about the type of foreign exchange trades referred to above, and asked me to elaborate upon the current situation in relation to the Greek drachma and to explain in more detail about such trades. At the end of the meeting, Apostolakis said he wished to continue our discussions and was clearly very interested in engaging in the foreign exchange trades. I left him with copies of certain articles from the Greek Financial Press in relation to such trades.”

25. In his oral evidence he put greater emphasis on the meeting having been entirely introductory and by way of “acquaintance. He rejected the proposition that the initial meeting with Mr Apostolakis descended to detail with specific discussion of financial products of the claimants, let alone that he had recommended that Mr Apostolakis should invest in any such product. He denied that he ever suggested to Mr Apostolakis that EF were “representatives” of the claimant. He also denied that the claimant’s directory of services or balance sheet, or any copies of the draft forms of contract, were handed over at the meeting.
26. The only document that he accepted had been handed over at the time of the meeting on the 29^th July was a business card, which as Mr Kostantatos recollected it, simply had EF’s address and telephone number on it. He accepted that at some earlier stage there had been a business card that carried the name of both the claimant and Commerz Bank as well. But it was his evidence that the claimant, having heard about it, called upon him to cease using it. He had, he said, obeyed that instruction, and no such card had been furnished to Mr Apostolakis.
27. Again relying upon his diary, Mr Konstantatos thought that there was a further meeting with Mr Apostolakis on the 1^st August. He suggested that the reference to “prepare” on the 30^th July was consistent with him having prepared copies of the relevant contracts for presentation to Mr Apostolakis at that second meeting. But it was also his evidence that he had discussed with Mr Apostolakis the possibility of investing in the other two institutions with whom EF had a relationship and only thereafter, in response to Mr Apostolakis’ request for further information about the claimant, did he furnished their annual report and directory of services.
28. The sequence of these events remained unclear. Furthermore Mr Konstantatos in his statement asserted that “I met and spoke with Apostolakis several times over the next month or so”. Consistent with this Mr Konstantatos was not minded to accept that there had been no meetings or even telephone conversations in the period between the 2^nd and 25^th August inclusive. However, it emerged from Mr Apostolakis’ diary (which was produced just before the trial) that Mr Apostolakis was on holiday out of Athens during this period (and indeed in Egypt as from the 15^th August).
29. A further oddity arose from Mr Konstantatos’ second witness statement. Having been reminded of the discovery in the files of EF of some translations of the relevant forms, he suggested that copies of the translations had been delivered to the first defendant at some stage prior “to his departure on holiday which I recall was some two or three weeks after my first meeting with Mr Apostolakis on the 29^th July”. This at least was consistent with the date of formal certification of the translations on the 11^th August. But when faced with the difficulty of reconciling his account with Mr Apostalakis’ holiday arrangements, Mr Konstantatos could only assert that there would have been no point in obtaining the translations if he had not in fact given copies to the defendants.

Mr Apostalakis’ evidence

30. Both the broad outline and the detail of Mr Apostolakis’ recollection of the discussions between himself and Mr Konstantatos in July and August of 1997 were very different. He agreed that it was Mitzirikis who introduced him to Mr Konstantatos. Mr Mitzirikis had been anxious that Mr Konstantatos should describe to Mr Apostolakis the nature of a financial package, which he felt, would be of interest. The meeting, as he remembered it, took place on the 25th July at his office with both Mr Mitzirikis and Mr Konstantatos present. His recollection was that Mr Konstantatos described the principles of margin or leverage trading in a simple way and elaborated on how advantage might be taken of the difference between the interest rate payable on ECU as compared with the interest rate payable on Drachma. He asserted that Mr Konstantatos gave the firm advice that the existing exchange rate between the Drachma and ECU would be maintained for a minimum of one year.
31. He also asserted that Mr Konstantatos said in terms that his company, EF, represented SBL in Greece. By way of apparent confirmation of that Mr Apostolakis said that Mr Konstantatos gave him a business card on which was printed the name of SBL and that thereafter during the course of the discussions handed over publicity material with reference to SBL. Indeed Mr Apostolakis’ recollection was that no other bank but SBL was mentioned during the course of this meeting that lasted something like one and a half-hours. At the end of the meeting Mr Apostolakis said that Mr Konstantatos left the standard forms of contract with him inviting Mr Apostolakis and his wife to sign them. Mr Apostolakis also said that since the forms were written in English, he then asked Mr Konstantatos to arrange for translation to be made available which Mr Konstantatos agreed to do.
32. In short, far from being an introductory form of meeting over a short period of time, it was Mr Apostolakis’ evidence that it was in effect the only substantive meeting between Mr Konstantatos and Mr Apostolakis, albeit there may have been subsequent telephone conversations. His office diary confirmed that the office was closed between the 2nd and 20th August and thus that no meetings took place there in that period. His own diary confirmed that he was on holiday until the 25th. On his return he said that Mr Konstantatos telephoned him and urged him to sign the forms that he had been given on the grounds that it was particularly important to take advantage of the market situation at that time.
33. Mr Apostolakis and his wife duly signed the forms on 27th August without any further discussion with Mr Konstantos and then handed them over. Mr Apostolakis contended that at no stage were any translations of the relevant documents afforded to him. As regards the letter of the 11th September, which was drafted by Mr Konstantatos and executed by Mr Apostolakis, Mr Apostolakis was minded to suggest that he only signed because he was assured by Mr Konstantatos that it was in a standard form. He had not understood it as he did not speak English and having now understood what it said, felt that it misrepresented his appreciation of the nature of the risks involved in the proposed transaction.
34. Mr Mitzirikis’ evidence was broadly corroborative of that of Mr Apostolakis. Mrs Apostolakis was also called to give evidence but, having not been involved in any of the discussions, was obviously unable to assist in the resolution of the issues between the parties.

Discussion

35. I turn now to consider which of these two starkly different accounts is to be preferred. While some of the detail may be misrecollected, I unhesitatingly prefer the account of Mr Apostolakis for the following principal reasons.

a. There is always a danger in drawing any inference from the demeanour of a witness, particularly when his evidence is given through an interpreter. But I have to say that, whilst Mr Apostolakis appeared to give his evidence in a responsive and straightforward way, Mr Konstantatos left me with the distinct impression that, despite understanding English well and thus having the benefit in effect of the question being put twice, was minded to disengage himself from making a direct and coherent response when any difficulties were put to him. Put bluntly, I approach the evidence of Mr Konstantatos with some caution.

b. It seemed to me that a significant pointer to the proper resolution of the issues was the question of the presentation and content of the visiting card by Mr Konstantatos. As already recorded Mr Konstantatos was minded to accept that he did hand over a visiting card, but asserted that it was a plain card with EF’s address and telephone number without any reference to SBL. During the course of the trial, a photocopy of the visiting card as given to Mr Apostolakis was unearthed. (I believe it had been found in the files of Mr Apostolakis’ Greek lawyer.) This did indeed have upon it the logo and name of the claimants. It is fair to say that it also had the logo and name of Commerze Bank Switzerland Limited. Nonetheless, not only was Mr Apostolakis’ recollection largely substantiated but the document is entirely consistent with the impression that Mr Apostolakis said he got to the effect that EF were acting as representatives of SBL. This was an understandable impression which no doubt SBL were anxious to suppress, given their instruction to Mr Konstantatos to destroy the visiting cards when it was discovered he had been using them.

c. The picture that emerged from the contemporary diaries of the principal witnesses also afforded some considerable support for Mr Apostolakis’ version of events. In the first place they certainly confirm that the initial meeting at Mr Apostolakis’ office did indeed take place on 25th July. Secondly, they undermine to some considerable extent the picture that Mr Konstantatos sought to paint of a series of meetings and other contacts stretching over the period between the initial meeting and the time when the contracts were signed in August, not least because they confirm that Mr Apostolakis’ office was closed as from 2nd August and that he was on holiday until 25th, only two days before the contracts were signed.

d. There was another feature of the diaries which was of some significance. There is a notation in Greek in Mr Apostolakis’ diary for the 28th July that roughly translates as “Ecu/Drachma 1 year steady”. Whilst this may have been a concept derived from a conversation over the telephone post the 25th July meeting, nonetheless it strongly supports Mr Apostolakis’ account of the extent to which Mr Konstantatos was giving strong encouragement to Mr Apostolakis about the medium term steadiness in the rate of exchange between the two currencies and thus, as Mr Apostolakis understood it, on the financial benefits to be derived from the scheme which Mr Konstantatos was recommending. Indeed it also somewhat undermines something that was put at the forefront of the claimant’s case namely that Mr Apostolakis could not conceivably have been naïve enough to believe that the exchange rates would remain steady. The entry clearly demonstrates that Mr Konstantatos managed to be totally convincing on this very topic.

e. Mr Apostolakis’ evidence was to the effect that the meeting on 25th July focussed entirely upon products of SBL. Whether or not products of any other bank were ever mentioned, Mr Apostolakis maintained that Mr Konstantatos recommended investment in an SBL product. Mr Konstantatos in his statement was at pains to assert that he had not made any recommendation about SBL and had left it to Mr Apostolakis to make a choice between the range of products and banks being put before him. In fact he was forced to retract that suggestion in the course of his oral evidence for two reasons. First, in a witness statement prepared by the claimant’s solicitor for the purpose of an earlier application for default judgment made in January 2000, he records being instructed by Mr Konstantatos that he had indeed recommended the claimant. Furthermore, this admission was repeated in points of reply filed in March 2000. Accordingly I am unable to accept the revised story on this topic as set out in Mr Konstantatos’ statement of May 2000. Moreover it is not easy to reconcile such a recommendation being made in the context of the version of the discussions between Mr Apostolakis and Mr Konstantatos put forward by Mr Konstantatos.

f. The next feature of the case that is worthy of examination is the extent and timing of the provision of the other documents to the defendants, apart from the tendering of the visiting card. Mr Konstantatos had it that no documents were provided to Mr Apostolakis at the initial meeting but that at some later stage the Directory of Service and Accounts were provided and at some yet further stage the draft forms of agreement were furnished. I have already referred to some of the difficulties of accounting for the delivery of documents when there were so few opportunities in fact for meetings between the parties following the initial meeting on the 25th July. Moreover, the entry in Mr Konstantatos’ diary for the 30th July to the effect that he was “preparing” papers for the Apostolakis’ suggests to me that the contractual documents referred to above had indeed been furnished before that time and that what Mr Konstantatos was preparing as a consequence of the discussions he had with Mr Apostolakis was in particular a completed form of questionnaire. It is difficult to see in what respect any other document needed to be “prepared” since they were all in standard and un-amendable form (with the possible exception of the schedule to the margin trading agreement).

g. Any confidence in Mr Konstantatos’ version of events is further undermined by the fact that in the points of reply the claimants specifically denied that the directory of services were supplied prior to the conclusion of the agreement. The pleading goes on to assert that Mr Konstantatos supplied this document at the very earliest at the time of the execution of the terms of business. “He did not intend the defendants to read the documents at that time and they did not do so. It was intended for subsequent reading.” This was wholly unsupported by anything Mr Kostantatos said in his statement or in his oral evidence. To the contrary his statement suggests that this document was furnished to Mr Apostolakis at a very early stage in the discussions. (It perhaps also indicates a degree of sensitivity as to the significance of the provision of such a document to Mr Apostolakis in the context of the issues of law arising in this case).

h. There is the strange position vis-à-vis the translations. As already stated they only emerged at a late stage just prior to the trial. Mr Konstantatos in his second witness statement identified a time for the provision of these translations to Mr Apostolakis that was very difficult to reconcile with Mr Apostolakis’ holiday arrangements that August. But even more problematical from Mr Konstantatos’ point of view is the emphasis that he placed in his first witness statement on the time that he spent time running through each document, explaining its purpose, during the course of his meetings with Mr Apostolakis. This is entirely in accord with Mr Apostolakis’ version of events that no translations were furnished. It is wholly inconsistent with the provision of translations, let alone translations that only came into existence in the middle of August.

i. The suggestion that translations were provided at any stage whatsoever is further undermined by the letter, which Mr Konstantatos signed in November 1999. Its contents are highly damaging to his credibility. It contained the suggestion that he had gone through the documentation with Mr and Mrs Apostolakis, that Mr and Mrs Apostolakis never expressed any reservations about signing the documents and that “their command of English is excellent”. In fact there was no possibility of Mr Konstantatos running through the documents in August (and if he had done late in the month, he would have made use of the translations which were by then available). So far as the 27th August was concerned, the documents had already been signed by the defendants before Mr Konstantatos ever arrived to collect them. There was no question of any explanations being furnished to Mrs Apostolakis because Mr Konstantatos never met her. Finally, the wholly untruthful assertion that the Apostolakis’ understood English well is of course only consistent with the fact that no translations were furnished at any stage.

36. For all those reasons I prefer the evidence of Mr Apostolakis and Mr Mitzirikis as to the broad timetable and content of events from 25th July onwards. In brief I find as follows:

a. The initial meeting took place on 25th July 2000. At that meeting Mr Konstantatos did represent that he acted on behalf of the claimant and made no mention of any other bank from which investment products were available.

b. He made a detailed presentation at the first meeting as to the manner in which advantage could be taken of the disparity between the interest rates on the Ecu and the Drachma.

c. At the first meeting he extracted sufficient information from Mr Apostalakis to complete the questionnaire.

d. He did assure Mr Apostolakis that it was both his opinion, and the conventional opinion in the market, that the Drachma would not be devalued within the short or medium term.

e. Accordingly he strongly recommended to Mr Apostolakis that he make an investment with SBL.

f. He sought to give further support to the merit of the claimant organisation by presenting the Directory of Services and Accounts to Mr Apostolakis.

g. By the content of his advice and the provision of the documentation including a visiting card it was intended by Mr Konstantatos to convey, and was perceived by Mr Apostolakis as confirming, that EF acted in some representative capacity on behalf of SBL.

h. Mr Apostolakis asked for translations of the contract forms and none were ever furnished to him.

Section 4 of the Brussels Convention.

37. Mr Justice Longmore has already decided the threshold question that both for the purposes of Article 13 of the Brussels Convention, and for the purposes of the unfair terms in Consumer Contracts Regulations 1994 (and 1999), the defendants were, in entering into their contracts with the claimants, doing so for purposes which were outside their trade, business or profession. Nonetheless in order to rely upon Article 14 which would enable them, despite the exclusive jurisdiction clause, to bring proceedings against the claimants in Greece and which would prohibit the claimant from instituting proceedings against them outside Greece, it is necessary for them to satisfy another threshold requirement of Article 13 namely that “in the state of the consumer’s domicile, the conclusion of contract was proceeded by a specific invitation addressed to him or by advertising”.
38. This is virgin territory so far as authorities are concerned within this jurisdiction. The Schlosser Report only provides some very modest guidance as to the construction of this part of the convention. Having observed that consumer contracts are “subject to the special provisions only if there is a sufficiently strong connection with the place where the consumer is domiciled”, the report refers the reader for further assistance on the meaning of “a specific invitation” or “advertising” to the Giuliano and Lagarde Report then being prepared for the purposes of the Rome Convention.
39. Only relevant passage in this latter report reads as follows:-

“The first indent relates to situations where the trader has taken steps to market his goods or services in the country where the consumer resides. It is intended to cover inter alia mail order and doorstep selling. Thus the trader must have done certain acts such as advertising in the press, or on radio or television, or in the cinema or by catalogues aimed specifically at that country, or he must have made business proposals individually through a middle man or by canvassing. If, for example a German makes a contract in response to an advertisement published by a French company in a German publication, a contract is covered by the special rule. If, on the other hand, the German replies to an advertisement in an American publication, even if they are sold in Germany, the rule does not apply unless the advertisement appeared in special editions of the publication intended for European countries. In the latter case the seller would have made a special advertisement intended for the country of the purchaser.”

40. It seems to me that the words specific invitation should not be accorded anything other than a natural and common sense meaning bearing in mind that the provisions of the Convention must of course be given uniform application in all Convention countries. It is also clear that the Convention does not adopt the simple route of excluding all consumer contracts. Accordingly the exceptions must not be interpreted in such a manner as to extend them beyond the cases envisaged: see Benincasa -v- Dentalkit Srl [1997] ECR 1-3767.
41. Bearing that in mind, and with the guidance of the authoritative commentaries referred to above, I have come to the conclusion that the defendants have made good their case that the conclusion of the contract was “preceded by a specific invitation addressed to them”. My primary reasons are as follows:-

(a) EF had been appointed by the claimant as an “introducer”. Although the agreement made it plain as between the parties that EF were not hereby made agents of SBL, the reality was that EF’s role was to indentify, engage and introduce specific clients.

(b) EF duly presented the defendants with a business plan or package available from the claimants, indicating both by word and documentation that EF represented SBL.

(c) EF recommended the package and recommended the claimants as promoters of it without reference to any alternative source.

(d) It follows that these proposals were to all outward appearances marketed in Greece by the claimants through Eurofinance or, to put it another way, the claimant’s business proposals “were made by a middleman to the defendants”.

(e) The proposals were made individually to the defendants: the fact that the defendants made the initial approach to EF is irrelevant.

Unfair terms regulations

42. In summary, it seems to me that any fair perception of the facts viewed overall results in the case having a strong connection with Greece and falling well within the embrace of the Article 13. This conclusion makes it strictly unnecessary to consider the second issue as to whether the jurisdiction clause falls foul of the regulations as an unfair term. The matter would only be material if I was wrong as to the applicability of Article 13 and 14. I will however express my preliminary views upon the point.
43. The regulations define an unfair term as meaning “any term which contrary to the requirement of good faith causes a significant imbalance in the parties rights and obligations under the contract to the detriment of the consumer.” The regulations go on in Schedule 2 to give guidance as to the manner in which the existence or otherwise of good faith should be assessed as follows:

In making an assessment of good faith, regard should be had to:

(a) the strength of the bargaining positions of the parties;

(b) whether the consumer has an inducement to agree the term;

(c) whether the goods or services were sold or supplied to the special order of the consumer and;

(d) the extent to which the seller or supplier had dealt fairly and equitably with the consumer”.

44. Schedule 3 of the regulations goes on to give some illustrations of the kind of terms which might be regarded as unfair. The only one with potential reference to the jurisdiction clause in issue here is (q):

“excluding or hindering the consumer’s rights to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which according to the applicable law should lie with another party to the contract.”

45. The claimants’ contention was that, since for the purposes of this argument Article 13 and 14 had no application, it could not be said that to require the defendants to bring proceedings in England was contrary to good faith firstly because the contract was subject to English law, and secondly because in the event that the jurisdiction clause was struck down the provisions of Article 2 and 5 of the Convention would require the defendants to institute proceedings against the claimants in the claimants’ domicile namely England.
46. The defendants’ response was to pray-in-aid a passage from Professor Beale’s contribution to Beatson & Friedman: Good Faith and Fault in Contract Law (1995) at p.245 cited with approval by the Court of Appeal in Director General of Fair Trading v. First National Bank plc [2000] 2 WLR 1353 at p.1365:

I suspect that good faith has a double operation. First, it has a procedural aspect. It will require the supplier to consider the consumer’s interests. However, a clause which might be unfair if it came as a surprise may be upheld if the business took steps to bring it to the consumer’s attention and to explain it. Secondly, it has a substantive content: some clauses may cause such an imbalance that they should always be treated as unfair.

47. Against that background, the defendants submit that jurisdiction clauses of the kind provided for in the present case are prima facie unfair by reason of the imbalance of convenience between the parties, bearing in mind that it is the potential for unfairness rather than the actual unfairness in the particular case that matters. The degree of imbalance and consequent unfairness, it was suggested, was exaggerated in the present case by the alternate jurisdictions made available to the claimant but not to the defendants. Whilst in some case the unfairness might be overcome by careful explanation of its meaning and effect, in the present case no explanation, let alone a translation, was made.
48. As regards the general objection, the defendants relied upon the decision in Oceano Groupo Editorial SA -v- Rocio Murciano Quintero (C-240/98). In the context of a small domestic dispute, the European Court stated as follows:

“22: A term of this kind, the purpose of which is to confer jurisdiction in respect of all disputes arising under the contract on the court in the territorial jurisdiction of which the seller or supplier has its principle place of business, obliges the consumer to submit to the exclusive jurisdiction of a court which may be a long way from its domicile. This may make it difficult for him to enter an appearance. In a case of disputes concerning limited amounts of money the costs relating to consumers entering an appearance could be a deterrent and cause him to forego any legal remedy or defence. Such a term thus falls within the category of terms which have the object of effect of excluding or hindering the consumer’s rights to take legal action, a category referred to in sub-paragraph q of paragraph 1 of the annex to the directive.

23. By contrast the term enables the seller or supplier to deal with all the litigation relating to his trade, business or profession in the courts in the jurisdiction of which he has his principal place of business. This makes it easier for the seller or supplier to arrange to enter an appearance and makes it less onerous for him to do so.

24. It follows that where a jurisdiction clause is included, without being individually negotiated, in a contract between a consumer and a seller or supplier within the meaning of the directive and where it confers exclusive jurisdiction on a court in the territorial jurisdiction of which the seller or supplier has its principal place of business, it must be regarded as unfair within the meaning of Article 3 of the directive in so far as it causes, contrary to the requirement of good faith, a significant imbalance in the party’s rights and obligations arising out of the contract, to the detriment of the consumer.”

49. The concerns of cost and convenience are enhanced in the present case, so the defendants contend, by the potential impact of the jurisdiction clauses as construed by Longmore J. to the effect that, while the defendants can only sue the claimant in England, the claimant at its option can sue the defendants in England, in any country where the defendants have assets or indeed in any other country where the defendants would be amenable to suit.
50. It is further submitted on behalf of the defendants that the present case provided a good example of potentially confusing sets of jurisdiction clauses calling for translation and careful explanation. On my findings of fact, such was not forthcoming.
51. I accept the defendants’ submissions. I recognise that in terms of a consumer contract the arrangements into which the defendants entered must be at the “business” end of the scale given the size of the investments made. Nonetheless the purpose of the regulations is to protect consumers and it is into that category that they fall. The present proceedings alone demonstrate the potential cost and inconvenience of being bound to this jurisdiction, all conducted in a language that they do not speak. I conclude that the imbalance, which has taken the defendants by surprise, is contrary to good faith and, accordingly, that the jurisdiction clause is not binding.