THE HIGH COURT
			1998 No. 1479p
BETWEEN
CLARE TAVERNS TRADING AS DURTY NELLY’S 
			PLAINTIFF
AND
CHARLES GILL TRADING AS UNIVERSAL BUSINESS SYSTEMS
			DEFENDANT
AND
TEC (UK) LIMITED 
			FIRST NAMED THIRD PARTY
AND
ANTHONY HOURIGAN (OTHERWISE ANTHONY HORRIGAN)
			SECOND NAMED THIRD PARTY
AND
COMPUTATILL EPOS LIMITED
			THIRD NAMED THIRD PARTY

JUDGMENT of Mrs Justice McGuinness delivered the 16th day of November, 1999.

	This is a Motion on Notice brought pursuant to Order 16 Rule 8(3) of the Rules of the Superior Courts seeking the setting aside of third party proceedings against the first named third party or alternatively the striking out of these third party proceedings as against the first named third party on the grounds that by virtue of Article 17 of the Brussels Convention 1968, which is incorporated into Irish law by the Jurisdiction of Courts and Enforcement ofJudgments (European Communities) Act, 1988, this Court has no jurisdiction to hear and determine the Plaintiff’s claim against the first named third party.
	The Action itself is brought by the Plaintiff, an Irish company which carries on the business of publican and restaurateur at the licensed premises known as Durty Nelly’s at Bunratty, Co. Clare, against the Defendant, who is also Irish, and who carries on the business of shop and office equipment supplier.  In broad outline the Action arises out of the sale and installation of a cash control system at the Plaintiff’s licensed premises which the Plaintiff claims was defective and unfit for the purpose.  The Defendant has by Order of this Court (Johnson J.) made the 9th day of November, 1998 served third party notices on three third parties the first of which is TEC (UK) Limited, the mover of the present Motion.  It is common case that the said first named third party supplied the Defendant with cash control computer terminals and related equipment for use in the Plaintiff’s cash contol system (the necessary “hardware”).  There is an issue between the Defendant and the first named third party as to whether the first named third party had any involvement in the supply and installation of the “software” involved in the cash control system, but this is not relevant to the issues before this Court on the Notice of Motion.  
	It is established by the Affidavit of Peter Dodd, manager of the reseller division of the first named third party, that TEC (UK) Limited is a company domiciled in England, and indeed this is not denied by the Defendant.  
	The Defendant in his Third Party Notice relies on Articles 5.1, 5.3 and 6.1 and/or 6.2 of the Brussels Convention to establish the jurisdiction of this Court to hear and determine the proceedings.
	The relevant Articles of the Brussels Convention provide as follows:-

“Article 2
	Subject to the provisions of this Convention, persons domiciled in a 		Contracting State shall, whatever their nationality, be sued in the Courts of 		that State.  

Article 5
	A person domiciled in a Contracting State may, in another Contracting State, 		be sued:
	1.	In matters relating to a contract, in the Courts for the place of 			performance of the obligation in question; .... 
	3. 	In matters relating to tort, delict or quasi-delict, in the Court for the 			place where the harmful event occurred; ....

Article 6
	A person domiciled in a Contracting State may also be sued:
	1.	Where he is one of a number of Defendants, in the Courts for the place 			where any one of them is domiciled;
	2.	As a third party on an action on a warranty or guarantee or in any other third party proceedings, in the Court seised of the original proceedings, unless these were instituted solely with the object of removing him from the jurisdiction of the Court which would be competent in his case; ....

Article 17
	If the parties, one or more of whom is domiciled in a Contracting State, have 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 connection with a particular legal relationship, that Court or those Courts shall have exclusive jurisdiction.  Such an agreement conferring jurisdiction shall be either in writing or evidenced in writing or, in international trade or commerce, in a form which accords with practices in that trade or commerce of which the parties are or ought to have been aware. ....”

	Counsel for the first named third party submitted that Article 17 took priority over and excluded the special jurisdiction provided under Articles 5 and 6.  In stating this she relied on the judgment of the European Court of Justice in the case of Galeries Segoura SPRL -v- Bonakdarian [1976] ECR 1851.  In that case the Court stated (at page 1860) in relation to Article 17:
	“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 by Article 2 and the special jurisdictions provided for in Articles 5 and 6 of the Convention.”

	The question has been further considered by the English Courts in the recent case of Hough -v- P and O Containers Limited (Blohm + Voss Holding AG and Others third parties) [1998] 2 All ER 978, in which it was held, as set out in the headnote, that having regard to the use of the word “may”, the special jurisdiction under Article 6(2) of the Convention was merely permissive.  However, Article 17 was expressed in mandatory terms and therefore had the effect of excluding that jurisdiction.  It followed that, where it applied, Article 17 took priority over Article 6(2).  The learned Rix J. in his judgment (at page 986) stated:
	“In my judgment, however, Mr Melville has confused the relationship between Article 2 and the special jurisdictions within Section 2 of the Convention on the one hand with the relationship between Article 17, under Section 6 dealing with prorogation of jurisdiction, and other jurisdictions under the Convention on the other hand.  In the former case, Article 6(2) is indeed a‘special jurisdiction’, and where it is properly applied will override the basic rules set out in Article 2.  That, however, the upholding of a special jurisdiction is permissive and not mandatory is emphasised by the word ‘may’ which appears in Articles 5 and 6, and is well illustrated by the reasoning in Kinnear’s case itself.  Article 17, however, where it applies, is mandatory (‘shall have exclusive jurisdiction’) and the effect of it is to exclude not only the merely permissive jurisdictions under Articles 5 and 6 but even the mandatory (but not of course universal) principle of Article 2 itself (where Article 17 conflicts with Article 2, which in the present case of course, it does not).  .... Moreover Dicey and Morris on the Conflict of Laws (12th edition 1993) (4th cumulative supplement 1997) page 51 comments as follows:-

	‘Article 6(2) would not be applicable if the third party claim is subject to an agreement to submit to the jurisdiction of another Contracting State’”

	Counsel for the Defendant sensibly did not raise any particular issue on this point, so that I conclude that this Court must in the main deal with the application of Article 17 in the light of the facts of this case and of the applicable law.
	The factual background is set out in the Affidavits of Peter Dodd on behalf of the first named third party and Charles Gill, the Defendant.  The present dispute between the Defendant and the first named third party arises out of an agreement made in either April or July of 1997 whereby the Defendant agreed to purchase and the first named third party agreed to supply the computer terminals already referred to.  MrDodd in his Affidavit claims that this contract was governed by TEC (UK)’s conditions of sale, which appeared on the reverse side of the invoice sent to the Defendant.  These conditions of sale provided at clause 19 as follows:
	“Jurisdiction and Governing Law
	Any contract of which these conditions form part shall be governed by the laws of England and the buyer hereby submits to the jurisdiction of the English Courts”.

	In support of this claim he exhibits the invoice itself, together with a set of standard invoices containing the same clause, which is drawn to the customer’s attention by the statement on the face of the invoice that “ALL TRANSACTIONS ARE SUBJECT TO STANDARD CONDITIONS OF SALE OVERLEAF”.  
	It appears that the Defendant and the first named third party began dealing with each during the years 1987 to 1989.  There is an issue between them as to why they ceased to deal in 1989 but it is not necessary for me to resolve this issue.  In or about 1995 the Defendant again wished to deal with TEC (UK) and forwarded an application for credit terms dated 3rd October, 1995.  MrDodd avers that further to this 1995 application the Defendant was sent a printed copy of the conditions of sale which were then applied by TEC (UK).  Clause 20 of these conditions of sale provides: 
	“Jurisdiction and Governing Law
	Any contract of which these conditions form part shall be governed by the laws of England and the buyer hereby submits to the jurisdiction of the English Courts.”
	
	The Defendant in his Affidavit states that he has no recollection of being sent a printed copy of these conditions of sale and that he is unable to find any record of having been sent such conditions.  However, he accepts that the clause referred to by MrDodd appeared on the reverse side of the invoices which were sent to him in regard to various transactions and that it appeared on the relevant invoices in regard to the sale of the computer terminals in question.  Mr Dodd avers that the Defendant had never at any time taken issue with the conditions of sale offered by TEC (UK) and had never sought alternative conditions of sale.  Since 1995 the Defendant had on a number of occasions purchased equipment from TEC (UK) and had always received an invoice containing on its reverse side TEC (UK)’s terms and conditions of sale, including the clause dealing with jurisdiction and governing law.  
	The Defendant, Mr Gill, in his Affidavit states that he never read the conditions of sale which appeared on the reverse side of the invoices in detail and that he understood in his dealings with the first named third party that if any difficulty arose about products provided by it to him in Ireland he could proceed against the first named third party in the Irish Courts.  He claims that the relevant clause should not be interpreted as an exclusive jurisdiction clause but if it is capable of being interpreted as an exclusive jurisdiction clause he says that it did not form part of any agreement between him and thefirst named third party because he did not intend to agree and nor did he agree to such a clause.  He would only have accepted a clause which provided an alternative venue for proceedings in the event that the first named third party wished to sue him.  Mr Gill also claims that he has a good cause of action against the first named third party in tort for misrepresentation and also for an express or implied indemnity.  He states that these claims ought not to be governed by the jurisdiction clause contained in the conditions of sale.  He also claims that the first named third party was negligent and in breach of duty in regard to the supply of the system to the Plaintiff.  In a second Affidavit MrDodd inter alia denies that TEC (UK) supplied “the system” to the Defendant; it only supplied the computer terminals.  However, all these questions fall to be decided at the trial of the action.
	When the matter came on for hearing before me Counsel for the first named third party submitted that the three issues to be decided by this Court were as follows
	1.	Is clause 19, the jurisdiction and governing law clause of the conditions of sale, an exclusive jurisdictional clause?
	2.	Was this clause an agreement within the meaning of Article 17 of the Brussels Convention and could it be shown, in the context of Article 17, that there was sufficient consensus between the parties?  
	3.	Did clause 19 cover reliefs in addition to those arising directly from the contract - e.g. tort, indemnity, etc?
	
	It seems to me that this correctly states the issues to be decided. 	
	With regard to the first question the clause in question firstly states that the contract is governed by the laws of England.  This in itself, of course, does not decide jurisdiction, since it would be open to the Courts of Ireland or of another jurisdiction to interpret the contract in accordance with English law.  This procedure may give rise to somedifficulties and complexities but it is by no means impossible.  The clause goes on to state in boldly general terms.  	“And the Buyer hereby submits to the jurisdiction of the English Courts”.   The English Courts have dealt with the interpretation of purported exclusive jurisdiction  clauses - see, for example British Aerospace plc -v- Dee Howard Company [1993] 1 Lloyds Law Reports 368, and Continental Bank NA -v- Aeokos Cia Naviera SA and others [1994] 2 All ER 540.  The Clauses in those cases, however, were considerably more sophisticated and more carefully drawn.  It is, of course, obvious that the first named third party intended that clause 19 would confer exclusive jurisdiction on the English Courts, but is that sufficiently clear to the Buyer on the actual wording?  Even a simpler clause, such as that dealt with byGeoghegan J. in Holfeld Plastics Limited -v- ISAP OMV Group Sp A (High Court, unrptd, 19th March, 1999) which stated under the heading Competent Courts of Law “In the event of dispute, the parties shall accept as the Competent Court of Law, the Courts in the place where the Vendor has his head office” is much clearer in its intent than clause 19 in the instant case.  However, a number of other factors must be taken in to account.  Firstly, the relevant clause is headed “jurisdiction and governing law”, which indicates that it deals both with the law governing the contract and also with the jurisdiction to which disputes are to be referred.  Secondly, the Defendant asserts in his Affidavit that, although he never read the conditions of sale in detail, he“understood in his dealings with the first named third party” that he could proceed in the Irish Courts.  He does not suggest that this was his understanding of clause 19, or that clause 19 conveyed that meaning, or, indeed, that the first named third party ever informed him that he could proceed in the Irish Courts in the event of a dispute.  His averment relates solely to his own“understanding” of the matter and not to any basis for that understanding.  Thirdly, and perhaps wisely, Counsel for the Defendant did not deal with this as a major point in his submissions.  On balance, therefore, and with some hesitation on account of the loose nature of the wording, I accept that clause 19 of thestandard conditions of sale appearing on the invoices and clause 20 of the conditions of sale document are clauses providing for exclusive jurisdiction.
	The second issue is concerned with the interpretation of Article 17 of the Brussels Convention in the context of the facts of the instant case.  In Holfeld Plastics Limited -v- ISAP OMV Group Sp A the learned Geoghegan considered somewhat similar situation where the Defendant relied on an exclusive jurisdiction clause which was included in the printed Conditions of Contract.  The Plaintiff argued that at the relevant time he had not read the terms and conditions which contained the jurisdiction clause.  The learnedGeoghegan J. stated (at page 4 of his judgment) 
	“If it was simply a matter of interpreting the contract in accordance with Irish law, I would have no hesitation in holding in favour of the Defendant.  These were two commercial companies dealing at arms length and a company such as the Plaintiff should expect supplier companies such as the Defendant to annex to all its sales its own terms and conditions.  Both quotations made it expressly clear that those conditions were to apply and on any reasonably careful reading of them the Plaintiff would have been on notice of the exclusive jurisdiction clause.”

	Geoghegan J., however, went on to say:
	“However, I am satisfied that it is not correct to determine this matter by reference to the Irish Law of Contract.  In the case of an exclusive jurisdiction clause, the provisions of Article 17 of the Brussels convention must be strictly applied and in the course of that application the clause must be interpreted in accordance with European Community Law”.

	The same approach must, it seems to me, be used in the present case.  The Defendant had been, in terms of Irish law, put on notice throughout the history of his trade with the first named third party of the jurisdiction provision contained in clause 19.  In addition it seems likely that in 1995 he had received the printed conditions of sale which included clause 20 on jurisdiction.  Clause 19 had been printed on the reverse side of the invoice covering the actual transaction whereby the first named third party supplied the computer terminals used in the Plaintiff’s cash control system.
	Turning to European Community Law, a comparable situation was dealt with by the European Court of Justice in the case of Galeries Segoura SPRL -v- Bonakdarian [1976] ECR 1851.  In that case the Court was asked to give a ruling on two questions as follows:
	“1.	Are the requirements of Article 17 of the Convention satisfied if, at the oral conclusion of a contract of sale, a vendor has stated that he wishes to rely on his general conditions of sale and if he subsequently confirms the contract in writing to the purchaser and annexes to this confirmation his general conditions of sale which contain a clause conferring jurisdiction?
	2.	Are the requirements of Article 17 of the Convention satisfied if, in dealings between merchants, a vendor, after the oral conclusion of a contract of sale, confirms in writing to the purchaser the conclusion of the contract subject to his general conditions of sale and annexes to this document his conditions of sale which include a clause conferring jurisdiction and if the purchaser does not challenge this written confirmation?”
	In that case, on handing over the goods, the vendor delivered to the purchaser a document described as “confirmation of order and invoice”, which stated that the sale and delivery had taken place “subject to the conditions stated on the reverse”.  This document was not confirmed by the purchaser.  In its ruling the Court held that the way in which the first paragraph of Article 17 of the Convention was to be applied 
	“must be interpreted in the light of the effective but confirmative 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 consequence 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.”
	
	In regard to the second question the Court held that a subsequent notification of general conditions of sale is not capable of altering the terms agreed between the parties, except if those conditions are expressly accepted in writing by the purchaser.  The Court, however, went on to distinguish the situation where the contract in question formed part of a course of trading between the parties, stating (at page 1862)
	“However, it would be otherwise where an oral agreement forms part of a continuing trading relationship between the parties, provided also that it is established that the dealings taken as a whole are governed by the general conditions of the party giving the confirmation, and these conditions contain a clause conferring jurisdiction
	Indeed, in such a context, it would be contrary to good faith for the recipient of the confirmation to deny the existence of the jurisdiction conferred by consent, even if he had given no acceptance in writing.”

	The Court concluded that 
	“the fact that the purchaser does not raise any objections against a confirmation issued unilaterally by the other party does not amount to acceptance on his part of the clause conferring jurisdiction, unless the oral agreement comes within the framework of a continuing trading relationship between the parties which is based on the general conditions of one of them, and those conditions contain a clause conferring jurisdiction.” 

	The European Court returned to the question of the interpretation of Article 17 in the case of Mainnschiffahrts - Genossenschaft eG (MSG) -v- Les Gravières Rhénanes SARL [1997] ECR 1-911.  By this time Article 17 had been amended by the 1978 Accession Convention so as to include the phrase “or, in international trade or commerce, in a form which accords with practices in that trade or commerce of which the parties are or ought to have been aware.”  As a consequence of this, therefore, the Court held (at page 940) “It must therefore be considered that the fact that one of the parties to the contract did not react or remained silent in the face of the commercial letter of confirmation from the other party containing a pre-printed reference to the Courts having jurisdiction and that one of the parties repeatedly paid without objection invoices issued by the other party containing a similar reference may be deemed to constitute consent to the jurisdiction clause in issue, provided that such conduct is consistent with the practice in force in the area of internationaltrade or commerce in which the parties in question are operating and the parties are or ought to have been aware of that practice.”
	In the submissions made before this Court it was not seriously suggested that the practice of printing general conditions of sale on the reverse side of invoices and similar documents, with a reference on the face of the document to the said conditions, was not a common commercial practice in the type of international trade with which we are concerned here.  Indeed, from the point of view of practical experience every ordinary consumer, and still more anyone engaged in trade or commerce, must be familiar with this type of document.
	In the instant case the Defendant had regularly traded with the first named third party both from 1987 to 1989 and subsequently from 1995 onwards.  It is established by the Affidavit of Mr Dodd and the exhibits thereto that the Defendant had repeatedly received invoices which included clause 19, the jurisdictional clause.  At no stage had the Defendant even raised a query in regard to this clause.  Still less had he refused to be bound by it.  It seems to me, therefore, that the contract entered into by the Defendant and the first named third party, whether it be a written contract or a contract partly in writing and partly oral, incorporated the terms and conditions set out repeatedly on the invoices sent out by the first named third party in the course of trade.  In these circumstances the Court must hold that there was consensus between the parties as to the jurisdictional clause and that it came within the terms of Article 17 of the Convention.  
	The third question which arises is whether the exclusive jurisdiction of the English Courts referred to in clause 19 extends to reliefs other than that of breach of contract. In his third party notice the Defendant claims negligence and breach of duty against the third parties and also claims an indemnity against them.  In his Affidavit of the 7th May, 1999 the Defendant refers to a claim of misrepresentation, and this also forms part of the Plaintiff’s original Statement of Claim.  Counsel for the Defendant argued strongly that these claims fell outside the scope of clause 19.  They fell to be litigated in this Court and, in order to avoid the undesirable situation of having differing claims as between the same parties litigated simultaneously in two jurisdictions, the entire of the Defendant’s claim as against the first named third party should be dealt with by this Court which was the Court first seised of the matter.
	Counsel for the first named third party submitted that all the claims by the Defendant against the first named third party arose in reality from the same transaction - the contract to supply computer terminals - and that all aspects of the matter should come under the jurisdiction of the English Courts.  She referred to the case ofContinental Bank NA -v- Aeokos Cia Naviera SA and Others [1994] 2 All ER 540.  In that case a loan agreement between an American bank and a number of Greek shipping companies contained a clause which, the Court held, conferred exclusive jurisdiction on the English Courts.  Clause 21.01 of that agreement provided that the agreement was to be governed by and construed in accordance with English law and that each of the borrowers irrevocably submitted to the jurisdiction of the English Courts.  It was argued on behalf of the borrowers that the proceedings which they had commenced in the Greek Courts fell outside the scope of the agreement.  The Greek proceedings were based on Article 919 of the Greek Civil Code which provided:
	“Whoever intentionally in a manner which violates the commands of morality causes damages to another is bound to make reparation to the other for any damage thus caused.”
	
	Steyn L.J. held that clause 21.01 of the agreement contemplated the submission of disputes to the English Courts.  He went on to say 
	“But what disputes does it cover?  The answer is not to be found in the niceties of the language of clause 21.02.  It is to be found in a common sense view of the purpose of the clause.  We are emboldened to adopt this approach by the observation of LordDiplock in Antaios Cia Naviera SA -v- Salen Rederierena AB, The Antaios [1984] 3 All ER 229 at 233 that - ‘if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense ...’  The only sensible construction of clause 21.02 is that it is a submission of disputes in connection with the loan facility to the jurisdiction of the English Courts.
	Prima facie, therefore, clause 21.02 covers the Greek proceedings.  But Miss Dohmann submits that the clause cannot be construed as extending to a claim in tort.  It seems to us to be useful on this point to consider the approach adopted nowadays in the closelyanalagous field of arbitration clauses.  In Empresa Exportadora de Azucar -v- Industria Azucarera Nacional SA [1983] 2 Lloyds Reports 171 the arbitration clause covered any dispute arising out of this contract.  The question was whether it covered only contractual claims or also a claim in conversion.  In giving the judgment of the Court Ackner L.J. concluded (at 183): ‘... the contractual and tortious claims were so closely knitted together on the facts, that the agreement to arbitrate on one can properly be construed as covering the other.’  Moreover, if Miss Dohmann is right, it would mean that a claim for damages for negligent misrepresentation inducing the contract (a tort) would be outside clause 21.02 but a claim seeking rescission of the contract on the ground of the same misrepresentation (a contractual claim) would be covered by it.  Ifthe Appellant’s contention is accepted, it follows that the two claims might have to be tried in different jurisdictions.  That would be a forensic nightmare.”

	Steyn L.J. went on to conclude 
	“The complaint in the Greek proceedings makes clear that the thrust of the Appellant’s case is that the bank performed the loan agreement in a manner which is contrary to business morality.  The issue in the Greek proceedings is inextricably interwoven with the contractual rights and duties of the parties.  In our judgment the judge rightly concluded that all disputes in connection with the loan facility are covered by the jurisdiction clause, and, so construed, clause 21.01 is apt to cover the disputes in the Greek proceedings.”

	It seems to me that this is the correct approach and is, indeed, in accordance with business common sense.  The Defendant’s claims of negligence, of misrepresentation, and indemnity are “closely knitted” to the contractual claim, and indeed it appears that very much the same evidence would be used in support of all the claims.  If, as I have held, the contractual claim falls to be decided by the English Courts under clause 19, it would be extremely difficult and costly to pursue separate proceedings in tort before the Irish Courts.  In my view all theseinter-related claims must be tried together.
	Accordingly, this Court has no jurisdiction to hear and determine the Defendant’s claim against the first named third party, and this Court must set aside the service of the third party notice upon the first named third party.

tcjmgdn