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OUTER HOUSE, COURT OF SESSION
[2006] CSOH 99
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CA53/05
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OPINION OF LORD CLARKE
in the cause
MACKAYS STORES
LIMITED
Pursuers;
against
TOPWARD LIMITED
Defenders:
ญญญญญญญญญญญญญญญญญ________________
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Pursuers: Connal, Q.C., Solicitor Advocate; McGrigors
Defenders: Fairley; Semple Fraser
30 June 2006
Introduction
[1] In
this commercial action the pursuers sue the defenders for ฃ270,210.07 with
interest. They do so on the basis of
averments that the defenders have been supplying them with ladieswear since the
1980s. Put broadly, the pursuers aver
that over the years of their trading relationship with the defenders, a
discount system applied whereby initially a discount on the price normally
charged for the goods was applied for prompt payment and subsequently, in
addition, what is described as a distribution discount was also applied. The pursuers claim that between August 2001
and January 2005 they paid the defenders on invoices submitted to them for
goods supplied without making the prompt payment and distribution discount
therefrom. This, they say, came about
because during 1999 to 2000 the parties operated a separate agreement regarding
goods manufactured in Turkey,
in respect of which the parties agreed no discount should be applied. It is averred that, in error, from August
2001 payments in respect of goods supplied by the defenders, under the ongoing
contractual arrangements, whereby the discounts fell to be applied, were made,
in error, by the pursuers to the account number of the distinct separate
agreement regarding goods manufactured in Turkey. The pursuers, accordingly, claim that they
have overpaid the defenders for goods supplied between August 2001 and January
2005 in the sum they now sue for.
[2] The
pursuers aver, in Article 1 of the condescendence, that the terms and
conditions of trade between the parties which applied to the goods supplied
between August 2001 and January 2005, contained a term to the following
effect:
"Any disputes
or differences of whichsoever nature arising out of the order, the contract or
the delivery of the goods shall be governed by the law of Scotland and the
Supplier agrees that any such dispute or difference unless otherwise settled
amicably between the Company and the Supplier shall be subject to the exclusive
jurisdiction of the Scottish Courts and the parties hereby agreed to such
jurisdiction."
The defenders are domiciled in England.
[3] The
defenders have a preliminary plea to the effect that the Court has no
jurisdiction. They also have a
preliminary plea as to the relevancy of the action. In answer 1 they make the following
averments:
"Explained and
averred that esto the purported
contractual term condescended upon by the pursuer formed part of any agreement
between the parties which is relevant to this action (which is denied), such a
term would not, in any event, have the effect of conferring jurisdiction upon
this Court in relation to the subject matter of this action, the subject matter
which is a claim for repetition and not a 'dispute ... arising out of the order,
the contract or the delivery of the goods'.
Separatim, the defender is not
domiciled in Scotland. This court has no jurisdiction."
[4] The
pursuers' first plea-in-law is to the following effect:
"The sum sued
for having been paid for by the Pursuers to the Defenders in error, and it
being equitable so to order, decree for payment by the Defenders to the
Pursuers of the sum concluded for should be pronounced."
[5] The
parties were originally allowed a debate on their respective preliminary
pleas. Shortly before the debate diet
the pursuers sought to lodge a minute of amendment. The defenders' counsel advised the Court that
this would require to be answered, if allowed.
Both parties were, however, in agreement that the debate should proceed
to dealt with the relevancy of the pursuers' averments regarding jurisdiction,
for if the defenders' attack on these was successful that would dispose of the
action. I agreed that the debate should
proceed on that footing.
The Defenders' Submissions
[6] In
opening his submissions, counsel for the defenders immediately formulated his
approach by identifying the pursuers' "claim" as being one based on unjust
enrichment. The sub-heading of that
general categorisation, upon which the pursuers appeared to rely on, was
repetition, but counsel for the defenders suggested that, in truth, the claim
was more properly described as one being based on restitution. In any event, the remedy sought and the legal
basis upon which it was sought, it was submitted, required that the defenders
be sued in the country of their domicile.
Counsel for the defenders referred me to a particular averment in Article 1
of condescendence which is to the following effect:
"In the current
action the Pursuers seek repetition of money paid in error to the Defenders
under a contract of supply between the Pursuers and the Defenders."
That averment, it was said, sought,
as it were, to elide the question of jurisdiction. For jurisdiction to exist in this Court the pursuers
were required to base their claim expressly on rights arising from the contract,
whereas in reality what they were driven to do was to base their claim on the
legal basis of repetition.
[7] In
support of his approach to the matter, counsel for the defenders sought to rely
on certain obiter dicta of
Lord Macfadyen in the case of Compagnie
Commercial Andre SA v Artibell
Shipping Co Ltd 1999 SLT 1051. In
that case charterers of a ship for a voyage from France
to Iraq raised
an action against its owners, who were domiciled in Cyprus,
and the owners' bankers who were domiciled in Scotland. Various claims were made in the action based
on damages for breach of contract, restitution and constructive trust. The ship owners tabled a plea of no
jurisdiction. The charterers claimed
that jurisdiction lay against the ship owners on a proper construction of
certain provisions of the Civil Jurisdiction and Judgments Act 1982. The ship owners also relied on a clause in
the charterparty which provided that "all disputes arising out of this contract
shall be governed in London" which, they asserted, operated as a clause
prorogating the exclusive jurisdiction of the English Courts and thus excluded
jurisdiction in the Scottish Court, under the 1982 Act, Sched. 8,
Rule 5. The Lord Ordinary preferred
the arguments of the charterers in respect of the application of the provisions
of the 1982 Act. He, moreover, held that
the words in the charterparty stating that all disputes arising out of the
contract should be governed in London
did not meet the requirements of clarity and distinct expression for the
exclusion of a jurisdiction which would otherwise exist in a Scottish
Court. His
Lordship, for these reasons, repelled the plea of no jurisdiction tabled by the
ship owners. The pursuers' claim related,
inter alia, to the repayment of
freight charges made in respect of a voyage which was abandoned by the ship
owners. There was provision in the
charterparty that advance freight was not to be recovered in certain events,
but the pursuers claimed that none of these events was applicable and that, in
particular, the ship owners had been in breach of contract. The pursuers put forward an alternative
argument that, esto the ship owners
were not in breach of contract, the charterparty had been frustrated and that
on that basis the advance freight was repayable under the condictio causa data causa non secuta. The pursuers also averred, and claimed, that
certain sums held in account with the second defenders, the ship owners'
bankers were the property of the pursuers and were held in constructive trust
for them. The first defenders, the ship
owners, argued that the prorogation clause did not cover claims based on the condictio and constructive trust. In so doing they appeared to have relied on
certain dicta in the cases of Union of India v EB Aaby's Rederi A/S (1975) A.C. 797 and Fillite (Runcorn) Limited v Aqua-Lift
(1989) 45 B.L.R. 27. As has
been seen, the Lord Ordinary decided the questions of jurisdiction on
other points, but at page 1063 I-J, he did say this:
"Had I been
persuaded that cl 40 was an effective prorogation of the jurisdiction of the
English Courts, I would have been inclined to hold that its language - 'All
disputes arising out of this contract' - is not apt to cover more than the
pursuers' contractual claims. In light
in particular of what was said in Union
of India and Fillite I would have
held that it did not cover the unjust enrichment claim or the constructive
trust claim. In the event, however, that
issue does not arise."
[8] Counsel
for the defenders, in the present case founded heavily on those dicta, albeit that he recognised that they
were obiter, as being equally
applicable in the present case, and if correct, he said, they had the effect
that the pursuers' action, as framed, did not engage the prorogation clause in
question. Counsel then referred the
Court to further terms and conditions of the contract which the pursuers assert
govern the transactions to which the present proceedings relate. They are 6/87 of process. At page 1 of Section 6 of the terms
and conditions "the Order" is defined to mean "the order printed on an official
numbered purchase order form of 'Mackays Stores Limited' or on a computer
generated form on official Company letterhead".
"The Contract" is defined as meaning "the Contract for the supply of
goods and or services between the Company and the Supplier". After having referred to certain other
provisions in the terms and conditions of supply, counsel for the defenders
submitted that none of these applied to the claim being made by the pursuers in
the present proceedings. He did
recognise, however, that at page 3 of Section 6 and at Schedule 2 of the
terms and conditions, the possibility of discounts on the price of goods
supplied is expressly adverted to.
Furthermore, he accepted that a layman would probably regard the present
dispute as one regarding the payment of the contract price. Counsel, however, submitted that the question
was whether the "legal basis" of the claim, as presently formulated, fell
within the scope of the prorogation clause as arising out of the order, the contract
or delivery of the goods. That question,
he contended, fell to be answered in the negative. Counsel sought to obtain some support for
this contention from certain provisions of the Civil Jurisdiction and Judgments
Act 1982 and the interpretation placed on these in certain authorities. The relevant provisions of the 1982 Act are
to be found in Schedule 4 thereof.
Article 1 of Schedule 4 provides:
"Subject to the rules of this Schedule, persons domiciled in a part of
the United Kingdom
shall be sued in the Courts of that part."
Article 3(a), however, provides that a person domiciled in a part of the
United Kingdom
may, in another part of the United Kingdom,
be sued -
"in matters
relating to a contract, in the Courts for the place of performance of the
obligation in question."
The case of Kleinwort Benson Ltd v Glasgow
City Council (1999) 1 AC 153 was concerned with the construction and
interplay of those provisions, as they then appeared in Schedule 4 as
Articles 2 and Articles 5(3) respectively. In the Kleinwort Benson
case the plaintiff bank entered into certain interest rate swap transactions
with the defendant Scottish local authority.
The transactions were subsequently held by the House of Lords to be ultra vires and void. The bank then brought an action in England
claiming restitution of the claims paid to the local authority on the ground of
unjust enrichment. The authority applied
to have the action struck out on the ground that, under Article 2 of
Schedule 4 to the 1982 Act, which provided for the allocation within the United
Kingdom of jurisdiction, any claim against
them had to be brought in the Scottish Courts.
A majority of the House of Lords held that a claim for restitution
of monies paid under a purported contract, subsequently accepted by both
parties as being void ab initio, did
not fall within Article 5(1) of Schedule 4 to the Act of 1982 (which is
now Article 3(a) of Schedule 4) as being "a matter relating to a
contract" and that since it was not a matter relating to tort or delict the
defendants had to be sued in the country of their domicile. That decision, counsel for the defenders
submitted, gave a clear indication as to how to approach the question raised in
the present case. Reference was also
made to the case of Eddie v Alpa S.R.L. 2000 S.L.T. 1062 in which
the decision in Kleinwort Benson
was followed. In that last mentioned
case a Scottish company sought to sue, in Scotland,
two Italian manufacturers, domiciled in Italy,
for damages for breach of contract and reimbursement of monies overpaid. In doing so they sought to rely on
Article 5 of Schedule 1 to the 1982 Act which provided that 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". The Lord
Ordinary held, inter alia, that,
where a pursuer was relying on the special and derogative provisions of
Article 5, he had to be able to set out a sufficient exposition of the
contractual terms to show that there was a stateable basis for maintaining that
the place of performance was in the territorial jurisdiction of the court in
question and that in that case the pursuer had failed to show that there was a prima facie case for the special
jurisdiction. Moreover, the Lord
Ordinary held that in relation to the conclusion for repayment of monies, this
was a claim which "truly seeks restitution of money paid in error". The Lord Ordinary, in those circumstances,
held that the decision in the case of Kleinwort
Benson was in point and that since the claim was not a claim "based on
contract" there was no jurisdiction in Scotland,
under the 1982 Act, in respect of that claim directed against domiciled Italian
bodies. Relying on the decisions in
those cases, counsel for the defenders, under particular reference to the
pursuers' averments in Article 2 of condescendence, submitted that the
pursuers' claim was in respect of money paid in error and therefore was a claim
for restitution. Such a claim, by
analogy with the approach of the House of Lords in the Kleinwort Benson case and of the Lord
Ordinary in the Eddie case, was not
covered by the wording of the prorogation clause.
The Pursuers' Reply
[9] In
reply, Mr Connal for the pursuers submitted that the answer to the question
raised in the debate before me depended on what was intended to be covered by
the parties in using the wording they employed in the clause in question. Mr Connal submitted that what was before
the Court for determination fell squarely within the phrase "a dispute or
difference of whatsoever nature arising out of the order, the contract or the
delivery of the goods" because the dispute or difference was whether or not the
pursuers were entitled to discounts under the contractual arrangements obtaining
between the parties. That was the first
issue focused in the action. The
pursuers contended that they had been entitled to such discounts. The defenders contended that they were not
entitled to such discounts in the circumstances. If the pursuers were correct then they, in
error, had paid more for the goods in question than they should have, the
question then would arise as to what their remedy should be. But the first "part of the case" was to
resolve the dispute as to entitlement to the discounts. The proper approach to the construction of a
prorogation jurisdiction clause, like the one before the Court, in the present
case, was set out in the case of McGowan v
Summit at Lloyds 2002 S.C. 638. In
that case, an Extra Division had held that the same canons of construction fell
to be applied to jurisdiction clauses as to any other mutual contract provision
and the words in such a provision had to be construed "in accordance with their
natural meaning and in the light of the surrounding circumstances in which the
contract was made" - see the Opinion of the Court at page 659. The remarks of Lord Macfadyen in the Artibell case were clearly obiter and made in a context quite
different from the present case.
Moreover the decision of the House of Lords in the Kleinwort Benson case was dealing with a different question from
that which arose on the present case. It
was concerned with whether the claim which was being pursued in that action was
one which was covered by the wording of the relevant provisions of the 1982
Act. It was not concerned with the
construction of a mutually agreed prorogation clause. It was to be noted, in any event, that in the
Kleinwort Benson case the majority
did not even exclude the possibility that certain restitutionary claims connected
with a contract might attract the relevant provisions. The de
quo of the approach of the majority was that the contract in question had
been void ab initio. That was not the position in the present
case. The defenders' arguments relating
to jurisdiction should be rejected and the case put out By Order for discussion
as to further procedure, including the possibility of the pursuers amending
their pleadings regarding the merits of the case.
Decision
[10] I agree with Mr Connal for the pursuers that the law which is
directly in point in relation to the matters discussed before me is that which
was applied in the case of McGowan v Summit at Lloyds, that is, the question
raised is one of construction of the agreed prorogation clause and that the
canons of construction to be applied are those which are applicable to any
mutual contract provision. The cases
based on the jurisdictional rules set out in the 1982 Act, where there is no
prorogation clause, are not in point. In
the present case, it is not suggested by the defenders that the legal
relationship between the parties was not based on a course of contractual
dealings between the parties. The action
relates, in ordinary language, to a dispute between the parties as to whether
certain discounts fell to be applied, as a matter of contract, to the prices to
be paid by the pursuers in respect of certain goods supplied to them during
that course of dealing. In other words
there is a dispute as to the true contractual price which had to be paid for
these goods. The defenders take their
stance that no such discounts were due under the contract (see answers 3,
5 and 6). They do not take their stance,
even on an alternative basis, that whereas the discounts might have been due,
nevertheless any money paid over by the pursuers was paid to them as a result
of a unilateral, uninduced error on the part of the pursuers. The de
quo of the action is that there is a dispute between the parties as to
whether or not discounts fell to be made under the contract in question in
relation to the goods in question. The
question of what remedy (if any) the pursuers are entitled to, if the answer to
that first question is in the affirmative, is consequential or ancillary to
that dispute being resolved in the first place. The pursuers seek to have that dispute resolved. If the approach to the question, as I have
held it to be, is to look at the wording of the relevant clause and to give to
that wording its ordinary meaning, I find it difficult to reach any other
conclusion, but that parties intended, by using that wording, that the very
sort of difference of dispute which has arisen between them, namely whether or
not the pursuers were entitled to pay only discounted prices in relation to the
relevant goods, was to be resolved by the Scottish Courts. Any suggestion that a more restricted, narrow
or technical interpretation falls to be applied to the clause, is, in my view,
negatived by the fact that the parties used the words "of whatsoever nature"
and included references not only to the contract but to the order and delivery
of the goods. Counsel for the defenders,
as has been previously noted, accepted, in discussion, that a layman would
probably reach the view that the words fell to be read as conferring
jurisdiction on the Scottish Courts to deal with the issue raised in the
present proceedings. I would go further
and hold that commercial parties contracting, in circumstances like the parties
to the present action, would have intended the wording of that clause to have the
same effect. The defenders' argument, in
my judgment, focused too exclusively, on the remedy being sought by the
pursuers, rather than applying the usual canons of construction to the wording
of the relevant clause itself. That
approach was, in my judgement, also wrongly influenced by the decision in the
case of Kleinwort Benson. The House of Lords in Kleinwort Benson were concerned with considering whether the
language of the relevant provisions of the legislation was met so as to confer
jurisdiction against the defendants in the English Courts as the plaintiffs
contended. The present case is concerned
with a different question viz, does
the agreement of the parties mean that they have prorogated the jurisdiction of
this Court to deal with and to determine the issue now raised by the
pursuers. The decision in the Kleinwort Benson case, therefore, is of
no direct assistance in relation to the question raised before this Court. That question, as I have already indicated,
has to be determined applying the ordinary rules of contractual construction in
relation to mutual contracts. In any
event, I am not persuaded that, even if it were appropriate to have regard to
the decision in Kleinwort Benson for
present purposes, and to seek to apply its reasoning to the present case by
analogy, it would provide the defenders with any great assistance. It is clear, beyond doubt, that the majority
of the House of Lords reached the decision they did on the fundamental point
that, in that case, both parties were in agreement, at least by the time the
matter came before the House of Lords that, "contract" had been void ab initio. For example, Lord Clyde, at page 181,
after an analysis of the relevant language in the Brussells Convention and, in
particular, Article 5(1) focused on the words "relating to". His Lordship, in that context, said:
"the present
participle indicates that there is a relationship still continuing between the
current issue and a contract. The
contract is not a matter of past history forming the background to the current
controversy but is still of present relevance.
Furthermore, the reference to 'a' contract appears to envisage an identifiable
agreement."
His Lordship later on in the same
page said:
"... the later
words of article 5(1) in the courts for the place of performance of 'the
obligations in question' are of considerable importance. The use of the definite article shows that
there is a particular obligation to be performed. Moreover the reference is to 'the obligation
in question'. That is a reference not to
the contract but to the obligation which is at the heart of the dispute. That obligation is the obligation on which
the claim is based. There must be an
obligation to be performed and the obligation must be in dispute. I can see no other obligation which could
here be intended than an obligation based on contract. The 'question' concerns a contractual
obligation. The existence of a contract
then becomes an essential element. And while
the question may appear in a variety of forms essentially at the heart of the
dispute will be a consideration relating to its performance. It can then be seen that the later words
demonstrate the narrow scope of the phrase 'relating to'. It is not every connection with a contract
however remote or tenuous which is intended here. The relationship is one whereby the matter is
based on a contractual obligation. In my
view it is essential for jurisdiction to lie under article 5(1) that there
should be at the heart of the proceedings a dispute about the performance of a
contractual obligation. If there is no
obligation because there has never been a contract then there is no
jurisdiction under the article."
At page 182 his Lordship continued:
"Where on the
other hand there has undoubtedly ... been a contract constituted and the court
has the jurisdiction under article 5(1) the court should be able to deal
not only with such issues as whether the obligation is still enforceable or
indeed whether the contract is still extant but also with any claims which
arise consequentially on the determination of any issue about performance, such
as damages or an award quantum meruit". (Emphasis added).
That last quoted dictum would, it appears to me, to be
rather against the approach put forward by the defenders in the present case if
drawing on the Kleinwort Benson case
is appropriate for the present discussion.
In the speech of Lord Hutton in Kleinwort Benson
the factor of the non-existence of any contract being crucial to the majority
decision in that case was further emphasised.
At page 191, his Lordship, in considering the European jurisprudence on
the interpretation of the relevant Brussels Convention provisions said:
"A further
consideration referred to by the European Court is that the reason why under Article 5(1)
a court for the place of performance of the contractual obligation is given
jurisdiction is that the bringing of an action in such a court will enable the
action to be brought in an efficacious way and the place of performance of the
contractual obligation will be a place where the case can conveniently be heard
... . However in the present case this consideration
is not applicable and the 'particularly close connecting factor' between the
dispute and the English court does not exist, because the action is brought,
not to enforce a contract performed in England, but to recover moneys which are
repayable to the plaintiff because the contract never existed and because the
plaintiff cannot seek to enforce it. In
this case where Kleinwort is suing Glasgow,
domiciled in Scotland, for the repayment of moneys unjustly retained by Glasgow,
there is no 'particularly close connecting factor' between the dispute and the court
in England
which justifies departure from the general principle that the defendant should
be sued in the place of its domicile."
What those passages, just cited,
and the speeches of the majority as a whole in the Kleinwort Benson case, once they are carefully considered, show is
that the ratio decidendi of their
Lordships' decision is of no direct assistance, even by analogy, in determining
the question in the present case and, as I have noted, one passage from the
speech of Lord Clyde, at least, appears to me to be inconsistent with the
kind of argument advanced on behalf of the defenders.
[11] The defenders, of course, relied on the obiter dicta of Lord Macfadyen in the Artibell case. His Lordship
referred, in the passage in question, to two cases, namely Union of India v E.B. Aaby's
Rederi A/S (1975) A.C. 797 and Fillite
(Runcorn) Limited v Aqua-Lift (1989) 45 B.L.R. 27. Neither of those cases, however, was analysed
in any detail in the Opinion of the Lord Ordinary. There was no need for him to do so as he had
decided the case on other grounds. An
analysis of those decisions, however, in my judgment, establishes that they do
not, in fact, support the defenders' position adopted before this Court. In the first place, I remind myself that the
wording of the relevant clause in the present case contains the expression "Any
dispute or difference of whatsoever nature" and the phrase "arising out of the
order, contract or delivery". The English
authorities, as well as will be seen, have drawn a distinction between the
phrase "disputes arising out of a contract" and "disputes arising under a
contract" where they appear in arbitration clauses or otherwise fall to be
considered in relation to certain jurisdictional questions. In the Fillite
case, the arbitration clause in the relevant contract provided "any dispute or
difference or question arising under these Heads of Agreement shall be referred
to a single arbiter... ." One of the
parties to the action sought to invoke that clause in relation to claims based
on express and implied terms of the contract, negligent mis-statements and
misrepresentations, and claims based on "an express oral guarantee or warranty"
and lastly, claims based on "a collateral contract". The Court of Appeal held that the claims
based on negligent mis-statements and misrepresentations being claims based in tort were not covered by the particular
arbitration clause as not "arising under the Heads of Agreement". They also reached the same view regarding the
claims based on oral guarantees or warranties and collateral contracts. It seems to me reasonably clear, however, that
the approach of Slade L.J., who gave the leading judgment, would have been
different had the wording in the clause been "any dispute or difference or
question arising out of these Heads of Agreement". The judge, at first instance, in that case,
had held that the words "arising under" fell to be given a wide meaning namely
"arising out of" or "connected with", (see page 41 of the judgment of
Slade L.J). Slade L.J.,
however, in relation to the approach of the judge of first instance said this:
"I respectfully
disagree with his view that the phrase 'arising under' can properly be read as
meaning 'arising under, out of or connected with'. As Lord Brandon of Oakbrook recognised in the
Antonis P Lemos, (1985) 1 A.C.
711 at p. 727, on the ordinary and natural meaning of words the expression 'connected
with' is wider than 'arising under'."
The full dictum to which Slade L.J. was referring to in the speech of
Lord Brandon was as follows:
"I would readily
accept that in certain contexts the expression 'arising out of' may, on the
ordinary and natural meaning of the words used, be the equivalent of the
expression 'arising under', and not that of the wider expression 'connected
with'. In my view, however, the
expression 'arising out of' is, on the ordinary and natural meaning of the
words used, capable, in other contexts of being the equivalent of the wider
expression 'connected with'. Whether the
expression 'arising out of' has the narrower or the wider meaning in any
particular case must depend on the context in which it is used."
The Antonis P Lemos case involved the House of Lords considering one of
its previous decisions, namely the Union
of India case, referred to above, which is one of the two cases referred to
by Lord Macfadyen in his obiter dicta. In the Union
of India case, two of their Lordships in the House of Lords,
Viscount Dilhorne and Lord Salmon, at pages 814 and 817, respectively,
referred to the dictum of
Lord Porter in the earlier decision of the House of Lords in Heyman v Darwins Ltd (1942) A.C. 356 at 358 to the effect that the words
"arising out of a contract" had a wider meaning than the words "under a
contract". Both of their Lordships had
difficulty in discerning a difference in the meaning of these two phrases. These observations, however, appear to have been
obiter dicta and, in any event,
Lord Brandon in the Antonis P Lemos
case, in giving the judgement he did, which was agreed with in its entirety by
all of the other judges of the House of Lords, decided that there could be a
difference in the meaning of these phrases, depending on the context. It follows that close consideration of the
two cases referred to in Lord Macfadyen's obiter dicta do not, in my view, give the defenders the support for
the position they argued for in the present case.
[12] In the result, I am satisfied that by applying the ordinary
rules of construction to the words used in the prorogation clause in the
present case, one arrives at the result that the parties intended by those
words that a dispute of the kind that has arisen between them and which
requires judicial determination should be made subject to the jurisdiction of
the Scottish Courts. The "dispute" once
properly identified as such, on the ordinary meaning of words, is one arising
out of the contract.
[13] For the foregoing reasons I reject the defenders'
arguments. In the circumstances I shall
have the case put By Order for discussion of further procedure in the case.
