Jurisdiction - PowerPoint Presentation

Slide1

Jurisdiction clauses in Bills of LadingEU and Poland

Prof. Maria

Dragun

=Gertner

CMI 2016 New York Slide2

Brussels - Lugano RegimeSlide3

The uniform European rules concerning jurisdiction

agreements

are

called Brussels - Lugano regime. They consist of several instruments which have been gradually implemented.Slide4

Brussel Convention 1968 art. 17Lugano Convention 1988 art.

23

Regulation

44/2001 art. 23

Lugano Convention 2007 art. 23 Most recently Regulation 1215/2012 (recast) - art. 25Brussel Lugano Regime Slide5

The European framework for jurisdiction agreement was

initiated

by

the 1968

Brussels Convention between the then members of the European CommunityA parallel treaty between the European Community

and the

member

states of the European Free Trade Association was the Lugano Convention 1988The Brussels Convention has been replaced by the Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgement in civil and commercial matters.That Judgments Regulation was then replaced by the Regulation1215/2012(recast)Slide6

Since many of the states participating in the 1988 Lugano Convention

have

become members of the EU , this convention was revised in 2007 and now it controls the relation between the member states of the EU

and

those

states, who are party to this convention but not a member of the EU.This convention closely follows Reg.44/2001.Slide7

The EU Regulation is normally the governing instrument for European domiciled shippers in determining whether a carrier's bill of lading terms will be upheld in relation to claimed jurisdictionArt. 71 of both

Regulations

(44/2001 and

1215/2012)

provides that where there is a clash between the provisions of the Regulation and the international convention, the

convention

prevails

That might be only the case of the Hamburg Rules (The Bergen[1997])Slide8

The application of the previous art. 23 of Reg 44/2001 rested

on

two

conditions. That article provided that - at least one of the parties has its domicile in one of the Member S

tates

- the

chosen

forum is located in a Member StateIf this two conditions were not met national law appliedScope of application Slide9

1. If the parties, one or more of whom is domiciled in a State bound by this Convention,

/

Membrs

State have agreed that a court or the courts of a State bound by this Convention / Member 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 jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise3. Where such an agreement is concluded by parties, none of whom is domiciled in a State bound by this Convention/Member State, the courts of other States bound by this Convention/Member States shall have no jurisdiction over their disputes unless the court or courts chosen have declined jurisdiction.Art. 23Slide10

Outside the scope of that instrument were situations

when

:

EU

residents agree on a forum in a non Member State two non-residents enter into a jurisdiction agreement,

except

what

was provided for in art.23(3).The same regulation concerning contracting states is still provided in art. 23 of Lugano Convention 2007Scope of applicationSlide11

That provision was amended in Reg 1215/2012According

to

its

art. 25

1. If the parties, regardless of their domicile, have agreed that a court or the courts of a Member 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 jurisdiction

, unless the agreement

is null

and void as to its substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Scope of applicationSlide12

In the Reg 1215/2012 the requirement that at

least

one of the

parties

has its domicile in one of the member states is no longer providedBut the Regulation is applied only when

a

court or the courts of a Member State are

chosen

to have jurisdiction to settle the disputeScope of applicationSlide13

Brussel Convention in its pre- 1978 text of art. 17

provided

a

rule

requiring the courts of Contracting States to respect written jurisdiction agreements. Estasis

Salotti

di

Colzani Aimo e Gianmario Colzani s.n.c. v. Rüwa Polstereimaschinen GmbH "requirement

of a

writing

under

the

first

paragraph

of

Article

17 of

Convention

[…]

is

fulfilled only if the contract signed by both parties contains an express reference to those general conditions"). Partenreederei ms.Tilly Russ v. NV Haven-&Vervoerbedrijf[1984]A clause printed on the bck of a bill of lading does not constitute an agreement in writing

Form of

jurisdiction

agreement

in EU lawSlide14

That article was amended and formulated in a way which

was

repeated

in

art. 23 of Reg. 44/2001 and art.23 of Lugano Convention 1988, 2007 and art. 25 of Reg. 1215/2012Slide15

Such agreement conferring jurisdiction shall be either:(a) in

writing

or evidenced in writing; or

(b) in a form which accords with

practices which the parties have established between themselves; or(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.2. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to writing

Reg 44/2001 – art.23, Lugano

Conv

. 1988, 2007- art.23, Reg. 1215/2012 art. 25Slide16

Brussels- Lugano regime emphasises on conditions of formal validity

and

provides

that jurisdiction agreement must be concluded in writing or evidenced in three alternative forms:In writingIn a form

that

the

parties

have established between themselvesIn a form that accords with international trade usageSlide17

According to the case law of the ECJ relating to this article and concerning

the

interpretation

of the

formalities that must be satisfied in order to establish an exclusive jurisdiction clause:European law accepts jurisdiction clauses

in

bills

of

lading where those provisions reflect a genuine consent between the contracting parties to sue in a determined forum.Third party’s acceptance has to be precisely and clearly demonstratedIncorporation by reference of jurisdiction clause into a bill of lading is effective where the language

of the bill

demonstrates

clearly

and

precisely

the

consensus

of the

parties

on the

subject

matter

of the

clauseEU courts decisionsSlide18

Under the rules of the EC Jurisdiction Regulation an

exclusive

jurisdiction clause in a bill of lading will be upheld provided there is a consent, actual or deemed, to the clause,

(

Donohue

v.Armco [2001]UKHL 64Slide19

In its decision of the 9th November 2000 (

Coreck

Maritime

GMBH

v Handelsveem BV- Case 387/98) and in Trasporti Castelletti Spedizioni

Internazionali

SpA

v. Hugo Trumpy SpA [1999] Case – 159/97) the ECJ held that a jurisdiction clause agreed in a bill of lading contract between a shipper and a carrier will be binding on a third party receiver only if the latter succeeds to the rights and obligations of the shipper pursuant to the applicable national law.If not courts subject the validity of the clause to evidence that it has been accepted by the shipper or receiver.Slide20

The ECJ in its several decisions

reafirmed

the

essential

importance of a genuine agreement between the parties The clause could not be binding on a shipper or receiver absent strict proof that the latter had accepted the clause. Such evidence would normally oblige the carrier to demonstrate the approval of the clause by the signature of the bill of lading by the shipper

.

The

rule

was applied also to B/L jurisdiction clauses confirming a previous oral agreement between them and to clause forming part of the steady business relations between the parties. (The Tilly Russ [1984])Slide21

However court decisions concerning

the third

alternative

: a form

that accords with the international trade usage, are not uniform.Slide22

The main question is if

it

is

essentially stated in the above mentioned provisions that in international commerce an agreement on jurisdiction, which is in conformity with the custom of the branch of trade in question, will be valid without requiring evidence that the parties have specifically approved the clause in question.

Is

it

the case of jurisdiction clause in a bill of lading taking into account that this is the generally and regularly followed practice to insert such clauses in its provisions?Is it possible to assume or impose on the shipper or consignee of the bill of

lading

the

knowledge

of the

usage

of

introducing

jurisdiction

clauses

in

bills

of

lading

?Slide23

It is underlined by the ECJ that formalities required

by the

article

are themselves a full, perfect and a sufficient guarantee of the existance of consent or consensus but a genuine acceptance

in the

case

shall be examined for the sake of safety of contractual relationships. The existance of a formally valid clause only indicates, but does not replace, consent. Mainschiffahrts-Genossenschaft eG (MSG) v. Les Gravières Rhénanes SARL [1997] (

C-106/95

)Slide24

In Trasporti Castelletti Spedizioni

Internazionali

SpA v. Hugo Trumpy SPA [1999] C – 159/97 the ECJ held that the knowledge of the usage concerned is independent of any

specific

form of publicity

which

might be given to the standard form on which the clause appears.The existance of the usage must be established by the practice generally and regularly followed in concluding certain type of contractThe objective knowledge of the trade usage by either party to the contract is irrelevantSlide25

CMA CGM and Banque Paribas rendered in March 2013

by the

French

supreme

court the Cour de Cassation:it is customary in bill of lading contracts, maritime law being a specific branch of international commerce, that the bill of lading contract will include a clause providing that disputes shall be referred to the courts of the place of business of the carrier.

The

clause in the bill of lading in question was

therefore

perfectly valid and binding on the bank to whose order the bill of lading had been issued. Hof van Beroep te Antwerpen [2005]: it was assumed that the jurisdiction clause had been accepted by the consignee because it was „ settled practice”to insert such clauses into B/L

French and

Belgian

decisionsSlide26

Taking into

account

such

judgements the opinion that „ it is yet far

from

clear that challenges to jurisdiction clauses appearing in

standard

bill of lading terms have ceased although the task of persuading the courts that the jurisdiction clause should not be upheld is becoming increasingly difficult” may be considered legitimateSlide27

It might be also the case of PolandSome of the earlier more favourable

interpretations relative to

shippers

may not be applied in the future.Slide28

Before Poland became

the

Member

of the EU (2004) a

written form of jurisdiction agreement had

been

required by The Polish Code of Civil Procedure. (art. 1104 - prorogation , art.1105- derogation)At present both

written

and

electronic

forms

are

provided

.

According

to art. art. 1105

1 : The requirement that an agreement shall be in writing is met by an electronic communication if the information contained therein is accessible so as to be useable for subsequent referenceBill of lading jurisdiction clauses from the Polish perspectiveSlide29

art. 1105[1] Reference in the main agreement to a document which contains provisions corresponding

to a

prorogation

agreement meets the requirements concerning the form of that agreement if the main agreement is made in writing and the reference incorporates prorogation agreement into the main agreement

New

provision

of The

Polish Civil Procedure CodeSlide30

These provisions of The

Polish

Civil

Procedure Code are applied to cases

which

are

not covered by EU Regulation 1215/2012.As a result, there are two legal regimes concerning the form of jurisdiction agreement depending on whether the court indicated by the parties is or is not the court of the UE Member StateSlide31

Cases

concerning

the

binding

force of jurisdiction clauses have been rarely heard by the Polish

courts

. In

two

of them (I CZ 3/68);(I CZ 66/69) it was stated that:bill of lading is not an agreement, thus contained therein jurisdiction agreement does not meet requirements provided for such agreement in the Polish Civil Procedure CodeDecisions of the Polish Supreme CourtSlide32

EU Regulation is also the reason

to

drafting

the

new provision of The Polish Maritime Code stating that: „A clause contained in a bill of lading is considered as meeting the requirements of the jurisdiction agreement if its content is clearly established in the relevant provision of the contract of carriage, under which such a document has been issued and the consignee beyond any doubt agreed to be bound by such a clause”

New

drafted

provision of the Polish Maritime CodeSlide33

In 2005 the new Convention on Choice of Courts Agreement was prepared under the auspices of the Hague Conference on Private International Law

This

convention

, even if comes into force, does not apply to the carriage of goods by sea ( art.2 (f)) because some

states

would not agree to its provisions which permitted a carrier to escape the liability which Hague Visby Rules impose mandatorily by choosing the jurisdiction of another stateat the time when the Convention was adopted the details of the draft Rotterdam Rules were still being finalised.Convention on Choice of Courts AgreementSlide34

The provisions of the Rotterdam Rules on jurisdiction and arbitration

are

influenced by the jurisdiction provisions of the Hamburg RulesThe Rotterdam RulesSlide35

The relevant rule of art. 66 RR covers only those

contracts

to

which

the parties are deemed to be in need of manadatory protectionParties to volume contracts have greater, although

still

limited

, freedom of contract. (Art. 80 RR)The Rotterdam RulesSlide36

Because of divergence of the opinions on the binding force of

jurisdiction

( and

arbitration

agreements) a compromise was necessary.Art.74: The provision of the chapter 14 (jurisdiction) shall bind only Contracting States

that

declare

in accordance with article 91 that they will be bound by themThe same is stated with respect to arbitration agreement in art. 78 of RR. As a result of this solution a diversity will remain.The State DeclarationSlide37

A single EU Member State cannot override the rules

of the EC

Jurisdiction

Regulation by entering into a new international convention since competence concerning these matters has been transfered

to

that

organization by its member States.Such a declaration may be made by The EU in accordance with Art. 93.If not the relevant EU regulations would prevail over the provisions of the RR.The EU DeclarationSlide38

The legal relations connected with the jurisdiction clauses in bills of lading seems therefore deemed special.Such a conclusion

comes

also

from the inclusion of the relevant specific regulation in the Hamburg Rules and the Rotterdam RulesThese provisions are more restrictive and complex than the formalities under the EU

Regulation

Some

authors underline that jurisdiction and arbitration are essential to any acceptable future international conventionsThe above may mean that in the future the relatively liberal interpretation as to formal validity of a jurisdiction clause in the scope of the Brussel Lugano regime will be challenged.

Conclusions

on the

formal

validity

of

jurisdiction

clauseSlide39

In Reg 44/2001any questions other than a form of agreement (

substantive

questions

) remained to be governed by the applicable national contract law There were different opinions concerning the question if

:

proper

law is determined by the conflict of law rules of the forum, or proper law is determind by substantive law of lex foriSubstantive questionsSlide40

In Reg. 1215/1012 – the second solution was accepted It is

stated

in art. 25

, that

the choosen court shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State.Substantive questionsSlide41

Discussion concerns also the question of the effect of mandatory

liability

rulesSince the Hague Visby Rules do not specifically regulate jurisdiction, they do not displace the provisions of the Brussels- Lugano regimeThe effect of

mandatory

liability

rulesSlide42

In Trasporti

Castelletti

Spedizioni Internazionali SpA v. Hugo Trumpy SpA [1999] it was stated that

a

possible

violation of the national mandatory liability provisions does not render a jurisdiction agreement invalid.A public policy regulation of jurisdiction agreements would violate the aim of legal certainty which lies at the heart

of the

Brussels

-Lugano regime.Slide43

Thank you