GPA Group Plc v Governor and Company of the Bank of Ireland

• Jurisdiction: Ireland
• Judge: Keane J.
• Judgment Date: 30 October 1992
• Neutral Citation: 1992 WJSC-HC 3675
• Docket Number: ???query???No. 519 P???/1992,[1992 No. 5991P]
• Court: High Court
• Date: 30 October 1992

1992 WJSC-HC 3675

THE HIGH COURT

???query???No. 519 P???/1992

GPA GROUP PLC v. BANK OF IRELAND

BETWEEN

GPA CROUP PLC

PLAINTIFFS

AND

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND AND THE EUROPEAN ORGANISATION FOR THE SAFETY OF AIR NAVIGATION (EUROCONTROL)

DEFENDANTS

Citations:

MULTILATERAL AGREEMENT RELATING TO EN ROUTE CHARGES BRUSSELS 1981 S64.2.a

AIR NAVIGATION (EUROCONTROL) ACTS 1963 – 1983

JURISDICTION OF COURTS & ENFORCEMENT OF JUDGMENTS (EUROPEAN COMMUNITIES) ACT 1988

MULTILATERAL AGREEMENT RELATING TO EN ROUTE CHARGES BRUSSELS 1981 S64

MULTILATERAL AGREEMENT RELATING TO EN ROUTE CHARGES BRUSSELS 1981 S64.1

MULTILATERAL AGREEMENT RELATING TO EN ROUTE CHARGES BRUSSELS 1981 S64.2

JURISDICTION OF COURTS & ENFORCEMENT OF JUDGMENTS (EUROPEAN COMMUNITIES) ACT 1988 S3

BRUSSELS CONVENTION ART 2

BRUSSELS CONVENTION ART 17

BRUSSELS CONVENTION ART 12

BRUSSELS CONVENTION ART 15

BRUSSELS CONVENTION ART 16

MEETH V GLACETAL 1978 ECR 1671

KURZ V STELLA MUSICAL VERANSTALTUNG GMBH 1991 3 WLR 1046

BRUSSELS CONVENTION ART 21

BRUSSELS CONVENTION ART 22

BRUSSELS CONVENTION ART 23

EDWARD OWEN LTD V BARCLAYS BANK 1978 QB 159

UCM (INVESTMENTS) V ROYAL BANK OF CANADA 1982 2 AER 724

HIBERNIA MEATS V TRINITY BANK UNREP 16.2.84 KEANE 1984/4/1352

R D HARBOTTLE (MERCANTILE) LTD V NATIONAL WESTMINSTER BANK LTD 1978 QB 146

WALEK & CO V SEAFIELD GENTEX LTD 1978 IR 167

UNIFORM CUSTOMS & PRACTICE FOR DOCUMENTARY CREDITS 1983 REVISION PUBLICATION 400 ICC PARIS

Synopsis:

BANKER

Letter of credit

Payment - Demand - Certificate - Duty - Discharge - Obligation to pay on receipt of demand certificate - Irrelevance of disputes between customer and third party - Interlocutory injunction - Payment pursuant to international commercial document not restrained - Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988, ss. 2, 3, 1st schedule, article 17 - (1992/5991 P - Keane J. - 30/10/92) - [1992] 2 I.R. 408

|GPA Group Plc. v. The Governor and Company of the Bank or Ireland|

INJUNCTION

Interlocutory

Letter of credit - Payment - Restraint - Refusal - International commercial document - Demand procedure apparently in order - Defendant bank obliged to pay on foot of demand - Policy of courts to facilitate implementation of such credits - (1992/5991 P - Keane J. - 30/10/92) - [1992] 2 I.R. 408

|GPA Group Plc. v. The Governor and Company of the Bank or Ireland|

WORDS AND PHRASES

"Letter of credit"

Payment - Demand - Banker - Duty - Courts - Policy - Internation commercial document - Implementation - (1992/5991 P - Keane J. - 30/10/92) - [1992] 2 I.R. 408

|GPA Group Plc. v. The Governor and Company of the Bank of Ireland|

1 Judgment delivered the 30th day of October 1992 by Keane J.

2 The plaintiffs (hereafter "GPA") are a company based in Shannon who operate a worldwide business of leasing aircraft. The second named defendants (hereafter "EUROCONTROL") are an organisation based in Brussels who are responsible for (inter alia) the safety of air navigation and the collection of route charges for en route navigation facilities and services. Ireland is a party to the several international agreements concerning EUROCONTROL, including the Multilateral Agreement Relating to En Route Charges signed at Brussels on 12th February 1981. Statutory force has been given to the agreements to the extent provided by the Air Navigation (EUROCONTROL) Acts 1963to 1983and the regulations made thereunder.

3 The present proceedings and this application are part of a continuing dispute between GPA and EUROCONTROL as to the collection of route charges. They arise immediately out of the detention at various airports in the United Kingdom of five Boeing 737 aircraft which GPA had leased to a Spanish airline company called Hispania Lineas Areas SA (hereafter "Hispania"). Hispania, it would appear, had failed to pay the relevant route charges and the aircraft were in consequence detained by the United Kingdom Civil Aviation Authority pursuant to Article 11a of the United Kingdom Civil Aviation (Route Charges for Navigation Services) Regulations 1989. On the same day, Hispania filed for bankruptcy with a court in Palma de Mallorca, Spain.

4 Following discussions between representatives of GPA and EUROCONTROL, the latter agreed to release the aircraft on the furnishing by GPA of a letter of credit in the sum of US$ 3,000,000. A letter of credit drawn on the first named defendants (hereafter "the Bank") having been duly furnished by GPA, the aircraft were released by the United Kingdom Civil Aviation Authority. Further discussions then took place between GPA and EUROCONTROL, during the course of which the former maintained that the operator alone - in this case Hispania - was responsible for route charges and the latter claimed that once the charges were incurred they were entitled to recoup themselves, in the event of a default by the operator, out of the proceeds of sale of the aircraft. No agreement was reached between the parties and thereupon GPA, because of what they said was their concern as to the possible seizure of their aircraft in similar circumstances by EUROCONTROL in Ireland, issued proceedings in this country claiming that the legislation corresponding to the UK regulations was unconstitutional. EUROCONTROL were named as additional defendants in those proceedings and leave was given by this court for service of notice of the proceedings on them out of the jurisdiction. However, on 25th January, 1992, Costello J. discharged the order on the ground that EUROCONTROL was neither a necessary nor a proper party to the proceedings. A declaration was also sought in those proceedings that no monies were payable on foot of the letter of credit and the Bank was subsequently joined in those proceedings.

5 Following the discharge of the order permitting service of notice of the proceedings upon them, EUROCONTROL demanded payment of the route charges incurred by Hispania from GPA. The latter were concerned that, if such payment was not made, EUROCONTROL would seek to recover payment from the Bank on foot of the letter of credit and sought assurances that this would not happen, which were not forthcoming. On 16th September 1992, GPA were informed by the Bank that a demand certificate in purported compliance with the letter of credit had been received from EUROCONTROL and following further correspondence between GPA and the Bank, in which the latter indicated that they could not indefinitely postpone payment on foot of the letter of credit, these proceedings were issued in which it is claimed that the demand certificate issued by EUROCONTROL does not comply with the letter of credit. On the 18th September, an interim injunction was granted to GPA restraining the Bank from making payment on foot of the letter of credit and the present application for an interlocutory injunction in the same terms pending the trial of the action came on for hearing before me on October 7th last. In the meantime on 23rd September, EUROCONTROL issued proceedings in the English High Court against the Bank claiming payment of the amount alleged to be due to them on foot of the letter of credit.

6 Mr. Owens on behalf of the Bank said at the outset that his clients disputed the jurisdiction of this court to entertain the proceedings and made it clear that his submissions as to the merits of the application were without prejudice to that contention. It is accordingly appropriate to consider the position as to jurisdiction before proceeding further.

The Jurisidiction of the Court.

7 Mr. Owens submits that the terms of the "revolving credit" agreement between GPA and a number of financial institutions under which the letter of credit was issued, as construed in the light of the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act 1988(hereafter "the 1988 Act"), operate to confer exclusive jurisdiction to resolve the dispute, the subject matter of the present proceedings, on the English courts. Mr. McDonald on behalf of GPA, submits that the term in question, although it admittedly confers jurisdiction on the English courts, does not purport to exclude the jurisdiction of the Irish courts and that the Irish courts are the appropriate forum to resolve the dispute both in the light of the 1988 Act and as the forum conveniens.

8 The relevant provisions of Clause 64 of the Agreement is as follows:-

9 "Law, Jurisdiction

64.1 Choice of Law

10 This Agreement is governed by, and shall be construed in accordance with, the laws of England.

64.2 Submission to Jurisdiction

11 (a) For the benefit of the Participants, each of the Borrowers irrevocably agrees that:-

12 (i) the courts of England are to have jurisdiction to settle any disputes which may arise in connection with the legal relationships established by this Agreement or otherwise arising in connection with this Agreement;

13 (ii) this provision shall not prevent the conduct of proceedings in any other court of competent jurisdiction".

14 Although the agreement provides that it is to be construed in accordance with English law, it was not suggested that the absence of expert evidence as to what the relevant English law was presented any barrier to the court's determining the question as to jurisdiction.

15 These provisions do not of themselves purport to confer exclusive jurisdiction on the English courts: they appear to envisage that, while those courts are to have jurisdiction, the jurisdiction of other competent courts is not excluded. However, the Agreement must be read in the light of the 1988 Act which gave effect in Ireland to the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. Mr. McDonald initially submitted that the 1988 Act did not apply to the present dispute which related essentially to the collection of...