Leo Laboratories Ltd v Crompton BV (formerly Witco B.v)

JurisdictionIreland
JudgeMr. Justice Fennelly
Judgment Date12 May 2005
Neutral Citation[2005] IESC 31
Docket Number[S.C. No. 56 of 2004]
CourtSupreme Court
Date12 May 2005

[2005] IESC 31

THE SUPREME COURT

Geoghegan J.

Fennelly J.

Kearns J.

No. 2003/02728p
Appeal No. 56/04
LEO LABORATORIES LTD v CROMPTON BV (ORSE WITCO BV)

BETWEEN

LEO LABORATORIES LIMITED
Plaintiff/Respondent

and

CROMPTON BV (formerly WITCO BV)
Defendant/Appellant

BRUSSELS CONVENTION ART 5(1)

EEC REG 44/2001 ART 5(3)

EEC REG 44/2001 ART 27

EEC REG 44/2001 ART 28EEC REG 44/2001 ART 23

LIABILITY FOR DEFECTIVE PRODUCTS ACT 1991 S2

EEC DIR 85/374EEC REG 44/2001 ART 2.1

KRONHOFER v MAIER & ORS 2004 ECR 1

VEREIN FUR KONSUMENTENINFORMATION v HENKEL 2002 ECR I-08111

HANDBRIDGE LTD v BRITISH AEROSPACE COMMUNICATIONS LTD 1993 3 IR 342

BIER v MINES DE POTASSE D'ALSACE 1976 ECR 1735

MARINA v LLOYDS BANKPLC 1995 ECR I-2719

LIABILITY FOR DEFECTIVE PRODUCTS ACT 1991 1(1)

CLARE TAVERNS T/A DURTY NELLYS v GILL T/A UNIVERSAL BUSINESS SYSTEMS 2000 1 IR 286 2000 2 ILRM 98

BIO-MEDICAL RESEARCH LTD T/A SLENDERTONE v DELATEX SA 2000 4 IR 307 2001 2 ILRM 51

LEATHERTEX DIVISONE SINTETICI SPA v BODETEX BVBA 1999 1 ECR 6747

BRUSSELS CONVENTION ART 17THE TATRY v MACIEJ RATAJ 1994 ECR I-5439

DITTA ESTASIS SALOTTI DI COLZANI AIMO E GIAMANO COLZANI v RUWA POLSTEREIMASCHINEN GMBH 1976 3 ECR 1831

CONTINENTAL BANK NA v AEAKOS CIA NAVIERA SA 1994 1 WLR 588

GULLIVER v BRADY & ORS T/A MATHESON ORMSBY PRENTICE UNREP SUPREME 19.12.2003 2003/25/5778

TREATY ESTABLISHING THE EUROPEAN COMMUNITY ART 234

CONFLICT OF LAWS: jurisdiction

Jurisdiction Brussels regulation - Contract - Exclusive jurisdiction clause - Negligence - Place where harmful event occurred - Proceedings in Netherlands and Ireland - Whether exclusive jurisdiction clause within terms of art 23 - Whether action in contract or tort - Whether harmful event occurred at origin of damage or place of damage - Whether actions related - Whether Irish court had jurisdiction - Estasis Salotti v RÜWA [1976] ECR 1831 and Bio-Medical Research Ltd v Delatex SA [2000] 4 IR 307 followed - Council Regulation EC/44/2001, arts 5, 23 and 28 - Stay granted

CONTRACT: terms

Exclusive jurisdiction clause - Interpretation - Whether clause part of contract - Whether clause incorporated by course of dealings despite absence of written confirmation - Whether clause provided for exclusive jurisdiction - Whether clause referred to claims other than contractual claims - Continental Bank v Aeokos SA [1994] 1 WLR 588; Clare Taverns v Gill [2000] 1 IR 286 and Gulliver v Brady (Unrep, SC, 19/12/2003; [2003] IESC 68) followed - Stay granted (56/2004 - Fennelly [nem diss] Geoghegan Kearns - 12/5/2005) [2005] IESC 31

LEO LABORATORIES LTD v CROMPTON BV (ORSE WITCO BV)

Facts: The appellant (a Dutch company) commenced proceedings in the Netherlands based on breach of contract. The respondent (an Irish company) commenced proceedings claiming damages for negligence. This was an appeal from the High Court order refusing the motion of the appellant for an order that the court decline jurisdiction pursuant to a number of provisions of the Brussels Regulation 2001.

Held by the Supreme Court (Geoghegan, Fennelly and Kearns JJ) in allowing the appeal that the exclusive jurisdiction clause in the general terms and conditions of sale and delivery came within Article 23 of the Brussels Regulation and consequently the jurisdiction of the Dutch proceedings was exclusive and the Court should stay the Irish proceedings. The respondent's claim in tort clearly fell within the scope of the clause.

Reporter: L.O'S.

1

Mr. Justice Fennelly delivered the 12th day of May, 2005.

2

This is an appeal from a judgment of the High Court (O'Higgins J) refusing the motion of the Appellant for an order that the court decline jurisdiction, pursuant to a number of provisions of the Brussels Regulation of 2001.

3

Council Regulation EC No. 44/2001 of 22nd December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters will be referred to as "the Brussels regulation." It replaced the Convention on Jurisdiction and Enforcement of Judgments in Civil and Commercial Matters signed at Brussels on 27th September 1968 (hereinafter "the Brussels Convention").

4

The Plaintiff Company (hereinafter referred to as "the Respondent") is an Irish company which manufactures pharmaceutical products. The Defendant company (hereinafter "the Appellant") is a Dutch company registered at Haarlem in the Netherlands. The Respondent has, for many years, supplied the Appellant with raw materials for its manufacturing business.

5

Towards the end of 1998, the Respondent placed a purchase order with the Appellant for delivery during 1999 of a total quantity of bulk molten white soft paraffin. The order consisted of a facsimile and a differently dated "purchase order." The latter indicated a delivery date of "not later than 31/12/99." One of these documents had the Respondent's Standard Printed Terms and Conditions attached, but nothing turns on this. On 24th December 1998, the Appellant replied with a form confirming acceptance of the order and stating "Delivery: to be stated through our shipping department." The form concluded:

"We thank you for your order which we have accepted as follows: subject to our general terms and conditions of sale and delivery as stated on the back hereof."

6

The Court was informed that these terms were not, in fact, printed on the back. The Respondent claims not to have been aware of the actual printed terms.

7

On or about 1st March 1999, the Respondent placed an order for a specific quantity. Delivery took place in or about the month of April 1999.

8

The Respondent claims that the product was found to be contaminated with gas oil or diesel oil, when incorporated into its pharmaceutical product and that it affected its production process causing it loss and damage.

9

The parties are not agreed upon the terms of trading between them and in particular as to whether the Appellant's printed conditions formed part of their trading relationship. This controversy relates to one of its provisions concerning jurisdiction. I will discuss the matter at a later point in this judgment.

10

It is agreed that the Appellant was to deliver the product to a ship in the Netherlands, carriage and insurance paid, for transport to tankers in Dublin Port. The parties are not agreed as to whether this means that delivery takes place in the Netherlands or in Ireland. However, that is probably most relevant to the claim of the Appellant in contract and, as will be seen, the courts of the Netherlands have decided that the courts of that country have jurisdiction.

11

On 25th June 1999, the Respondent wrote to the Appellant complaining of the alleged contamination of the product and stating that it was looking to the latter to compensate it in full for the losses arising. It is not appropriate, on this appeal, to discuss the merits of this claim, which was the subject of further correspondence, except to say that the Appellant, as conveyed in letters in 1999, denied liability. It also gave notice of its intention to rely on "Witco B.V's standard Terms and Conditions of Sale, relevant to this case and which are known to you." It referred especially to a term from those conditions limiting its liability to "the net invoice amount relating to the Claimed Product." The Respondent, in its letter of reply dated 7th January 2000 made no reference to the claimed reliance on the standard contract terms.

12

On 14th June 2000, the Appellant commenced proceedings against the Respondent by Writ of Summons of the District Court of Haarlem seeking, according to a translation exhibited in these proceedings:

13

• . A declaratory judgment of no-liability;

14

• . Alternatively, a declaratory judgment that liability is limited to the invoice value of the goods.

15

The Dutch proceedings were duly served on the Respondent on 16th October 2000 by pre-paid post to its registered office. The Respondent complains that these proceedings were designed to give the Appellant a procedural advantage. The Respondent could not now issue Irish proceedings based on breach of contract. It is not unfair to observe, however, that the Dutch proceedings issued almost one year after the original letter of complaint.

16

At the time of the institution of the Dutch proceedings, the Brussels Regulation had not yet entered into force. Since the Respondent was clearly domiciled in Ireland, the Appellant relied on the special jurisdiction in contract permitted by Article 5(1) of the Brussels Convention.

17

On 27th February 2003, the Respondent commenced the present proceedings by issuing a Plenary Summons claiming:

18

• . Damages for negligence including breach of duty and breach of statutory duty;

19

• . Damages for breaches of the Liability for Defective Products Act, 1991.

20

The Respondent has quantified its claim in its Statement of Claim at almost €3.5 million.

21

The Plenary Summons included an indorsement alleging jurisdiction pursuant to the Brussels Regulation, claiming jurisdiction by virtue of Article 5(3) thereof on the basis that "the proceedings have as their object matters relating to the Court [sic] and the place where the harmful event occurred is within the jurisdiction of this Honourable Court." It was presumably intended that the foregoing read: "relating to tort," and not "... Court ..." It also stated that the proceedings concerning this "cause of action are the sole proceedings and are not the subject matter of proceedings in any other Member State of the European Union between the parties." I have underlined the expression "cause of action."the Appellant's Dutch proceedings in contract had been in existence for more than two years.

22

The Appellant entered an appearance under protest and brought its motion contesting...

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