Nestorway Limited t/a Electrographic International v Ambaflex B.V, [2006] IEHC 235 (2006)

Docket Number:2006 1141P
Judge:Clarke J.

The high court [2006 No 1141 P]

betweennestorway limited trading as electrographic international plaintiffs and

ambaflex B. v. defendant

Judgment of Mr. Justice Clarke delivered on the 19th day of July 2006

  1. Introduction

    1.1 The plaintiffs ("Nestorway") and the defendant ("Ambaflex") entered into a series of agreements providing that Nestorway should be the exclusive distributor of certain products on behalf of Ambaflex in a territory defined for the purposes of the agreement as consisting of the United States of America, the United Kingdom, Ireland and Spain ("the Territory").

    1.2 Nestorway contends that Ambaflex have wrongfully terminated the most recent agreement and have commenced proceedings seeking damages for breach of contract and appropriate injunctive relief. It would appear that Nestorway accepts that the agreement would, in the ordinary way, come to expire on 21st August, 2006. In that context Nestorway seeks an injunction restraining any termination prior to that date. In addition Nestorway seeks injunctive relief which would have the effect of preventing Ambaflex from selling the relevant products within the territory.

    1.3 The proceedings were commenced on 13th March, 2006. The plenary summons has an endorsement in which Nestorway claims that this court has jurisdiction to deal with these proceedings under Article 5(1) of Council Regulation 44/2001, ("The Brussels Regulation").

    1.4 Immediately on commencing the proceedings Nestorway also brought a notice of motion before the court seeking an interlocutory injunction. The hearing of that interlocutory injunction was initially delayed because of difficulties with service. Thereafter Ambaflex entered a conditional appearance on 9th May, 2006, and brought a motion contesting the jurisdiction of this Court to deal with the matter. On that basis the application for an interlocutory injunction was adjourned from time to time to allow for the argument and determination of the jurisdiction issue. This judgment is directed towards that jurisdiction of issue. In the context of the issue which I have to decide it is, therefore, necessary to turn to the agreement which is the subject of these proceedings and certain surrounding facts.

  2. The Facts

    2.1 The parties entered into two agreements previous to the agreement which is the subject of these proceedings. Those predecessor agreements were, to a significant extent, in the same form as the agreement whose termination is now disputed. Nothing now turns on those agreements. However the agreement which is sought to be enforced by Nestorway is in writing and is stated to be dated "11th (sic) of June, 2001, (back working force)".

    2.2 On its face the agreement was signed on 22nd August, 2001 on behalf of both parties. The agreement is stated to be effective for a period of five years "from the date hereof". There is, amongst other things, a dispute between the parties as to when that five year period commenced and when, therefore, it expired. Nestorway contends that the five year period commenced on the signing of the agreement and thus expires on 22nd August, 2006. Ambaflex contend that, by particular reference to the phrase "back working force" it was intended to confirm that the agreement commenced on 1st June, 2001, (despite being signed later) and thus would have expired in the ordinary way on 1st June, 2006.

    2.3 Two further aspects of the agreement require to be noted. Firstly the agreement expressly provides for the application of Dutch law. Secondly the agreement makes reference to what, I understand, are standard conditions frequently used in respect of the sale of goods in the metal products industry in the Netherlands known as the "metaalunie conditions". On page two of the agreement under the heading "Warranties and After Sales Service", paragraph 1 provides:-"The manufacturer will guarantee the product mechanically for twelve months after delivery, further according the metaalunie conditions as attached. During the guarantee period the manufacturer will bear the expenses on the spare parts required. During the guarantee period the distributor will bear the man hour costs for first line service and replacement."2.4 A note on page 3 of the agreement also suggests that the metaalunie conditions were attached. The metaalunie conditions themselves provide, at Article 20. for applicable law and choice of forum in the following terms:-

    "20.1 The law of the Netherlands is applicable.

    … 20.3 Only the civil court that has jurisdiction in the place of establishment of the contractor may take cognisance of disputes, unless this would be contrary to peremptory law. The contractor may deviate from this rule of jurisdiction and apply the statutory rules governing jurisdiction."2.5 It should also be noted that, on the evidence currently before the court, it appears to be...

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