Prof. Maria Dragun=Gertner CMI 2016 New York

 The uniform European rules concerning jurisdiction agreements are called Brussels - Lugano regime.  They consist of several instruments which have been gradually implemented.

 Brussel Convention 1968 art. 17  Lugano Convention 1988 art. 23  Regulation 44/2001 art. 23  Lugano Convention 2007 art. 23  Most recently Regulation 1215/2012 (recast) - art. 25

 The European framework for jurisdiction agreement was initiated by the 1968 Brussels Convention between the then members of the European Community  A parallel treaty between the European Community and the member states of the European Free Trade Association was the Lugano Convention 1988  The Brussels Convention has been replaced by the Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgement in civil and commercial matters.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)

 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.

 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 jurisdiction  Art. 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])

 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 States  - the chosen forum is located in a Member State  If this two conditions were not met national law applied

 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 otherwise  3. 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.

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 2007

That provision was amended in Reg 1215/2012  According to its art 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.

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 provided But the Regulation is applied only when a court or the courts of a Member State are chosen to have jurisdiction to settle the dispute

 Brussel Convention in its pre 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

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. 1215/2012

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

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 writing  In a form that the parties have established between themselves  In a form that accords with international trade usage

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: 1. 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. 2. Third party’s acceptance has to be precisely and clearly demonstrated 3. Incorporation 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 clause

 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 64

In its decision of the 9 th 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.

 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])

However court decisions concerning the third alternative : a form that accords with the international trade usage, are not uniform.

 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?

 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)C-106/95

 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 contract  The objective knowledge of the trade usage by either party to the contract is irrelevant

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

 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 legitimate

 It might be also the case of Poland  Some of the earlier more favourable interpretations relative to shippers may not be applied in the future.

 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 prorogation, art derogation)  At present both written and electronic forms are provided.  According to art. art : 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 reference

 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

 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 State

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 Code

 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”

 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 a) 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 state b) at the time when the Convention was adopted the details of the draft Rotterdam Rules were still being finalised.

 The provisions of the Rotterdam Rules on jurisdiction and arbitration are influenced by the jurisdiction provisions of the Hamburg Rules

 The relevant rule of art. 66 RR covers only those contracts to which the parties are deemed to be in need of manadatory protection  Parties to volume contracts have greater, although still limited, freedom of contract. (Art. 80 RR)

 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 them  The same is stated with respect to arbitration agreement in art. 78 of RR.  As a result of this solution a diversity will remain.

 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 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 Rules  These 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 conventions The 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.

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 fori

 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.

 Discussion concerns also the question of the effect of mandatory liability rules  Since the Hague Visby Rules do not specifically regulate jurisdiction, they do not displace the provisions of the Brussels- Lugano regime

 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.

 Thank you