8 Update to Chapter 13: Choice of Court Agreements
From: Civil Jurisdiction and Judgments in Europe: The Brussels I Regulation, the Lugano Convention, and the Hague Choice of Court Convention - Online Update, January 2018
Trevor C Hartley
- Jurisdictional and choice of court agreements — Validity and effect
Update to footnote 1.
N-13-1 For an additional article, see: Ahmed and Beaumont, ‘Exclusive Choice-of-Court Agreements: Some Issues on the Hague Convention on Choice of Court Agreements and its Relationship with Brussels I Recast Especially Anti-suit Injunctions, Concurrent Proceedings and the Implications of BREXIT’ (2017) 13 JPIL 386.
Updating paragraphs 13.49–13.54 Asymmetric Choice-of-Court Agreements.
Updating paragraphs 13.75–13.85 When is a choice-of-court agreement binding on third parties?
N-13-3 The question whether a choice-of-court agreement in a contract between two companies may be invoked by the officers of one of the companies came before the CJEU in Case C 436/16, Leventis and Vafeias, ECLI:EU:C:2017:497. Malcon Navigation and Brave Bulk Transport (‘BBT’) were both companies with their registered offices in Malta and their actual seats in Greece. Mr Leventis and Mr Vafeias, (referred to by the CJEU as the ‘representatives of BBT’) were individuals closely connected with BBT. Leventis was the sole member of the Board of BBT and Vafeias was its managing director. BBT and Malcon concluded a contract which contained an English choice-of-law clause and an English choice-of-court clause.
N-13-4 Subsequently, Malcon brought proceedings in Greece against BBT, Leventis, and Vafeias, claiming that the three of them were jointly and severally liable for various torts. The proceedings appeared to come within the scope of the choice-of-court clause in the contract between BBT and Malcon. The Greek court held that the choice-of-court clause deprived it of jurisdiction over BBT but not over Leventis and Vafeias. This was upheld on appeal by the Greek courts, which said that since Leventis and Vafeias were not parties to the agreement between Malcon and BBT, they could not benefit from it.
N-13-5 The Greek supreme court made a reference to the CJEU, asking whether the close relationship which Leventis and Vafeias had with BBT meant that they too could benefit from the choice-of-court clause. The Greek supreme court said that it follows from the case law of the CJEU that an agreement conferring jurisdiction applies in principle only between the parties who have entered into it, but, exceptionally, it is possible for it to be relied upon by or against a party to the dispute who was a third party at the time when it was signed.
N-13-6 The CJEU said that the issue was whether a choice-of-court agreement between two companies can be relied upon by the representatives of one of the companies to contest the jurisdiction of a court in an action for damages in which it is claimed that they and their company are jointly and severally liable for supposedly tortious acts carried out by them in the performance of their duties. In spite of this, it did not consider the previous cases in which it had held that a choice-of-court agreement may be invoked by third parties in certain circumstances. It simply said that since Leventis and Vafeias were not parties to the choice-of-court agreement, they could not benefit from it.
N-13-7 With regard to a choice-of-court agreement in an insurance contract, see Case C 368/16, Assens Havn v. Navigators Management (UK) Limited, ECLI:EU:C:2017:546, discussed above with reference to Chapter 11 of the main work.