EUPillar Calyon v Wytwornia Sprzetu Komunikacynero PZL Swidnik SA [2009] EWHC 1914 (Comm)

Summary

The claimant, Calyon, was a French bank. The defendant, PZL, was a company incorporated in Poland. The parties entered into foreign exchange derivative transactions. The parties' agreement was made over the phone in August 2008. The contract was subject to terms of the ISDA Master Agreement which included a clause providing that “if the agreement is governed by English law, each party irrevocably submits to the jurisdiction of the English courts in relation to any suit, action or proceedings relating to the agreement.” [3] On 1st December 2008, the claimant initiated proceedings in England, and sought (1) a declaration that the defendant is bound by the agreement; (2) specific performance. The defendants challenged the jurisdiction of the English court and the existence of choice-of-court of agreement, noting that they did not sign the confirmation of the transaction. The defendants went further to state that the transaction was not governed by the terms of the ISDA Master Agreement. Also, they questioned whether their employee had authority under the statutes of association to enter into such agreement, submitting that Article 22(2) of Brussels I should apply. On 22nd Dec 2008, court proceedings were initiated by PZL in Poland. On 30 July 2009, the English High Court dismissed the defendant’s jurisdictional challenge. Mr Justice Field held: “79 In my judgement, by virtue of its case on course of dealing, Calyon has a much better argument than PZL on the application of Article 23(1) to the SRF. In reaching this conclusion I have kept in mind that the purpose of the requirement that consensus be clearly and precisely established is “to neutralise the effect of jurisdiction clauses that might pass unnoticed in contracts.” [See Partenreederei MS. Tilly Russ and Anorther v Haven & Vervoebedrijf Nova NV and Anorther (Case 71/83); [1985] 1 QB 931 at 954, para 24 (ECJ).] In my view, what that means in a case where consensus stands to be presumed is that the course of dealing must be such as to have put the counterparty fairly and reasonably on notice that the contract would contain the jurisdiction clause contended for. […] 84 I should add that I regard Mr Thomas's point based on the letter of 10th October 2008 as a weak one. The author of that letter had not been involved in the negotiation of the SRF and since 21 October 2008, Calyon has consistently asserted in correspondence that the SRF was governed by the ISDA Master Agreement and not the Polish Master Agreement.” [79 and 84] The High Court judge went to state that the Article 22(2) should be narrowly applied, and thus the question whether the PZL’s employee had authority to enter into the agreement was not something which the action in question was principally concerned with.