EUPillar Rolf Barkmann GmbH v Innova House Ltd, Sheriff Court (Grampian, Highland and Islands) (Inverness), 2008 G.W.D. 33-490 (Sheriff D Pyle)

Summary

In this action, which had come before the Sheriff Court in debate on the defenders’ first plea-in-law that challenged the jurisdiction of the Court, the Court decided on the question whether there should be a preliminary proof on the question of jurisdiction. The main dispute arose from unpaid fees for services performed under a contract between the parties. Rolf Barkmann GmbH, the pursuers, averred that in February 2004 they entered into a written contract with Innova House Ltd, the defenders whose registered office was in Scotland, for certain construction works at a garden centre. The contract provided, inter alia, that a standard form of German contract (“VOB/B”) governed performance and guarantees and it was not in dispute that the VOB/B and the other terms of the contract did not deal with the question of jurisdiction. On the other hand, the defenders averred that in March 2004 the parties entered into an agreement (“the Basic Agreement”) and that in April 2004 a telephone conversation took place between individuals of the respective parties, when it was agreed “that disputes arising out of contracts between them would be dealt with exclusively by the German Courts”. The defenders further averred that they confirmed the terms of this conversation by a fax of the same date. The defenders alleged that the Basic Agreement and the oral agreement as confirmed in the fax which was written evidence applied to the contract and that the fax “was sent as part of the continuing trading relationship between the parties in light of the Basic Agreement and accords with the practices of international trade”. The Court assessed that the main issue in dispute was whether or not the defenders' pleadings disclosed a relevant and specific case which fell within one or more of the three possible grounds set out in Art 23(1) of Brussels I, ie (a) an agreement “in writing or evidenced in writing”; (b) an agreement “in a form which accords with practices which the parties have established between themselves” and (c) an agreement “in international trade or commerce, in a form which accords with a usage (etc)…”. The Court conducted a detailed examination of the relevant case-law of the CJEU in order to find the answer. Regarding the first ground, the Court assessed that there were three general principles derived from the decisions of the CJEU in the context of the facts averred in the instant case. These principles were “1.For the jurisdiction of a court to be prorogated, evidence in writing must demonstrate that there has been consensus between the parties”; “2.Such consensus must exist in fact”; “3.The demonstration must be clear and precise”. On the question whether the defenders' averments passed the tests of sufficiency and relevancy to show that the evidence in writing clearly and precisely demonstrated that consensus in fact existed between the parties to prorogate the jurisdiction of the German court, the Court considered the averments sufficiently specific and relevant for a plea of no jurisdiction based upon the first ground in Art 23. The defender’s averment under the second ground that the fax had been sent as part of the continuing relationship was considered irrelevant by the Court on the ground that there was no averment of a jurisdiction agreement prior to the alleged oral agreement. The defender’s averment under the third ground that their fax accorded with the practices of international trade was also considered insufficient to pass the test of relevancy by the Court since the averment referred to “practices” rather than “usage” as required by Art 23. The Court also noted that if the defenders had made relevant averments on this ground based on “usage”, it might have referred the interpretation of the term to the CJEU for a preliminary ruling. The Court concluded that there should be a preliminary proof on jurisdiction to prove the oral agreement and that the fax purportedly sent in evidence of this agreement was actually sent.