Calyon v Wytwornia Sprzetu Komunikacynego Pzl Swidnik SA

For a jurisdiction agreement under Article 23 of the Brussels I Regulation, consensus must be established clearly and precisely. Where consensus is presumed under Article 23(1)(b), the prior dealings must have given the counterparty fair and reasonable notice that the contract would contain the jurisdiction clause. Article 22(2), which confers exclusive jurisdiction over company-status and organ-validity proceedings, is construed narrowly by reference to its central objective. It does not displace an Article 23 jurisdiction clause merely because corporate authority is one issue in proceedings principally concerned with enforcing a contract.

Calyon sought declarations and specific performance concerning a foreign exchange derivative transaction entered into orally with PZL. The transaction was later confirmed on terms referring to the ISDA Master Agreement, English law and the jurisdiction of the English courts. PZL disputed those terms and applied for a declaration that the English court lacked jurisdiction.

The issues were whether consensus to the jurisdiction clause had been established under Article 23(1) of the Brussels I Regulation and whether Article 22(2) gave the Polish courts exclusive jurisdiction because PZL disputed the authority of its representative.

PZL’s application was dismissed. The court had jurisdiction to determine Calyon’s claim.

1. Article 23 requires both consensus and compliance with one of its formal alternatives. The consensus must be demonstrated clearly and precisely. Where Article 23(1)(b) applies, the course of dealing must have put the counterparty fairly and reasonably on notice that the contract would contain the jurisdiction clause.
2. Calyon had a much better argument than PZL that Article 23(1)(b) was satisfied. PZL had signed and returned earlier confirmations for materially similar structured transactions. Those confirmations stated that the transactions were entered into through Calyon’s London office, were subject to the ISDA Master Agreement and were governed by English law. PZL had also received explanations distinguishing London structured transactions from transactions governed by the Polish framework agreement and had signed settlement instructions referring to structured transactions with Calyon London.
3. The transaction in issue was essentially the same type of structured product as the earlier transactions. It had been negotiated alongside similar products, with Calyon London providing pricing and transaction details. PZL therefore had fair and reasonable notice that it would be entered into on ISDA terms. The absence of any timely objection to the ISDA terms reinforced that conclusion.
4. It was unnecessary to decide whether Article 23(1)(a) or (c) applied. Article 23(1)(b) was an alternative route, and it was immaterial whether the jurisdiction agreement was made orally in advance or evidenced in writing.
5. Article 22(2) was construed narrowly. Its objective was to centralise jurisdiction over proceedings concerning the existence of a company or the validity of decisions of its organs. The claim was principally concerned with enforcement of the oral derivative contract. Actual authority was only one of four principal issues, alongside consensus as to the commercial terms, an alleged lack of diligence and apparent authority. The Article 22(2) exception therefore did not apply.

The application failed and the English court had jurisdiction to determine the claim.