Okretowe v Rallo Vito & C. Snc & Anr

Under Article 23 of the Brussels Regulation, a party seeking to displace the ordinary jurisdiction of the defendant’s domicile must establish a good arguable case that the parties clearly and precisely agreed to confer jurisdiction and that the agreement satisfies the prescribed formal requirements.

Agreement may be reached by incorporating standard terms containing a jurisdiction clause. A specific reference to the clause is unnecessary. An oral agreement may be evidenced in writing by a recap or confirmation emanating from the other party. In urgent commercial negotiations, failure to object within a reasonable time may establish the required written evidence.

The claimant, owner of the tug POSEJDON, sought declarations concerning liability arising from towage services provided to the vessel CATONE. The defendants, an Italian vessel owner and its hull and machinery insurer, applied for a declaration that the English court lacked jurisdiction and for the claim form or its service to be set aside.

The claimant relied on an alleged agreement to contract on BIMCO TOWHIRE terms, including an English courts jurisdiction clause. The central issues were whether the first defendant agreed to that jurisdiction clause and whether the agreement satisfied Article 23 of the Brussels Regulation. The court also considered whether any such agreement was made with the second defendant.

1. Application outcome. The first defendant’s application failed. The second defendant’s application succeeded.
2. Article 23 required the claimant to show a good arguable case. The claimant had to establish both an agreement conferring jurisdiction and compliance with one of the formal methods in Article 23. The agreement had to be shown clearly and precisely, and the formal requirements were construed strictly.
3. A party may agree to standard terms containing a jurisdiction clause without specifically agreeing the clause itself. The relevant question was whether there was sufficient consensus between the parties, determined as a question of fact without recourse to national rules of contract law.
4. The first defendant’s brokers had accepted that the towage contract would proceed on TOWHIRE terms. The subsequent telephone confirmation of the fixture incorporated the terms discussed earlier, including TOWHIRE and its standard English courts jurisdiction clause. The evidence also included established dealings, commercial expectations, the recap, and the defendants’ failure to object promptly.
5. The oral agreement was evidenced in writing by the revised recap expressly incorporating BIMCO TOWHIRE. A signature was unnecessary, and the writing need not emanate from the party against whom the clause was enforced. In the urgent circumstances, the failure of the defendants or their brokers to object within a reasonable time supported acceptance of the recap as accurately recording the agreement.
6. The second defendant had agreed only to guarantee payment of 80 per cent of the sums due. It had not been discussed as a hirer, and the claimant therefore failed to establish any jurisdiction agreement with it. The alternative arguments under Article 23(c) and acceptance of services were not determined.