Posts Tagged Bonus pater familias

Learn your lines, son!: the (ir)relevance of grammar for choice of court underlined in Global Maritime Investments.

These general terms and conditions will be governed by and construed in accordance with English law. 

With respect to any suit, action or proceedings relating to these general terms and conditions each party irrevocably submits to the jurisdiction of the English courts.”

In Anchorage, the High Court had already dismissed a semantic approach to choice of court agreements in contracts (and choice of court clauses) subject to English law. In Global Maritime Investments Cyprus v O.W., Teare J considered in summary judgment, sought by GMI, whether the aforementioned clause is exclusive, and if not, whether proceedings commenced by GMI in England, block any future proceedings on the same (or wider) contractual issues sought by OW in Denmark. GMI had started proceedings in England following OW’s November 2014 filing for bankruptcy in Denmark. OW had initiated proceedings in Denmark in March 2015. At issue was among others the ‘netting-out’ provisions between parties (effectively, a final settlement of reciprocal dues in different currencies, with derivatives of commodity transactions being the underlying transactions between the parties in this case).

Teare J held that the clause even if not so phrased verbatim, was meant to be exclusive, among others in line with what ‘the reasonable commercial man’ (the bonus mercator, if you like) would have understood the clause to be, especially under the lex contractus, English law. All the more so in light of the use of ‘irrevocably’. At 51 he does offer sound commercial advice to avoid disputes such as the one at issue: it is desirable to employ transitive language, such as in ‘each party agrees to submit all claims’.

I do not think there is justification for the Court not to have considered the impact of the Brussels I (and /or Recast) Regulation on the clause: the judgment keeps entirely shtum about it. Under the rules of the Regulation, all clauses are considered exclusive unless specifically stated. Saying that the clause expressis verbis amounts to non-exclusivity, would be quite a stretch. (I agree it is not clearly worded exclusively – however that is exactly where the Brussels I Regulation is of assistance).

It is quite clear to me that this judgment (issued 17 August – I have delayed reporting for exam reasons) will not be the end of the jurisdictional affair. In particular, parties I am sure will be at loggerheads as to what litigation is to be considered ‘relating to these general terms and conditions’, in particular with OW’s insolvency proceedings in the background.

Geert.

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The Clapham Omnibus, objective legal standards and EU procurement law. The UKSC in Healthcare at Home Ltd.

This case was not about the procurement of buses – of which there are well-known cases in EU procurement law. Rather, it is about the abstract nature of the many guises of the bonus pater familias, the ‘fair and reasonable man, an intellectual (legal) tradition of defining a legal standard by reference to a hypothetical person, stretching back to roman law. (Lord Reed, at 2). In English law, Greer LJ launched the concept in Hall v. Brooklands Auto-Racing Club, to determine the standard of care required to avoid being found negligent.

In Healthcare at Home Ltd, the UK Supreme Court was asked whether the criteria for the award of a public sector contract (‘public procurement’) had been sufficiently clear. Appellant had argued that whether the contract documents allowed all reasonably well informed tenderers of normal diligence to interpret them in the same way, was to be decided on the basis of factual evidence as to how the various tenderers had in fact understood the documents.

Lord Reed points out (at 4) that in recent times, additional passengers from the EU have boarded the Clapham omnibus, in the case at issue: the reasonably well-informed and normally diligent tenderer. Under EU law (reference is made in the judgment to relevant ECJ case-law) the criteria for a contract award must be formulated in such a manner as to allow all reasonably well informed and diligent tenderers to interpret them uniformly. However, the test is not whether all tenderers have actually interpreted the criteria in the same way. Rather, whether the criteria had been sufficiently clear to permit uniform interpretation by all reasonably well informed and diligent tenderers.

A great case, surely, to kick of one or two comparative law classes. (Thank you to the Times of London for alerting me to the judgment).

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