The Dutch Supreme court has rendered two judgements on 30 March 2012 in which it decided that a jurisdiction clause in general conditions (the so called FENEX conditions, the conditions used by practically all forwarders in the Netherlands) was ineffective despite the fact that there had been an on-going business relation between the forwarder and its customer of years, and that the invoices in all instances contained a reference to these general conditions (LJN BV2355, HR 11/02227 and LJN BV2356, HR 10/05443.
The FENEX conditions state that damages shall be settled at the place of business of the forwarder. The forwarder and its underwriters initiated proceedings before the court of that place, i.e. the court of Roermond in the Netherlands. The German customer disputed the jurisdiction of that court. The court declined jurisdiction. In appeal however the Court of Appeal of Den Bosch overturned the first instance judgement and accepted jurisdiction. The appeal court referred to case law of the Dutch Supreme Court of 2001 (NJ 2001/200), in which the court ruled as follows:
The appeal court has apparently and understandably decided that the pre-printed Dutch text (referring to the applicability of the FENEX Conditions) at the bottom of the stationary of the forwarder (containing the quotation) should have warned the (German) principal who as internationally active trading company is aware that these kind of references may contain reference to general conditions, to ask for clarification in case he was unsure what the reference meant. The court of appeal could therefore decide that, by instructing the forwarder without reservation to act as forwarder, the principal gave the forwarder the justified belief that he agreed to the applicability of the conditions.
This case dealt with an arbitration clause which is mentioned in the FENEX Conditions. The question answered by the court in that case was whether general trading conditions may apply by way of reference. That is the case.
In this respect it must be noted that the Court of Justice already in 1997 (case C-106/95, Mainschiffahrts-Genossenschaft eG (MSG) vs Les Gravières Rhénanes SARL) decided that a party will be considered to have agreed to applicability of a jurisdiction clause in case he has not protested against referrals thereto in standard referrals, provided that the conditions of article 23 paragraph 1 have been met (this dealt with paragraph c of paragraph 1 of article 17 of the EEC- Convention).
Because in the present case a jurisdiction clause was involved, the court of appeal correctly applied article 23 par 1 EU Regulation 44/2001 (hereinafter: Brussels I). The court of appeal tested whether there was an agreement
in a form which accords with practices which the parties have established between themselves (article 23 paragraph 1 under (b)),
and concluded that that was the case. However, the mere fact that invoices over a number of years refer to the FENEX Conditions does not suffice to assume that the parties have agreed on the choice of forum in a form which accords with practices which the parties have established between themselves. The question to be answered was not whether the general trading conditions are considered to have been accepted, but whether the choice of forum clause contained therein is considered to have been accepted. For that it is necessary that either the general conditions which contain the choice of forum have been "advised" to the principal or the preprinted reference mentions in so many words the particular choice of forum; that constitutes that the principal knew or could have known the choice of forum.
This decision will be of some impact on the Dutch practice, because people generally believe that a repeated reference on invoices to the conditions containing a choice of forum suffices.
It will suffice for the applicability of the conditions referred to as such, and also for arbitration clauses contained therein, but, on the basis of this decision it will not suffice for jurisdiction clauses to apply. For that a clear reference to the forum itself is required or an "advising" of the general trading conditions, i.e. a handing over thereof or the means of advising which is customary in the particular trade.
The reason for this strict approach as to jurisdiction clauses lies solely in the protective nature of article 23 Brussels I. Article 23 requires that the jurisdictional clause is subject to mutual consent between the parties in order to have procedural effect. This requirement also has to be met when parties are involved in an on-going business relationship which is based on general conditions. A party, in this case the forwarder, has to sufficiently establish that the other party, in this case the principal, had or could have had knowledge of the jurisdiction clause and agreed with it albeit implicitly (e.g. by accepting invoices containing a printed version of the clause). A repeated reference to general conditions in which a jurisdictional clause is included, is in any case not enough to establish this mutual consent, as the Dutch Supreme Court has decided in these two judgements.
As mentioned above, this approach differs from the approach applied in respect to the validity and enforceability of arbitration clauses. Arbitration falls outside the scope of application of Brussels I (art. 1 par. 2 sub d), and thus the strict requirements of article 23 do not apply here. The question arises however whether the distinction in treatment between these two types of clauses, is justified. Both clauses have the effect of a derogation of jurisdiction from the (non-chosen) courts. From a legal point of view it would be desirable to decide the issue of enforceability of an arbitration clause and a jurisdictional clause contained in general conditions on the basis of the same standards and conditions.
This article originally appeared in ILO
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