Irish company cannot agree exclusive jurisdiction clause in favour of the courts of a non-EU State

By: Lawrence Morris BL

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High Court, in proceedings challenging the jurisdiction of the Irish courts to hear the claims made by the plaintiff against the two defendants relating to two separate agreements: (1) refuses jurisdiction over the proceedings in respect of the agreement between the plaintiff and first defendant in favour of the Italian courts, despite the presence of an exclusive jurisdiction clause in favour of the Irish courts, on the grounds that the agreement between the parties amounts to a derogation from the normal rule; (2) accepts jurisdiction in respect of the agreement between the plaintiff and second defendant in favour of the Irish courts, on the grounds that the exclusive jurisdiction clause in the agreement between the parties in favour of the courts of a non-EU state, Bosnia, does not amount to a derogation from the normal rule; and (3) refuses to put a stay on the second defendant's proceedings pending the determination of the first defendant's proceedings in Italy, where the Italian proceedings have naturally not been instituted and so there are no parallel proceedings which would cause these proceedings to be stayed.

Jurisdiction of courts - general rule is company must be sued in country where it is incorporated/domiciled - Brussels Recast Regulation - agreed exclusive jurisdiction - whether derogation from general rule - whether exclusive jurisdiction clause can be in favour of a non-EU state - autonomy of commercial entities to choose jurisdiction for litigation - defendants challenging jurisdiction of Irish courts to hear claims by plaintiff - both agreements deal with provision of services involving the directing of website traffic - plaintiff is incorporated in Bosnia and Herzegovina - both defendants Irish registered companies - however both defendants argue they have exclusive jurisdiction clauses which mean that it should be heard elsewhere - first defendant’s clause sets Italy as exclusive jurisdiction - second defendant’s clause sets Bosnia as exclusive jurisdiction - whether Article 25 of Regulation takes precedence over Article 4 - consider of agreement between parties - implications of amendment of agreement - whether all of plaintiff's claims are subject to exclusive jurisdiction clause - meaning of wording - whether claims within clause are within Italian law - whether Irish courts can hear claim - court ultimately finds exclusive clause in agreement between the plaintiff and first defendant in favour of the courts of an EU state (Italy) amounts to a derogation from normal rule in Art 4 - so whilst first defendant is incorporated and domiciled in Ireland - court refuses jurisdiction over proceedings in favour of Irish courts - court finds exclusive jurisdiction clause in the agreement between plaintiff and second defendant in favour of the courts of a non-EU state (Bosnia) does not amount to a derogation from the normal rule - court accepts jurisdiction over claim - court refuses to stay proceedings pending the conclusion of the dispute between the plaintiff and first defendant.

Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.

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