The High Court has set aside service of proceedings on Dutch company Ambaflex B.V. in a dispute over the alleged early termination of an exclusive distribution agreement with Nestorway Limited, trading as Electrographic International. Mr Justice Clarke ruled on 19 July 2006 that Nestorway had not established that the Irish courts had jurisdiction to hear the claim.
Nestorway had sued for damages and injunctive relief, including an order to prevent termination before the agreement’s expiry and to restrain sales of the relevant products in the agreed territory. The territory comprised the United States, the United Kingdom, Ireland and Spain. The proceedings began on 13 March 2006. Ambaflex entered a conditional appearance and challenged the court’s jurisdiction; the injunction application was adjourned while that issue was determined.
Ambaflex said the contract’s attached Dutch industry conditions included a clause giving jurisdiction to courts where the contractor was established. The judge was not satisfied that the clause applied to the contract-wide claims before him. The agreement referred to those conditions in its warranty provisions, and no evidence of Dutch law was provided to establish that the forum clause extended to all disputes under the agreement.
The court also rejected Ambaflex’s argument that the claim fell under the Brussels Regulation’s special jurisdiction rule for sales of goods. The judge characterised the central obligations in an exclusive distribution agreement as both supplying the distributor and refraining from supplying others in the territory. He held that the claims could not be treated as a sale of goods for that rule.
Under the alternative rule, jurisdiction depended on the place where the relevant contractual obligations had to be performed, as determined by Dutch law because the agreement chose that law. No evidence of Dutch law was put before the court, so the place of performance could not be established. Although the judge said Ireland might be a place of performance under Irish law, he could not determine whether Dutch law took the same approach. Nestorway therefore failed to discharge its burden of establishing Irish jurisdiction.
The ruling decided jurisdiction only. It did not determine whether Ambaflex wrongfully terminated the agreement, whether unpaid invoices justified termination, or when the agreement would naturally expire. The judgment records that the parties disputed whether the five-year term began on 1 June or 22 August 2001. It also records that no sales under the agreement had taken place in Ireland. The court set aside service on Ambaflex for want of jurisdiction.