Netherlands: Jurisdiction Clause In General Conditions Ineffective Despite Reference On Invoices In An On-Going Business Relation

Last Updated: 20 August 2012
Article by Carel Van Lynden

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

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions