The Court delivered today its judgment in Case C‑436/16 (Georgios Leventis, Nikolaos Vafeias v Malcon Navigation Co. ltd., Brave Bulk Transport ltd.), which is on Article 23. 1 Brussels I (Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters):

“a jurisdiction clause in a contract between two companies cannot be relied upon by the representatives of one of them to dispute the jurisdiction of a court over an action for damages which aims to render them jointly and severally liable for supposedly tortious acts carried out in the performance of their duties”.

The facts were the following:

“13     […] Malcon Navigation, a company with its registered office in Malta and its actual seat in Maroussi (Greece), is the owner of the ship Sea Pride flying under the Maltese flag and operated by Hellenic Star Shipping Company SA whose seat is in Panama and which also has offices in Maroussi.

14     The referring court also states that Brave Bulk Transport has its registered office in Malta and its actual seat in Maroussi, that Mr Leventis is the only member of the board and the legal representative of that company, and that Mr Vafeias is its sole managing director and the actual representative. Mr Leventis and Mr Vafeias (‘the representatives of Brave Bulk Transport’) reside, respectively, in Piraeus and Kifissia (Greece).

15     A charter agreement was entered into on 9 June 2006 between Malcon Navigation and Brave Bulk Transport, pursuant to which Malcon Navigation chartered the ship Sea Pride to Brave Bulk Transport. Brave Bulk Transport subsequently sub-chartered the ship to the Iraqi Ministry of Trade to transport a cargo of wheat from Hamburg (Germany) to Iraq.

16     The ship was returned five months later than the date agreed in the charter contract.

17     On 17 February 2007 Malcon Navigation initiated arbitration proceedings in London (United Kingdom) against Brave Bulk Transport with the aim of recovering compensation for demurrage and accrued freight charges.

18     Brave Bulk Transport brought an action for damages against the Iraqi State, as it was the Iraqi State’s delay in returning the ship that caused the delay in Brave Bulk Transport returning the ship to Malcon Navigation.

19     A privately-executed agreement was signed by Malcon Navigation and Brave Bulk Transport on 14 November 2007. That agreement provided that the pending arbitration proceedings would be stayed for six months, that Brave Bulk Transport would inform Malcon Navigation about the course of proceedings against the Iraqi State and that, if a settlement with the Iraqi State were reached, Malcon Navigation would receive at least 20% of the amount paid by the Iraqi State to Brave Bulk Transport. Article 10 of the agreement provided that it was ‘governed by English law’ and was subject to ‘English jurisdiction’ and that ‘any dispute arising from or in connection with it [would] be subject to the exclusive jurisdiction of the High Court of England and Wales’.

20     In November 2008 Malcon Navigation learnt that an amicable settlement had been agreed by Brave Bulk Transport with the Iraqi State on 20 May 2008 and that Brave Bulk Transport had received the amount of the settlement. Malcon Navigation then continued the arbitration proceedings and an arbitration award was delivered on 29 September 2009, ordering compensation to be paid to it.

21     Malcon Navigation also submits that the representatives of Brave Bulk Transport deprived the latter of its assets, thereby preventing Malcon Navigation from receiving its compensation.

22     On 22 September 2010 Malcon Navigation brought an action for damages before the Polymeles Protodikeio Peiraios (Court of First Instance, Piraeus, Greece) against Brave Bulk Transport and the representatives of Brave Bulk Transport on the basis of Articles 71 and 926 of the Civil Code, with the aim of rendering them jointly and severally liable for having committed tortious acts. By reason of the jurisdiction clause included in the agreement of 14 November 2007, the court dismissed the action so far as concerns Brave Bulk Transport. However, as regards the representatives of Brave Bulk Transport, the court found that it had jurisdiction and upheld the application as to the substance.

23     The Efeteio Peiraios (Court of Appeal, Piraeus, Greece), before which the representatives of Brave Bulk Transport brought an appeal against the decision of the Polymeles Protodikeio Peiraios (Court of First Instance, Piraeus), confirmed the position adopted by the latter with regard to matters of jurisdiction.

24     By application of 31 July 2014, the representatives of Brave Bulk Transport appealed on a point of law to the Areios Pagos (Supreme Court of Cassation, Greece).

25     The referring court points out that the courts at first instance and on appeal declared that they had jurisdiction to hear and determine the case before them as regards the representatives of Brave Bulk Transport on the ground that, from their point of view, those representatives, who were not party to the agreement of 14 November 2007, were not bound by the jurisdiction clause it contains.

26     The referring court takes the view that it follows from Article 23 of the Brussels I Regulation and from the case-law of the Court that an agreement conferring jurisdiction applies in principle only between the parties who have entered into it, but, exceptionally, it is possible for it to be relied upon by or against a party to the dispute who was a third party at the time when it was signed.

27     The referring court also notes that, where there are a number of defendants, Article 6(1) of that regulation provides that a person domiciled in a Member State may also be sued in the courts for the place where any one of them is domiciled, provided the claims are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings. The referring court takes the view that a similar risk exists in a situation where one of a number of defendants has agreed to a jurisdiction clause.

28     Having regard to the above, the referring court harbours doubts as to the validity of the assessment made by the courts with jurisdiction over the substance as to the scope of the jurisdiction clause included in the agreement of 14 November 2007”

Source: here