Choice Of Jurisdiction Confirmed

Introduction

In the recent decision in Grosso v Lamsouguer,1 the High Court has confirmed the basis on which jurisdiction will be determined for disputes between parties where the relevant agreement specifies the courts of a particular jurisdiction for hearing disputes. Here, the defendants disputed the jurisdiction of the Irish courts to deal with an action for damages relating to a share transfer agreement signed in Italy in the Italian language, dated November 5 2010, which provided for the jurisdiction of the Irish courts, but Italian governing law. In the circumstances, Justice Charleton found that he had no option but to dismiss the defendants' jurisdictional challenge.

Facts

The plaintiff was a lawyer, Italian by nationality and qualified in Italy, Ireland and England and Wales. The first defendant was a German businessman and the second defendant was a company in which both the plaintiff and first defendant had shares. The plaintiff was appointed as legal adviser to both defendants after an agreement, written in English, was signed in Italy in April 2010. A clause in that agreement stated that the Italian courts were to have jurisdiction, but were to apply Irish law in the event of a dispute.

An equivalent undertaking to the second named defendant had been established by the defendants in Italy by late 2010 and the plaintiff had a shareholding in that Italian entity. Against a background of disputes regarding fees due to the plaintiff under the April 2010 agreement, the parties agreed that the plaintiff's shareholding be transferred to the second named defendant. At this point, the court suggested that the relationship had become confused.

Ultimately, the plaintiff drafted an agreement in Italian providing for transfer of the shares. Lawyers acting for the defendants had drafted a notarised share transfer agreement, but it made no provision for jurisdiction. The object of that document was to make the share transfer enforceable as a matter of Italian law. It was dated November 5 2010, as was the agreement drafted by the plaintiff on which it was based. This agreement made provision for the jurisdiction of the Irish courts, subject to Italian governing law, and the defendants sought to challenge that jurisdiction as part of these proceedings.

Applicable law

The court started by acknowledging that the law governing the choice of jurisdiction is exclusively contained in Article 23 of EU Regulation 44/2001 on jurisdiction and the...