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England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> R + V Versicherung AG v Robertson And Co SA  EWHC 1243 (QB) (27 May 2016)
Cite as:  Lloyd's Rep IR 612,  4 WLR 106,  WLR(D) 298,  EWHC 1243 (QB)
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QUEENS BENCH DIVISION
LONDON MERCANTILE COURT
B e f o r e :
(sitting as a Judge of the High Court)
| R + V VERSICHERUNG AG
|- and -
|ROBERTSON AND CO. SA
Andrew Legg (instructed by Steptoe & Johnson, Solicitors) for the Defendant
Crown Copyright ©
JUDGE WAKSMAN QC:
"If the parties, one or more of whom is domiciled in a State bound by this Convention, have agreed that a court or the courts of a State bound by this Convention are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. Such an agreement conferring jurisdiction shall be either:
(a) in writing or evidenced in writing; or…"
(1) The sole purpose for requiring the agreement as to jurisdiction to be in, or evidenced in, writing is so that there is clear proof of that agreement; see paragraph 5 of the judgment of the ECJ in Iveco v Van Hool  ECR 1851;
(2) The agreement, or consensus, itself must be "clearly and precisely" demonstrated - see paragraph 7 of the decision of the ECJ in Salotti v Ruwa  ECR 1831;
(3) The existence or otherwise of such an agreement is to be regarded as an independent concept of EU law - see the decision of the ECJ in Powell Duffryn v Petereit  ECR I-1745 at paragraphs 13-14, and paragraph 54 of the judgment of Aikens LJ in Aeroflot v Berezovsky  EWCA Civ 784;
(4) Accordingly, the fact that as a matter of domestic law, one or other parties argue that the agreement containing the jurisdiction clause is itself void or invalid is irrelevant, save perhaps where it could be said that as a result, the transaction was entered into by the other party in bad faith - see paragraphs 55-63 of the judgment of Aikens LJ in Aeroflot. Otherwise, a doctrine similar to that of "separability" in relation to arbitration agreements applies in this context also - see paragraph 24 of the judgment of Longmore LJ in Deutsche Bank v Asia Pacific  2 Lloyds Rep 619, referring back to the decision of the ECJ in Benincasa v Dentalkit  ECR I-3767 at paragraphs 23-32;
(5) Moreover it is common ground that as with English law, the existence or otherwise of the requisite agreement must be decided objectively regardless of what either or both parties thought they were agreeing to;
(6) The writing which evidences the agreement may often be, but need not be, in a single document; so, for example, in 7E v Vertex  1 WLR 2175, the Court of Appeal held that the writing consisted of the seller's quotation and the buyer's purchase order which was held to have accepted it. See in particular, paragraphs 34-36 of the judgment of Sir Anthony Clarke MR;
(7) Finally, the writing relied upon need not emanate from the party now sought to be bound by the jurisdiction clause; so if that party received from the other party a written confirmation of the oral agreement previously made, and failed to object to that confirmation within a reasonable time, this could be sufficient "evidence in writing" of the agreement in question: see Berghoefer v ASA SA  ECR 2699 at paragraphs 14-16.
"in each case the court must construe the language of the contract in the context of its commercial background and ask itself whether a consensus on the subject matter of the jurisdiction clauses is clearly and precisely demonstrated"
30. Where the terms of a wholly separate contract are incorporated, different considerations apply. A bill of lading which incorporates all the conditions of a specified charterparty will not usually incorporate a charterparty arbitration clause, in the absence of express wording to that effect. By analogy with the incorporation of arbitration clauses into bills of lading from charterparties, the law adopts "a fairly strict approach" — Dornoch Ltd v Mauritius Union Assurance Co Ltd  Lloyd's Rep IR 127, page 141 at para 48 (Aikens J), affirmed  2 Lloyd's Rep 475 — to the incorporation of jurisdiction clauses from an insurance (or reinsurance) contract into another reinsurance contract. Only those terms directly germane to the parties' agreement are carried over. The presumption is that these usually exclude a jurisdiction clause. In that case a provision in the excess reinsurance slip that it was "to follow all terms and conditions of the primary policy together with riders and amendments thereto covering the identical subject matter and risk" was held to be inapt to incorporate a Mauritian jurisdiction clause in the primary reinsurance.
31. It is, however, necessary, always to remember that the ultimate issue is what objectively did the parties intend: see Dornoch at first instance, para 48. In the Court of Appeal in that case Tuckey LJ said this  2 Lloyd's Rep 475, page 481:
27. There are many cases in which the courts have to decide whether terms from one contract have been incorporated in another. A number of these cases concern the incorporation of terms from a direct insurance into a reinsurance. But no hard and fast rules emerge from these cases as one would expect. The question in each case is one of construction: did the parties to the contract in which the general words of incorporation appear intend that their contract should include the particular term from the other contract referred to? It may be.. that the courts will answer this question in favour of incorporation more readily in some categories of cases than in others, but that is no more than saying that the contractual context and the words used are all important."
THE BACKGROUND FACTS
WHAT WAS AGREED AT THE MEETING?
(1) Mr Euan Robertson's note included the following:
"TU-relative proportions… 45/55… Start date… 1st of March 2013
JS issue invoices once a quarter
TU… Would like copy of AIG contract to R&V and will join instruction…
Set up of fee fund for subcontractors… Invoices quarterly from R & Co. .. Each quarter will need budget for quarter w/ plan of hours.. As bills will have to go to management for approval.. TU will email JS confirming participation w/ AIG on same terms w/ AIG's master agreement… E.g. want to avoid problems w/ "car-rental allowances"
SR: expenses at cost but reasonable"
(2) Mr Blöcher appears to have taken two sets of notes.
(a) His notes beginning at p196 of the bundle include the following:
"RS… Quarterly is okay. But question is disbursements for subcontractors.
TU do you have an agreement in place between AIG and Robertson
RS yes it's a big doc
TU if we could have that then we can agree that R&V participated in the costs 45/55 by email exchange
(b) His notes beginning at page 215 include the following:
"TU: SR please send me the AIG Robertson agreement-I will state per email that R&V will co-join this agreement on a 45/55 basis. I will send you a confirmation… I would like you to send me a "plan/budget" for the quarterly accounts. Stating what R & Co. will precisely bill and what the subcontractors will bill. I need this to show it to the board for approval and so we can make the fund payment.
SR: yes I will send that in a letter…
SR: In the AIG-Robertson agreement there is a confidentiality clause. But since AIG is sitting here I guess they will be okay with the passing it on to you
JS: yes we are."
I should add that Mr Struan Robertson in his evidence tried to make something of the fact that shortly after this section there appear in the notes the words "For Us..The Master Agreement" crossed out, suggesting that it was specifically decided that the Master Agreement would not govern. I do not accept this – the words might have been crossed out for any number of reasons and indeed the Master Agreement had already been referred to as being joined by R&V;
(3) Mr Baier's typed notes of the meeting includes the following:
"RATES AND FEES OF SUBCONTRACTORS:
… SR to send master contract with AIG and updated fees table to R&V. This together with budget for Rob fees and subcontractor fees, budget for subcontractors on quarterly basis, Rob will send letter to this effect, TU needs something as basis for making substantial upfront payment into escrow account.
SR: expenses are at cost, should be reasonable.…
WRAP UP TO Dos:
-short message to re-High points of agreement AIG/R&V. Exchange of emails sufficient… Finalisation of agreement early next week…"
"… Robertson.. Will provide detailed quarterly accounts of amounts due to consultants plus bank statements documenting that the amounts due have been settled from the fee fund account. Robertson… Will also provide a quarterly budget plan for the estimated costs of consultants work to be carried out in the following quarter; AIG and R&V will make according contributions to the fee fund account
6. Robertson… Will provide detailed quarterly accounts (plus detailed timesheets) on the work carried out by Robertson… Which will be settled by AIG and R&V in accordance to their respective proportion… Robertson will provide a quarterly budget plan for the estimated costs of the work to be carried out by Robertson…
7. The details of the dealings between Robertson… And AIG are governed by their contract dated 2005 (approx.). AIG will provide a copy of this contract to R&V. Confidentiality restrictions… Have been lifted by mutual agreement of AIG, Robertson… And R&V at the meeting."
I have attached our service agreement with AIG with their consent but in confidence.
The original signed document dated 30 May 2007 is not in electronic form so if you need this we would have to scan it for you.
The only changes during the last 6 years are to Exhibit 3 where our current charge out rates per hour are:
|S. Robertson||CHF 595.00|
|E. Robertson||CHF 295.00|
|W. Klein||CHF 320.00|
The main change has been to Euan's charge out rate as he completed his 10 years of experience training in 2009.
I hope this is sufficient for your purposes."
"2. An ongoing business relationship exists between AIG and Robertson… Which is regulated by a framework agreement dating from the year 2005 (not yet confirmed). This framework agreement is being made available to R&V. The provisions of the framework agreement will apply by default to the relationship between R&V and Robertson and co-unless individual variations to the contrary have been agreed."
(1) First, despite what the witnesses now say, AIG and Robertson were proceeding on the basis of the Master Agreement which was indeed "in place";
(2) Second, that R&V, AIG and Robertson agreed to proceed with each other on the basis that Robertson's own charges were as per the hourly rates set out in the email of 12 April 2013, there would be the quarterly budgets referred to in paragraphs 6 and 7 of the revised notes of the agreement completed on 15 March 2013, the contributions being in the ratio 55/45, and otherwise in accordance with the terms of the Master Agreement.
(1) Euan Robertson's note shows that at the same time as agreeing to join AIG's instruction, Mr Ullrich wanted a copy of the relevant agreement. It is a reasonable assumption that he did so because R&V would "join" that agreement as part of joining the "instruction"; that is backed up by the later words that "TU will email JS confirming participation with AIG on same terms [as] AIG's master agreement"; it is right that the example given of that was to avoid excessive expenditure and have reasonable costs, but there is no limitation in this note of what was said at the meeting being simply as to the terms of the Master Agreement which dealt with costs;
(2) Mr Blöcher's note also refers to the Master Agreement and although Mr Sabalis said that it was a "big document" Mr Ullrich asked for it and "then we can agree that R&V participates in the costs 45/55 basis". On its face that is an intention to proceed according to the same terms as AIG; if its only relevance was costs there would be no need to saddle Mr Ullrich with the whole of this large document; the second note recorded that R&V would "co-join" the Master Agreement;
(3) Mr Baier's typed note is also at least consistent with R&V proceeding upon the basis of the Master Agreement;
(4) It seems to me that all of the meeting notes show that R&V was interested in the Master Agreement more than simply because of its provisions on costs and having discovered that there was an agreement which was treated as governing the position between AIG and Robertson Mr Ullrich wanted any instruction to be on the same basis so that it was truly "joint"; this would then satisfy his superiors;
(5) It also seems a fair inference from the revised summary of the agreement prepared by Mr Ullrich that, although not stated explicitly, R&V would be instructing Robertson on the same basis as AIG, which was the Master Agreement. It is not as if Robertson (or AIG) came back afterwards and objected to this part of the summary;
(6) Equally Mr Struan Robertson's email to Mr Ullrich and Mr Baier on 12 April suggests that the Master Agreement would now form the basis of the agreement with R&V; otherwise it is not clear why Mr Robertson should go to the trouble of not only updating the charge out rates but pointing out that these were "the only changes" to the Master Agreement in the last 6 years; I agree that in theory he could have been providing the Master Agreement simply on the basis that Mr Ullrich wanted to show the board what sort of agreement AIG had with Robertson but if so, it is difficult to see why R&V's position would be that its agreement with Robertson was something different; that makes little commercial sense;
(7) Mr Baier's email of 12 April 2013 does not take matters much further;
(8) One is then left with the undated draft note for the board. That, of course, is R&V's internal document only and no board minutes have been produced, but taken at face value, it is certainly stating that absent any particular alterations, R&V would also be operating according to the Master Agreement.
(1) I accept that there are various clauses in the Master Agreement which might not be particularly necessary for R&V for example in relation to third-party recipients of Robertson's services, but that does not mean that the Master Agreement did not work or was inapposite from R&V's point of view; I agree also that there is a limitation of liability in clause 11.2 to £1m and there might be a question as to whether that would have been suitable for R&V. On the other hand, I think the likelihood is that had this been addressed specifically, R&V would have fallen into line with AIG. It is not, after all, such an unusual provision;
(2) In addition, if the Master Agreement was not incorporated entirely, there is a question whether, for example, clause 2.2 of Exhibit 3 was included or not. It does not deal with the quantum of payments so on that footing, on Robertson's case, it would not be included. On the other hand, it gives an important contractual right to the customer to suspend payment of any sums due where Robertson was in breach of duty of any of its obligations to the customer until the breach was rectified. In a joint instruction situation where, for example, Robertson was in breach of duty in respect of its performance where both parties were sharing the costs, it would seem to me to be very odd, objectively, to have a situation where only one party could suspend payment and the other party could not. In that regard, one could make a similar point about jurisdiction, namely that it would be odd if one of the jointly instructing parties had a clause in favour of England whereas for the other party, jurisdiction was at large. It also means that it cannot be said that Robertson would have had some objection in principle to an English jurisdiction clause, had it been asked to consider that matter because (as all the documents suggest), it already accepted that it was contracting with AIG on the basis of the Master Agreement, notwithstanding Robertson's assertions now that the Master Agreement had expired and did not govern AIG anyway;
(3) While the Master Agreement is not Robertson's standard terms, it is nonetheless a set of terms dealing with precisely the subject matter of the dealings between R&V and Robertson, namely the latter's instruction of it as a loss adjuster. The set of terms may have been as between Robertson and a third party but (a) the third party was here working alongside R & V to instruct Robertson and (b) the Master Agreement cannot be seen as an agreement essentially about something else; compare the charterparty as against the bill of lading or the original contract of insurance as against the contract of reinsurance;
(4) The very fact of a joint instruction commercially supports the notion of instructions on the same terms. I quite accept that when a third reinsurer, Axis, came later to join in the instruction to Robertson (although it did not stay very long) there is no evidence that the Master Agreement was mentioned. But the fact that Axis seems to have taken a very informal approach does not in my judgment affect the commercial points made above;
(5) It follows for all those reasons that the facts of this case are materially different from those in, say AEL. There, the agreement sought to be incorporated as whole and not merely as to its payment conditions, was different to the main agreement because it was a freight forwarding agreement and not a slot charter and a number of its provisions simply could not be carried over. Moreover the documents taken as a whole showed that the reference to that agreement was only referred to in relation to its payment conditions. While in that case one could then conclude (as the Court did) that any incorporation of the terms should be limited and not general, the starting point in this case is crucially different: it is that the whole set of terms in question were already operative as between Robertson and AIG, the party whose instruction R&V was now to join.