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1. The Plaintiff also seeks a declaration that the Defendant is obliged to indemnify the Plaintiff under the aforesaid contract and an Order directing the Defendant to pay such sum to the Plaintiff as is necessary to give full effect to the aforesaid indemnity. This Court's power under the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988 to determine the claim pursuant to, inter alia, Article 8 of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (the Convention) is invoked.

2. The Defendant has entered a limited appearance to the proceedings, limited to contesting the jurisdiction of this Court to hear and determine the Plaintiff's claim, but, without prejudice to such appearance, the Defendant reserves the right in the alternative to defend the proceedings. On this application the Defendant seeks an Order pursuant to Order 12, Rule 26 of the Rules of the Superior Courts, 1986 setting aside the service of the proceedings on the Defendant on the grounds that the insurance policy (if any) upon which the Plaintiff relies is the subject of a clause conferring sole jurisdiction to hear disputes between the parties upon the Tribunal de Commerce Paris.

3. The underlying event which gave rise to the proceedings was a fire at the United Meat Packers plant at Ballaghadereen, County Roscommon on 7th January, 1992 during which meat said to be worth £22 million which the Plaintiff, as intervention agent for the European Community, had in cold storage there is alleged to have been destroyed.

4. The Defendant's application is grounded on an Affidavit sworn by Camille Hamen, who in 1991 was the Director General of Office de Souscription d'Assurance Transport S.A. (O.S.A.T.), a French company, which held an appointment authorising it to write transport insurance policies in the name of the Defendant, a company registered in Germany providing maritime and transport, fire and miscellaneous risk insurance. Under French law O.S.A.T. was authorised to write insurance risks for transport by sea, air, land, fire, accident and miscellaneous risks in accordance with the French Insurance Code. In his Affidavit, Mr. Hamen acknowledged that he was prepared, on behalf of the Defendant and other insurers from whom he held an agency, to issue an insurance policy to the Plaintiff among other potential customers on terms and conditions detailed to the Plaintiff's broker, Mr. David Gresty of D.B. Agencies S.A. of Monaco. However, he further averred as follows:-

5. Mr. Hamen then went on to describe the circumstances under which he became involved in the insurance on behalf of the Defendant. In October 1991 he was introduced to Mr. Gresty who had twelve Irish clients involved in the beef trade who required transport insurance cover. From enquiries he made in the trade Mr. Hamen learned that the insurance of Irish beef had been covered by a policy on the French market and that the latter had been cancelled and that this was the reason Mr. Gresty was seeking several quotations and an alternative solution. Mr. Hamen was offered a group of risks, fifteen policies in all, on the same conditions as the previous insurance. He rejected these conditions and he also rejected three of the proposed parties. He drafted new special conditions. On 25th October, 1991 he was told by Mr. Gresty that two companies accepted these conditions and that a number of other customers would also probably accept them but he wanted to leave the policies with them for perusal. Mr. Hamen was asked to provide an interim cover while awaiting the possible acceptance of the conditions.

6. Mr. Hamen averred that he gave the cover note dated 28th October, 1991 to Mr. Gresty along with a draft of intended policy special conditions. In this document he listed the financial and technical conditions under which certain insurances could be set up at a later stage under specified terms and conditions. He further averred as follows:-

7. Mr. Hamen referred to the second paragraph of the cover note wherein, he averred, it was indicated that "any insurance cover" was subject to "French Policies that is to say the usual general conditions of the French policies". He averred that this phrase referred to the general conditions of transport and marine insurance given by him to Mr. Gresty on 28th October, 1991. He also referred to the draft policy dated 8th November, 1991 in which it was provided that the general conditions of cover were:-

8. In each of the foregoing policies, prints of which he exhibited, it was provided that proceedings could only be brought against the insurer before the Commerce Tribunal of the place in which the policy was written, in this case, Paris. Mr. Hamen further averred that "Mr. Gresty knew that the incorporation of the terms of these standard policies constituted the basis of the document entitled 'cover note'". Although the policy of the Plaintiff had been drafted but not issued, it would necessarily have included "the standard policies", if it had been issued.

9. Mr. Hamen also averred that the text of the draft policies would have covered the loss of goods in transit or transported by ship, aeroplane or truck. The storage of goods was limited to goods that were to be transported or had just been transported.

10. The Defendant also relied on an Affidavit sworn by Andre Louis Simon, a French lawyer. Mr. Simon averred in relation to the cover note of 28th October, 1991 that -

11. Mr. Simon further averred that, if the Plaintiff had completed the transaction by subscribing an insurance policy, it would have been drawn up on a French marine insurance policy printed form on an "all-risks" basis, Article 33 of which states that the insurer can only be sued before the Commerce Tribunal of the place in which the policy was subscribed.

12. In response to the Defendant's application, the Plaintiff filed two Affidavits, one sworn by Anthony Van Hagen, a French lawyer, and the other sworn by Padraic Smith, an Irish insurance broker, neither of whom, apparently, was involved in the transaction in October 1991.

13. The cover note was headed O.S.A.T. and Alte Leipziger. It was addressed to D.B. Agencies for the attention of Mr. Gresty and was dated 28th October, 1991. I propose outlining in some detail the provisions of the cover note and, in particular, the provisions which were referred to in the course of the submissions.

14. The first paragraph of the cover note was in the following terms:-

15. The "Department of Agriculture Limited" was named as one of the insured and the relevant policy number for it was given as 15.002. It was submitted by Ms. Finlay, on behalf of the Plaintiff, that the foregoing provision indicates that the storage risk was separate and self-contained and that it was to come into operation on a different day to the other risks.

16. In the second paragraph it was stated as follows:-

17. Mr. Shipsey, for the Defendant, acknowledged that the words "(which takes precedence)" merely indicated that the French language version would take precedence. Mr. Van Hagen in his Affidavit pointed out that the reference in the cover note is to "French Policies" and there is no specific reference to the printed forms of French marine insurance policies exhibited in Mr. Hamen's Affidavit, or to the exclusive jurisdiction of the French Courts.

18. Later in the cover note it was stated that two "sorts of guarantee" were presented and these were set out as:-

19. The tariffs were then set out in terms of a percentage of Ordinary Rate and a distinction was made between the tariffs applicable to journeys from Ireland to certain named destinations and journeys from a Community country to other named destinations, but unhelpfully this distinction was denoted by categorisation as A) and B). There followed a provision which stated:-

20. Mr. Shipsey contended on behalf of the Defendant that this latter provision referred to the two "sorts of guarantees" - storage and transports - and not merely to the tariffs. Ms. Finlay contended that this construction did not make sense but, in any event, the provision indicated when the indemnity terminated, not when it commenced.

21. Rates were then stipulated for over-land transport within Ireland and from Ireland to any country in the E.E.C. and there followed a statement in the following terms:-

22. Ms. Finlay suggested that this provision indicated that marine cover was only one aspect of the cover being provided.

23. There followed a number of detailed provisions one of which was in the following terms:-

24. Mr. Shipsey submitted that the foregoing provision can only refer to the conditions of the standard French marine insurance policy, because there are no policy conditions set out in the cover note. I am doubtful that this submission is correct.

25. A special provision was included in relation to policy no. 15.002 in the following terms:-

26. Mr. Shipsey submitted that this provision must be read in the context that Mr. Gresty was looking for transport insurance for the twelve customers he represented and that the Plaintiff is bound by what was sought by Mr. Gresty, which I understand to mean that the Defendant offered transport insurance only to the Plaintiff.

27. In relation to all twelve policies the final provision was in the following terms:-

28. Ms. Finlay submitted that this provision was inconsistent with the Defendant's contention that the Plaintiff was only on cover for seven days.

29. The cover note was expressed to be issued in Paris on 28th October, 1991 and was signed by Mr. Hamen on behalf of Alte Leipziger and O.S.A.T.. Mr. Shipsey pointed out that what appears to be the signature of Mr. Gresty also appears at the foot of the cover note but, as the apparent signature has not been authenticated by any of the deponents, I have had no repard to it.

30. The draft policy exhibited in Mr. Hamen's affidavit was entitled "Policy (Cargo According to Risk) No. 15002" and the date 8th November, 1991 appeared at the end of the draft. Ms. Finlay submitted that it appeared as if the draft was not given to Mr. Gresty when the cover note issued on 28th October, 1991 and, in support of this submission, she pointed to a number of apparent differences in the cover proposed under the draft policy from the cover effected under the cover note. First, while the cover note provided for two types of indemnity, namely, storage, including fire but excluding catnat, and transport, in stark contrast, the terms of the draft policy provided for the exclusion of fire cover for storage. This is reflected in a number of the provisions of the draft policy. For example, Article II of the special conditions, dealing with cover during the period in the refrigerated warehouse, expressly excluded damage by fire and also risks covered by P.13a of a fire policy and Article II contained a statement, which was emphasised as being important, in the following terms:-

31. Secondly, under the terms of Article II of the draft policy, the duration of the insurance cover during the storage period in the refrigerated warehouse or within its compound was to be from unloading to reloading. Ms. Finlay suggested that no such limitation is to be found in the cover note. Ms. Finlay also referred to Clause 7 of Article I of the special conditions in relation to cover during transport which was in the following terms:-

32. Mr. Smith, in his Affidavit, averred that in his experience a reference to insurance clauses in the English market in the context in which the reference arises in the special condition quoted above is a reference to the Institute Cargo Clauses (A) (CL 252) and Institute Cargo Clauses (Air) (CL259), both of which contain provisions to the effect that the insurance thereby effected is "subject to English law and practice". In this context, Ms. Finlay also referred to a provision of the cover note, to which I have not already alluded, to the effect that each insured should have an option, as would be shown in his policy, to take out a counter insurance for FOB sales, on the same guarantees as those laid down by the buyer in the exporting country. She submitted that, even if the effect of the reference to "the French policies" in the second paragraph of the cover note was that the general conditions of the three French Policies in each of them was implied into the contract evidenced by the cover note, the existence of these provisions raises a doubt as to the automatic implication of the jurisdiction clauses in the three French policies or, at any rate, suggests that there was not an unambiguous agreement on jurisdiction.

33. Section 3 deals with jurisdiction in matters relating to insurance. Article 8 provides that an insurer domiciled in a Contracting State may be sued, inter alia, in the courts of the State where he is domiciled, or in another Contracting State, in the courts for the place where the policy holder is domiciled.

34. Article 17 of the Convention, as amended by the 1978 Accession Convention, the 1982 Accession Convention and the 1989 Accession Convention, the text of which is contained in the First Schedule of the Jurisdiction of Courts and Enforcement of Judgments Act, 1993 (the Act of 1993) provides as follows:-

35. It is common case that, as these proceedings were initiated after the coming into force of the Act of 1993 on 1st December, 1993, by virtue of the Jurisdiction of Courts and Enforcement of Judgments Act, 1993 (Commencement) Order, 1993 (S.I. 330 of 1993) it is the foregoing version of Article 17 which is applicable in determining the issue of jurisdiction.

36. Article 12, which is in Section 3 of the Convention, provides that the provisions of Section 3 may be departed from only by an agreement on jurisdiction which falls within one of the five succeeding paragraphs, paragraph (5) referring to an agreement -

37. Article 12A, in so far as it is relevant for present purposes, provides as follows:-

38. The Plaintiff's claim relates to insurance and is brought by the Plaintiff, claiming to be a policy holder, against the Defendant as insurer. It is not disputed that the Plaintiff is domiciled within the jurisdiction of this Court, nor is it disputed that as a policy holder, which he claims to be, under Article 8 of the Convention he may elect to sue the Defendant, as insurer, in this jurisdiction. The Defendant seeks to displace the jurisdiction of this Court in reliance on the existence of an agreement between the parties that the French Courts were to have exclusive jurisdiction. To have legal force, such agreement must not be contrary to the provisions of Article 12 and must comply with the formal requirements stipulated in Article 17. Accordingly, the issues which arise for determination are:

39. In my view, Ms. Finlay's submission that this Court's jurisdiction is ousted only if all three questions are answered in the affirmative, is correct. Moreover, in my view, her submission that, in relation to each question, the onus of proof is on the Defendant, in that once it is accepted that Article 8 allows the Plaintiff to choose this jurisdiction, the onus is on the Defendant to show that Article 8 is overridden, is also correct. Indeed, Mr. Shipsey agreed with this proposition.

40. The Plaintiff's claim is that he had a contract of insurance with the Defendant evidenced by the cover note dated 28th October, 1991 and that that contract still subsisted on 7th January, 1992 and covered the damage alleged to have been incurred by the Plaintiff, namely, the destruction of meat in storage by fire. No evidence has been adduced by the Plaintiff as to the making of the contract or its terms and, in particular, no affidavit has been sworn by Mr. Gresty, the broker who negotiated the contract on behalf of the Plaintiff, or by the Plaintiff or any officer of the Plaintiff. The only evidence adduced by the Plaintiff, the Affidavits of Mr. Van Hagen and Mr. Smith, comprises comment on the evidence adduced by the Defendant, the Affidavits of Mr. Hamen and Mr. Simon and the documents exhibited in Mr. Hamen's Affidavit, and opinion.

41. Accordingly, the only evidence before the Court as to the agreement reached between Mr. Hamen, as the agent for the Defendant, and Mr. Gresty, as the agent for the Plaintiff, is Mr. Hamen's Affidavit. I have already outlined the contents of Mr. Hamen's Affidavit. Ms. Finlay stressed that Mr. Hamen does not aver that the cover note incorporated the French Policies. It is undoubtedly the case that the Affidavits sworn in English by the foreign deponents in this matter give rise to difficulties of interpretation and these difficulties are compounded by the fact that the cover note and the draft policy were written in French. However, in paragraph 12 of his Affidavit, Mr. Hamen explicitly referred to the second paragraph of the cover note, which I have quoted above, and gave his understanding of that paragraph, namely that "any insurance cover" was to be subject to the French Policies. Notwithstanding Ms. Finlay's suggestion that it is a submission rather than a statement of fact, I cannot interpret this sworn statement as meaning other than that all cover offered by the Defendant, including the interim cover offered in the cover note, was offered on terms that it was to be subject to the French Policies. Mr. Hamen then identified the French Policies as the three policies, which he itemised, having averred that he gave the general conditions to Mr. Gresty on 28th October, 1991. Later, in paragraph 13, Mr. Hamen also averred that Mr. Gresty knew that the incorporation of the terms of these standard policies constituted the basis of the cover note. In my view, the evidence is not open to the interpretation that the agreement evidenced by the cover note was an agreement that the general conditions of the French Policies would be incorporated into the policy to be issued to the Plaintiff in due course but that the interim cover granted by the cover note did not incorporate the general conditions. Such interpretation would ignore Mr. Hamen's explicit averment that the second paragraph of the cover note meant that "any insurance cover" was to be subject to the provisions of the French Policies.

42. Accordingly, I find that the evidence establishes that the general conditions of the three French Policies itemised in Mr. Hamen's Affidavit were incorporated into the cover note, including the conditions giving exclusive jurisdiction to the Commerce Tribunal of Paris. It follows that the contract evidenced by the cover note contains an agreement conferring exclusive jurisdiction on the Commerce Tribunal of Paris. I further find that the reference in the draft Policy to "insurance clauses in the English market" does not impact on the contract or introduce any ambiguity as to the chosen jurisdiction.

43. Before considering the remaining two issues which arise, I propose commenting on the relevance to the issues I have to decide of the decision of the European Court of Justice in Benincasa -v- Dentalkit Srl. , (case C-269/95, judgment of 3rd July, 1997). Mr. Shipsey relied on this decision in support of his contention that the Defendant may invoke an exclusive jurisdiction clause which is contained in an agreement whose existence it nonetheless disputes. In Benincasa, the Court was concerned with a reference by a German Court for a preliminary ruling on the question whether the Court of a Member State specified in a jurisdiction clause in a franchising agreement, has exclusive jurisdiction pursuant to the first paragraph of Article 17 even when the action is, inter alia, for a declaration of the invalidity of the franchising agreement. The Court's answer was that the courts of a Contracting State which have been designated in a jurisdiction clause validly concluded under the first paragraph of Article 17, also have exclusive jurisdiction where the action seeks in particular a declaration that the contract which contained the clause is void. The following passage from the judgment of the Court explains its reasoning:-

44. The Court also stated that it is for the national court to interpret the clause conferring jurisdiction invoked before it in order to determine which disputes fall within its scope.

45. My understanding of the Defendant's position is that the cover note does evidence the existence of a contract of insurance but it was a contract of limited duration and no longer subsisted from 7th January, 1992. The Plaintiff's claim is predicated on the continued subsistence of the contract evidence by the cover note up to 7th January, 1992. Accordingly, the issue is not as to the existence of the contract but as to its effect. While the basis on which the Benincasa case was cited appears to be a non-issue, I quoted it in extenso because, it contains the most recent pronouncement of the European Court of Justice on Article 17 and it sets out the fundamental principles which must guide this Court in determining the issues which arise in the instant case.

46. Mr. Shipsey contended that the agreement on jurisdiction he contends for is within the parameters of Article 12 and, in particular, that it is an agreement "which relates to a contract of insurance in so far as it covers one or more of the risks set out in Article 12A" [Article 12(5)]. The risks set out in Article 12A which were pointed to as being relevant are:-

47. Ms. Finlay made two submissions on the applicability of the provisions of Article 12 relied on by the Defendant.

48. First, she submitted that to come within Article 12(5), a jurisdiction agreement must be limited to risks specified in Article 12A. A jurisdiction agreement which embraces both risks stipulated in Article 12A and risks outside the terms of Article 12A is contrary to the provisions of Article 12 and impermissible. In support of this submission, Ms. Finlay relied on the decision of the English Court of Appeal in Charman -v- W.O.C. , (1993) 2 L.I. Rep. 551, upholding the decision of Hirst J. at first instance ((1993) 1 L.I. Rep. 378). In his judgment, Staughton L.J. stated at page 557:-

49. For my part I reach the same conclusion as the judge but by a slightly different route. In my judgment it was right to imply the words ' and no other '. That is because art. 12A(4) makes express provision as to what additional risks or interests may be included in a contract of insurance if it is to qualify under art. 12A as a whole. It cannot have been the intention that yet more risks or interests could be included even if they were not justified by art. 12A(4), since that would have one of two consequences: (i) The jurisdiction clause would be valid in respect of art. 12A risks or interests, but not for others in the same contract of insurance. This would be a disaster. It would entail litigation of the same or nearly the same issue in two different jurisdictions, which is contrary to the purpose of the Convention as a whole. (ii) Alternatively, the clause would be valid for the whole contract, even though it covered some risks or interests not within art. 12A. Why then was par. (4) of art. 12A included? I realise that par. (4) was said to be free-standing (see Professor Schlosser, par. 147), so that there maybe a valid jurisdiction clause in a policy which only covers par. (4) risks or interests. But I cannot believe that this was the only or main reason for including that paragraph."

50. Adopting the foregoing reasoning, I am of the view that the submission made by Ms. Finlay is correct and that any jurisdiction agreement must be limited to risks specified in Article 12A. I am also of the view that, applying Article 12A as so construed to the facts established in this matter, the jurisdiction agreement relied on by the Defendant relates to a contract of insurance which covers risks which are not within the ambit of Article 12A. I reach this conclusion without straying into any substantive issue on the basis that the cover note on its face provided for a separate and distinct indemnity for storage simpliciter, which was clearly intended to be a "stand alone" indemnity for a "stand alone" risk unconnected with transport or transit, whether by land, sea or air.

51. The second submission made by Ms. Finlay related to the proper construction of paragraph 4 of Article 12A and she contended for a narrow construction of the expression "risk.....connected with". Specifically, she submitted that this court should adopt the narrow construction accepted by Hirst J. in Charman -v- W.O.C. (at page 384), namely, that "connected with" is equivalent to "ancillary to" or "accessory to", so that connected risks must be ancillary to or accessory to risks mentioned in paragraph 1 to 3. This interpretation, it was submitted, is to be preferred to the construction of paragraph 4 to be found in the judgment of Staughton L.J. in the Court of Appeal. In his consideration of Article 12A, Staughton L.J., considered the report of Professor Peter Schlosser on the 1978 Accession Convention, which, by virtue of Section 4 of the Act of 1993, may be considered by this Court when interpreting any provision of the Convention and must be given such weight as is appropriate in the circumstances. Staughton L.J., rejecting the interpretation that "connected with" is synonymous with "accessory to" or "ancillary to", said at page 557:-

52. Ms. Finlay submitted that in adopting a broad, rather than a narrow, construction of Article 12A, the Court of Appeal was ignoring a fundamental rubric in construing the Convention, namely, that exceptions, and Article 12A is an exception, must be strictly construed.

53. Aside from the submissions as to the proper construction of Article 12A in the context of Article 12(5), Ms. Finlay argued that, in any event, the Defendant had laid no evidential basis for its contention that the contract of insurance at issue covered a risk within the ambit of paragraph 4 by connection to paragraph 1(b). She further submitted that, even if the court were to find that the Defendant has laid the evidential foundation to embark on an examination whether there is any connection or link between the storage cover provided for under the cover note and any transport or transit which would include ships and aircraft as envisaged in paragraph 1(b), on which ever test of the meaning of the expression "risk......connected with" in paragraph 4 one applies, whether it is the test applied by Hirst J. or the test applied by the Court of Appeal, the connection or link has not been established. Of particular importance, it was submitted, in this context is the specific provision in the cover note in relation to Policy No. 15.002 to the effect that there was little transport with a lot of storage and also the provision that a special rating agreement would be drawn up in relation to the business. It is quite clear on the face of the cover note, it was submitted, that the storage cover was not ancillary or accessory to the transport cover, the test applied by Hirst J. and was disproportionately large compared with the transport cover, the test applied by the Court of Appeal.

54. I find it unnecessary to come down on the side of either the view of Hirst J. or the view of the Court of Appeal as to the proper construction of the expression "risk......connected with". I can find no evidence on the face of the cover note or in the affidavit of Mr. Hamen or the other documents exhibited in it or in the affidavit of Mr. Simon that the storage cover provided for the Plaintiff in the cover note was in any sense connected with transit by sea or air. Moreover, it is quite clear on the face of the cover note itself that it was the transport element which was ancillary or accessory to the storage element and not vice versa and that the storage element was large and, having regard to the necessity for separate rating agreement, I think it is reasonable to infer disproportionately large by comparison to the transport element.

55. Accordingly, I find that the agreement on jurisdiction does not fall within the ambit of any of the paragraphs set out in Article 12 and, accordingly, is contrary to Article 12. In the circumstances, the jurisdiction of this Court is not prorogued by virtue of Article 17.

56. Having held that the agreement on jurisdiction is contrary to Article 12, strictly speaking, the issue as to whether the agreement on jurisdiction complies with the formal requirements of Article 17 does not arise. Nonetheless, as Counsel for both parties addressed this issue comprehensively in their written and oral submissions, I consider I should express a view on it.

57. The most recent decision of the European Court of Justice referred to by Counsel in the context of this issue in which Article 17 was considered is MSG -v- Gravieres Rhenanes (1997) ECR I - 911. Although the Court was there considering a version of Article 17 which predated the Lugano Convention, the following passage from the judgment sets out the rationale underlying the formality requirements in Article 17 and the fundamental principles by which a Court should be guided in applying them:-

58. In considering whether the formal requirements of Article 17 have been complied with in relation to the agreement on jurisdiction contended for by the Defendant, the starting point must be the finding I have made that the general conditions of the French Policies, including the relevant jurisdiction clauses, were incorporated into the cover note. It is implicit in that finding that there was consensus on the jurisdiction clauses. The uncontroverted testimony of Mr. Hamen is that, in addition to the cover note, he gave the general conditions to Mr. Gresty on 28th October, 1991, and Mr. Gresty knew that the incorporation of the general conditions constituted the basis of the cover note. The Plaintiff's claim is for enforcement of the contract of insurance evidenced by the cover note.

59. In the light of the uncontroverted evidence of the dealings between the Defendant's agent, Mr. Hamen, and the Plaintiff's broker, Mr. Gresty, the only reasonable inference is that there was an oral agreement between the parties, including agreement on the issue of jurisdiction, and that the agreement is evidenced in writing by the cover note and the general conditions of the French Policies. This conclusion, I believe, is in line with the judgment of the European Court of Justice in Tilly Russ -v- Haven (1984) ECR 2417.

60. However, this conclusion is immaterial having regard to the finding that the agreement on jurisdiction is contrary to Article 12.

61. The relief sought by the Defendant is refused.