THE SUPREME COURT

Keane C.J.
Denham J.
Murray J.
McGuinness J.
Hardiman J.
67/ 98

BETWEEN:

THE MINISTER FOR AGRICULTURE, FOOD AND FORESTRY

Respondent/Plaintiff

and

ALTE LEIPZIGER VERSICHERUNG AKTIENGESELLSEHAFT
(t/a ALTE LEIPZIGER)

Appellant/Defendant 

JUDGMENT delivered the 23rd day of February 2001 by Keane C.J. [nem. diss.]

Introduction

	This is one of a series of cases which has arisen out of a fire at the United Meat Packers Plant at  Ballaghaderreen, Co. Roscommon on 7th January 1992.  As a result of the fire, meat said to be worth £22,000,000 is alleged to have been destroyed.  The meat had been delivered to the plant by the plaintiff/respondent (hereafter “the Minister”) in his capacity as intervention agent on behalf of the European Communities. 

	In the proceedings, the Minister claims a declaration that a contract of insurance between the Minister as insured and the defendant (hereafter “Alte Leipziger”) as insurer, said to be evidenced by a letter and cover slip dated the 28th October 1991, was a valid and binding contract of insurance as of 7th January 1992.  To the proceedings, Alte Leipziger have entered an appearance limited to contesting the jurisdiction of the High Court to hear and determine the Minister’s claim.  Alte Leipziger sought an order in the High Court pursuant to Order 12, Rule 26 of the Rules of the Superior Courts, 1986, setting aside the service of the proceedings on them on the grounds that the insurance policy (if any) upon which the Minister relies is the subject of a clause conferring sole jurisdiction to hear disputes between the parties upon the Tribunal de Commerce in Paris.  In a written judgment dated the 6th March 1997, the High Court (Laffoy J.) refused the relief sought by Alte Leipziger.  From that judgment and order, Alte Leipziger have now appealed to this court.

	Neither the High Court nor this court on the hearing of the appeal were concerned with the substantive dispute between the Minister and Alte Leipziger as to whether the latter are obliged to indemnify the former in respect of the damage sustained as a result of the fire.  The sole issue for determination is as to whether the High Court has jurisdiction to hear the Minister’s claim.  However, some at least of the factual background must be referred to, if the different contentions advanced on the hearing of the appeal are to be understood.

	In October 1991, Mr. David Gresty, of DB Agencies Monaco, had discussion with Mr. Camille Hamen, Director General of a firm called Ocat, as to providing transport insurance cover for 12 Irish clients (including the Minister) involved in the beef trade.  Ocat were authorised to write transport insurance in the name of Alte Leipziger.  On the 28th October 1991, pending completion of the negotiations, Mr. Hamen gave Mr. Gresty the document called a “cover note” together with a draft of intended special conditions to be included in a policy which, it was envisaged, would be issued at a later date.  That policy was never issued and Alte Leipziger claimed that this was because it was never returned signed by the Minister and that the latter never paid any premium.   It is on that basis that Alte Leipziger claim that they were not on any risk in respect of the fire in Ballaghaderreen.

	The cover note of October 28th, 1991 indicated that the insurance cover was to be subject to “French Policies”, i.e. the usual general conditions contained in such policies.  The policies in question were 
	“(a)	French marine insurance policy for cargo insurance of 30th June 1983 amended 16th February 1990;
	(b)	French insurance policy for ‘goods transported by land’ dated 7th November 1990;
	(c)	French insurance policy for ‘goods transported by air’ dated 25th October 1990.”

	Article 21 of the Goods Transported by Land Policy provided that
“With the exception of those cases foreseen in Article R114-1 of the insurance code, all litigation must be brought before the Tribunal de Commerce of the place where the policy was written.”

	In the High Court, Laffoy J. found that the general conditions of the three French policies were incorporated into the cover note, including this condition which, it is accepted, gave exclusive jurisdiction to the Tribunal de Commerce in Paris.  No appeal has been brought to this court from that finding of the learned High Court judge.

	The Minister also contended, however, in the High Court that, having regard to the relevant provisions of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial matters (hereafter “the Convention”) the jurisdiction of the High Court to hear the proceedings was not excluded by the clause in question.  That contention succeeded in the High Court and is the subject of the appeal brought by Alte Leipziger to this court.

The legal framework
	The Convention, which is given the force of law in the State by virtue of the Jurisdiction of Courts and Enforcement of Judgments Act, 1998 (which  consolidates earlier legislation) provides in Article 2 that, subject to the provisions of the Convention, persons domiciled in a contracting State are to be sued in the courts of that State.  Section 3, however, under the heading “Jurisdiction in matters relating to insurance” contains special provision concerning such cases and, specifically, in Article 8 provides inter alia that
“an insurer domiciled in a Contracting State may be sued:
	2.	In another Contracting State, in the courts for the place where the policy holder is domiciled ...”

	Under Article 12, the provisions of the section may be departed from inter alia by an agreement on jurisdiction.  Under Article 12.5, this includes 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 12a provides that
“The following are the risks referred to in Article 12.5:  
1.	Any loss of or damage to
	(a)	Sea going ships, installations situated offshore or on the high seas, or aircraft, arising from perils which relate to their use for commercial purposes; 
	(b)	goods in transit other than passengers baggage where the transit consists of or includes carriage by such ships or aircraft;
		2.	Any liability, other than for bodily injury to passengers or loss of or damage to their baggage:
		(a)	arising out of the use or operation of ships, installations or aircraft as referred to in 1(a) above in so far as the law of the Contracting State in which such aircraft or registered does not prohibit agreements in jurisdiction regarding insurance of such risks;
		(b)	for loss or damage caused by goods in transit as described in 1(b) above;
		3.	Any financial loss connected with the use or operation of ships, installations or aircraft as referred to in 1(a) above, in particular loss of freight or charter hire;	
		4.	Any risk or interest connected with any of those referred to in 1 to 3 above.”

	Alte Leipziger say that the risk in respect of which the cover note was issued was a risk or interest connected with loss or damage to goods in transit within the meaning of Article 12a 1(b) and 4, that the contract of insurance accordingly covered one of the risks set out in Article 12a and that, in the result, the provisions of Section 3, including the provision enabling the policy holder to sue in the courts of the Contracting State where he is domiciled, were effectively excluded.  The Minister says in response that the contract of insurance was in essence one in respect of the storage of the beef and was not one in respect of goods in transit by ships or aircraft within the meaning of Article 12a 1(b) or any risk connected with such insurance and that, accordingly, Article 12 did not apply.
The factual background
	Before turning to the submissions advanced in support of these contentions, I should refer to the facts in some more detail.  

	The cover note dated 28th October 1991, which specified the nature of the insurance (if any) in force in respect of the meat in storage in Ballaghaderreen, stated:
“We hereby give you for the companies listed below, and with effect from 26th October 1991 (except for the storage guarantees with effect from 1st November 1991 at zero hours) the guarantee set out below, with the description of the risks.  
“We will draw up a policy of each insured on the basis of the French Policies (which take precedence) with, on each occasion, the English translation.”

	The 12 “companies” listed as insured include the “Department of Agriculture Limited (sic)”.

	It should be noted that the cover note, in its opening paragraph, appears to draw a distinction between storage and other insurances.

	The cover note goes on to say:-
“Bearing in mind the size of the sums, we need two weeks to issue the different policies after having taken the reinsurance agreements.  We have noticed that this period would be adequate for you because within the first two weeks there would be no marine shipments higher than 20,000,000 FF., the air or land shipments being less than 5,000,000 FF. each.
“Accordingly, the guarantees which we are going to grant, which were explained below, covered by the present cover note, are therefore, until confirmation of the guarantees in excess of:
-	20,000,000 FF. Marine
-	5,000,000 FF. Land or Air.”

	The cover note further states that
“Two sorts of guarantees are presented:
	(A)	Storage on all risks storage, including fire, but excluding catnat, rated separately with
	(B)	transports, which are rated in the following manner, as appropriate.
Only policy no. 15.010 [Oxfleisch GMBH] will not include storage cover.”

	There follows a statement of the tariffs from Ireland to various countries.  They are divided into two categories under the headings (A) and (B).

	There follows a statement that
“The guarantees in A and B are understood as all risks marine insurance the guarantees of which finish after discharging in the port area and in respect of cargos which are either frozen or vacuum packed.”

	There follow provisions as to “overland transport within Ireland”, in respect of which a specific rate is to apply, and overland transport from Ireland to any country in the EEC.  In the case of one of the insured (Goodman Limited) specific rates are given for accident insurance during overland journeys.  The cover note goes on:
“As regard the marine side of this insurance, the conditions are identical to those above.”

	There follow various provisions dealing with the insurance, which are of no particular significance, save for the following:-
“Storage in Ireland:  goods insured All Risks on the policy conditions, thus p. 13 bis is understood excluding catnat at a rate of 0.047% of the value of the stock declared on the last working day of the month concerned by the insured.”

	Finally, the following appears towards the end of the cover note:
“DEPARTMENT OF AGRICULTURE Policy No. 15.002
There is little transport with a lot of storage.
It is agreed that a special rating agreement will be drawn up for this business by mutual agreement between Mr. Gresty and Mr. Hamen within the next seven days.”

	It is, of course, not in dispute that the Minister was not in the business of exporting beef to other countries, as the other insured were.  Clearly, this special provision in the cover note, referable exclusively to the Minister, reflected that factual position.  

	In his affidavit sworn in these proceedings, Mr. Hamen said that the text of the draft policies which would have been issued in the case of the Minister in pursuance of the cover note would have covered the loss of goods in transit or transported by ship, aeroplane or truck.  He also says that
“the storage of the goods was limited to goods that were to be transported or had just been transported.”

	In an affidavit filed on behalf of the Minister, Mr. Padraig Smith, an insurance broker, who said that he had considerable experience in dealing with  marine insurance, said that, in transport policies, it would be assumed that cover is provided in respect of storage incidental to transit and that frequently policies would not, because of that assumption, refer to that storage cover.  However, he said that it was also reasonably common for a policy, describing itself as a marine or other transport policy, to provide also for cover for storage which does not arise in immediate connection with any particular transportation and is thus independent of the cover for goods in transit.

Submissions of the parties
	On behalf of Alte Leipziger, Mr. Shipsey S.C. submitted that the only evidence of the discussions which took place between the representatives of Alte Leipziger and the Minister was to be found in the affidavit of Mr. Hamen and that Mr. Hamen had averred that the storage of the goods was limited to goods that were to be transported or had just been transported.  He also submitted that Mr. Smith did not indicate in his affidavit that he had any knowledge or experience of French marine or transport insurance and that, as a result, he was not qualified to offer any opinion on such insurance.

	Mr. Shipsey submitted that Section 3 of the Convention, containing Articles 12 and 12a, was itself an exception to the general jurisdiction rule in the Convention, i.e. that a defendant ought to be sued where he is domiciled.  He said that these provisions in the Convention were intended to give the policy holder, who would normally be regarded as the significantly weaker party to contracts of insurance, a special degree of protection, not found elsewhere in the Convention, in relation to jurisdiction.  That, he said, had been made clear by the opinion of the Advocate General and the judgment of the court in Case 201/82 Gerling (1983) 2503.  It was in that light that the provisions of Article 12(5), as supplemented by Article 12a, should be construed.

	Mr. Shipsey submitted that the provisions of the Brussels Convention in general, and Articles 12 and 12a in particular, should be given a purposive and not a literal interpretation.  He cited in this connection the report of Professor Schlosser which, under s. 4 of the Jurisdiction of Courts and Enforcement of Judgments Act, 1993, may be considered by the Irish courts in interpreting any provision of the Convention:  indeed, the courts are required to give such weight to the specified reports, including that of Professor Schlosser, as is appropriate in the circumstances.

	Mr. Shipsey submitted that the Schlosser Report made it clear that Articles 12(5) and 12a were included in the Convention as a result of strong representations from the United Kingdom whose representatives on the Working Party urged that the concept of social protection leading to special provisions for jurisdiction in insurance matters had no relevance where the policy holders were large undertakings, as in this case.

	Mr. Shipsey submitted that the wording of Article 12(5) made it clear that the freedom of the parties to a contract of insurance to decide upon jurisdiction applied to all contracts of insurance, insofar as they covered “one or more” of the risks set out in Article 12a.  He submitted that, giving this expression a purposive construction, it was clear that an insured entering into a contract which included one or more of the risks that would be included in a marine policy would not be entitled to choose a jurisdiction for the resolution of a dispute other than the one which had been chosen and agreed.  Mr. Shipsey said that in the present case, there was one cover note and one contract of insurance and that this expressly related to transport insurance, including marine and air.  He said that all of the twelve parties had been given transport insurance cover and eleven of them were given cover for storage risks.  The distinction between the two types of guarantee mentioned in the first paragraph was merely as to the commencement date for the cover.  He said that it had not been explained why, if the storage guarantee provided for the Minster was a “stand alone” insurance, there was no limit to the amount of the cover. 

	As to the expression “there is little transport with a lot of storage” used in reference to the Minister, Mr. Shipsey pointed out that eleven of the twelve customers were given storage cover.  He said that there was no “stand alone” storage provided in the policy.

	Mr. Shipsey submitted that, insofar as the English Court of Appeal in Charman .v. WOC (1993) 2 Lloyds Reports 551 had held that the words “and no other” should be implied at the end of Article 12(5), the decision was erroneous in law and should not be followed:  there was no warrant for inserting those words in Article 12(5).  He also took issue with the finding of Staughton L.J. in the Court of Appeal that an insurance on land based property could not be converted into an insurance within Article 12a by the inclusion of “some trivial marine risk”.  

	Mr. Shipsey further submitted that the case for an expansive and purposive construction of Article 12(5) and 12a had been reinforced by the recent decision of the Court of Justice of the European Communities in 
C - 412/98 Group Josi Re Insurance Company SA .v. Universal General Insurance Company (UGIC) (unreported:  judgment delivered 13th July 2000).  That decision had made it clear that all exceptions to the general rule that a defendant be sued in the courts of the place of his domicile are to be narrowly construed.

	Mr. Shipsey finally submitted that this was a case in which the court should seek a preliminary ruling from the Court of Justice of the EC, having regard to the provisions of the 1971 Luxembourg Protocol on the Interpretation of the Brussels Convention:  he cited in this context the decision of the court in Srl Cilfit and Another .v. Ministry of Health (1982) ECR 3415.

	On behalf of the Minister, Ms. Mary Finlay S.C. submitted that it was clear from the terms of Articles 12 and 12a and the Schlosser Report that, in order to come within Article 12a, the risk covered by the insurance must (in the context of this case) be a marine transport risk.  Land transport risks did not come within the scope of Article 12a in any way.  The findings of the learned High Court judge that the cover note provided for a separate and distinct indemnity for storage simpliciter, that there was no evidence that the storage cover provided for the respondent was in any sense connected with transit by sea or air and that the transport element of the risk was ancillary or accessory to the storage element were clearly correct and should be upheld.  Since a jurisdiction agreement had to be limited to the risks specified in Article 12a, as the trial judge had also correctly held, it followed inevitably that the risk covered could not come within Article 12a having regard to the fact that a separate storage risk was covered.

	Ms. Finlay submitted that the findings of the High Court judge in respect of these matters were fully borne out when all the provisions of the cover note were read.  The averment of Mr. Hamen that the storage was limited to goods that were to be transported or had just been transported was inadmissible:  it was an attempt by one party to give evidence of the intention of the parties to the cover note or, alternatively, to vary, add or subtract from the express terms of the cover note.

	Ms. Finlay further submitted that the decision of Hirst J. and of the Court of Appeal in Charman to the effect that the words “and no other” should be implied at the end of Article 12(5) was correct and should be followed.  As Staughton L.J. had pointed out, any other construction could have the disastrous consequence that litigation would be necessary in the case of the same or virtually the same issue in two different jurisdictions, contrary to the purpose of the Convention as a whole or would render Article 12(a)(4) meaningless.

	As to the alleged necessity for a reference to the European Court, Ms. Finlay submitted that the jurisdiction conferred upon the Court of Justice of the EC was limited to interpretation of the Convention.  In the present case, the dispute was as to the application of the Convention.  She said that in this case the application of community law was so obvious as to leave no scope for any reasonable doubt, citing Jarrett .v. Barclays Bank Plc. (1997) 2 All ER 484.
	
Conclusions
	In considering how Article 12(5) and 12(a) of the Convention are to be construed and their application in any particular case, it is helpful to refer to the report of Professor Schlosser, to which the High Court and this court are obliged to give weight where appropriate (see s. 6(2) of the 1998 Act).  At the relevant part of his report, he refers to the United Kingdom’s request for special rules for the insurance of large risks and said that it was the most difficult problem for the Working Party on the 1978 Accession Convention (which dealt with the accession of Denmark, Ireland and the United Kingdom to the Convention.)  It was accepted that, in the case of various classes of insurances in the transport industry, the concept of social protection underlying Section 3 was not relevant where the policy holders were powerful undertaking and, in addition, the risks insured were highly mobile and policies tended to change hands several times in quick succession.  The problem, Professor Schlosser noted, was one of finding a suitable demarcation line.  He summed up the conclusions of the Working Party as follows:
“The result of a consideration of all these matters is the solution which figures in the new paragraph (5) of Article 12, as supplemented by Article 12a:  agreements on jurisdiction are in  principle to be given special treatment in marine insurance and in some sectors of aviation insurance.  In the case of insurance of transport by land alone no exceptional rules of any kind appeared justified.”

	It is inevitably conceded on behalf of Alte Leipziger in this case that the insurance effected by the cover note for the benefit of the Minister was in respect of storage.  Nor was there any indication that it was storage of “goods in transit” within the meaning of Clause 1(b) of Article 12a, that being confined to cases where the transit consists of, or includes, carriage by ships or aircraft.

	Alte Leipziger are then driven to arguing that the “risk or interest” allegedly insured in this case - in respect of the storage of the meat - was “connected” with one of the risks referred to in paragraphs 1 to 3 inclusive of Article 12a.  Again, however, the only risk or interest pointed to is as to loss or damage to “goods in transit” within the meaning of 1(b).  It is true, of course, that there was one cover note in respect of all twelve of the bodies who are to be given insurance and that much of the language in the cover note is directed, as one would expect, to contracts of marine insurance.  But there is not a scintilla of evidence to suggest that at any stage the Minister was interested in obtaining marine or air insurance and the terms of the cover note itself make it clear beyond argument that two forms of insurance were contemplated, i.e. storage and transport.  When the cover note referred specifically to the Minister’s policy as involving “little transport with a lot of storage”, it must have been envisaged that such transport as there was would be by road:  at the risk of repetition, it must be emphasised again that there was not the slightest suggestion that the Minister at any stage was seeking insurance in respect of transport by sea or air.

	The arguments on behalf of Alte Leipziger are based on the proposition that there was one cover note and one contract of insurance and that the contract related to transport insurance, including transport by air and sea.  But this disregards the fact that, while there was only one contract document, it was envisaged that there would be twelve separate policies and that the one relating to the Minister would be, in practical terms, confined to storage.

	Even if that were not so, and the Minister's contract could be regarded as a contract of insurance which envisaged both storage insurance and marine or air transport insurance - and it is very difficult to see how it could be so construed - there is the further difficulty that, on any view, the contract would then cover both risks within Article 12a and risks outside Article 12a.  In this connection, I would respectfully adopt the reasoning of Lord Justice Staughton in the English Court of Appeal in Charman where he took the view that the words “and no other” must be inserted at the end of Article 12(5) explaining his conclusion as follows:-
“...  Article 12a(4) makes express provision as to what additional risks or interests may be included in the contract of insurance if it is to qualify under Article 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 Article 12a(4), since that would have one of two consequences:  (i) the jurisdiction clause would be valid in respect of Article 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.  Alternatively, the clause would be valid for the whole contract, even though it covered some risks or interests not within Article 12a.  Why then was paragraph (4) of Article 12a included?  I realise that paragraph (4) is said to be free standing (see Professor Schlosser, para. 147), so that there may be a valid jurisdiction clause in a policy which only covers paragraph (4) risks or interests.  But I cannot believe that this was the only or main interest for including that paragraph.”

	Moreover, that case illustrates yet another difficulty in the path of the argument on behalf of Alte Leipziger:  the fact that, whatever transport element there may have been in the contract of insurance, it was clearly of extremely minor significance when compared with the storage element.  I would again adopt with approval the following comment by Lord Justice Staughton in Charman:-
“I would ... say that the extra risks or interest covered by para. (4) must not be disproportionately large compared with those covered by paras. (1) to (3).  They must not be the main or almost the main subject matter of the contract, but a lesser part of it.  The tail must not be allowed to wag the dog, or an insurance on land based property ... be converted into an insurance within Article 12a by the inclusion of some trivial marine risk.”

	I am also satisfied that this is not a case in which there is any necessity for a reference to the Court of Justice of the EC pursuant to the 1971 Protocol to the Convention.  As I have indicated, the case, in my view, can be determined by the application of Articles 12 and 12a of the Convention to the facts of the present case without choosing between the two constructions of Article 12(5) advanced on behalf of Alte Leipziger and the Minister respectively.  However, I am satisfied that in any event the law was correctly stated in the Court of Appeal in Charman and is so obvious at this stage as to leave no scope for any reasonable doubt, applying the principles laid down by the Court of Justice of the EC in Cilfit.

	I would dismiss the appeal and affirm the order of the High Court.