Standard Bank London Ltd. v Apostolakis & Anor

Factual and Procedural Background

On 27th August 1997, the Defendants, a married couple residing in Greece, entered into a written agreement with the Plaintiff entitled "Terms and Conditions for Foreign Exchange in Precious Metals Margin Trading," which incorporated the Plaintiff's standard terms of business. Pursuant to this agreement, by 13th March 1998, the Defendants had entered into twenty-eight foreign exchange transactions involving forward purchases of ECUs for Greek drachma, with twelve positions remaining open when the drachma was devalued. The Defendants had deposited US $1.1 million as margin, which the Plaintiff applied in settlement of amounts owed upon closing the remaining positions.

On 18th December 1998, the Defendants initiated proceedings in Athens, alleging unlawful, arbitrary conduct and breach of contract by the Plaintiff. Prior to service of those proceedings in December 1999, the Plaintiff commenced proceedings in this jurisdiction seeking an injunction to restrain the Defendants from continuing the Athens proceedings, relying on an exclusive jurisdiction clause in the contract.

The Defendants challenged the Plaintiff's claim by raising four issues relating to the construction of the jurisdiction clause, the nature of the contract as a consumer contract, the applicability of the Brussels Convention, and the fairness of the jurisdiction clause under consumer protection regulations. The first two issues were decided by Longmore J on 19th January 2000, holding there was an exclusive jurisdiction clause and that the contract was a consumer contract. The remaining issues regarding specific invitation/advertising and unfair contract terms remained for decision.

The Plaintiff is a wholly owned subsidiary of a South African investment corporation, acting as a merchant bank with foreign exchange and money market desks. The Plaintiff had an Introducing Agreement with Eurofinance S.A. (EF), a Greek financial broker based in Athens, which introduced clients such as the Defendants.

The Defendants were introduced to the Plaintiff through EF, with the Defendants signing the relevant contractual documents on 27th August 1997. There was significant factual dispute about the nature and timing of meetings between the Defendants and EF representatives, the provision of documents, and the representations made regarding the financial products and risks involved.

The Defendants contended that EF acted as representatives of the Plaintiff in Greece, that they were given a business card and promotional material indicating this, and that they were not provided with translations of the contractual documents. The Plaintiff's representative disputed these claims, asserting the initial meeting was introductory and that documents were provided at later stages.

The court preferred the Defendants' account, finding that EF did represent the Plaintiff, made detailed presentations recommending the Plaintiff's products, provided documentation including a business card bearing the Plaintiff's logo, and that the Defendants were not furnished translations of the contractual documents despite requesting them.

The dispute culminated in the Defendants challenging the Plaintiff's closure of their positions following the drachma devaluation and the jurisdictional issues arising from the contract and proceedings in Greece and England.

Legal Issues Presented

1. Whether the Defendants are entitled to bring proceedings in Greece despite the exclusive jurisdiction clause under Article 13 and 14 of the Brussels Convention, based on whether the contract was preceded by a specific invitation or advertising addressed to them in their domicile state.
2. Whether the exclusive jurisdiction clause in the contract constitutes an unfair term under the Unfair Terms in Consumer Contract Regulations 1994 and 1999.

Arguments of the Parties

Defendant's Arguments

• The agreement lacked an exclusive jurisdiction clause; thus, Article 17 of the Brussels Convention does not apply.
• The agreement is a consumer contract within the meaning of Article 13 of the Brussels Convention.
• The contract was preceded by advertising or a specific invitation addressed to them in Greece, entitling them to bring proceedings in Greece under Articles 13, 14, and 15 of the Brussels Convention.
• The jurisdiction clause is an unfair contract term under the Unfair Terms in Consumer Contract Regulations 1994 and 1999, causing significant imbalance and surprise, especially as no translation or explanation was provided.
• Jurisdiction clauses of this nature are prima facie unfair due to the imbalance of convenience and the potential cost and inconvenience to consumers.

Plaintiff's Arguments

• The contract contains an exclusive jurisdiction clause, making Article 17 of the Brussels Convention applicable.
• The jurisdiction clause is not unfair because the contract is governed by English law and, if invalidated, the Defendants would still be required to bring proceedings in the Plaintiff's domicile under Articles 2 and 5 of the Brussels Convention.
• The Defendants were not misled as EF was not an agent of the Plaintiff, and no advertising or specific invitation was addressed to the Defendants in Greece.
• The Defendants' understanding of English was sufficient, and the Defendants had the opportunity to read the documents, which were standard and unamendable.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Benincasa v Dentalkit Srl [1997] ECR 1-3767	Interpretation of consumer contract exceptions under the Brussels Convention.	The court cited this case to emphasize that exceptions for consumer contracts must not be extended beyond their intended scope.
Director General of Fair Trading v First National Bank plc [2000] 2 WLR 1353	Good faith in contract terms and the assessment of unfair terms.	The court referred to this case to support the dual aspect of good faith: procedural (awareness and explanation) and substantive (significant imbalance).
Oceano Grupo Editorial SA v Rocio Murciano Quintero (C-240/98)	Unfairness of exclusive jurisdiction clauses in consumer contracts.	The court relied on this European Court decision to find that exclusive jurisdiction clauses conferring jurisdiction on the seller’s courts may be unfair if they hinder consumer rights.

Court's Reasoning and Analysis

The court carefully examined the factual matrix, preferring the Defendants' detailed and consistent evidence over that of the Plaintiff's representative. The court found that EF acted effectively as representatives of the Plaintiff in Greece, making specific invitations and recommendations to the Defendants, supported by documentary evidence such as a business card bearing the Plaintiff's logo and promotional materials. The court held that the contract was indeed preceded by a specific invitation addressed to the Defendants in their domicile, satisfying the threshold requirement of Article 13 of the Brussels Convention, thereby permitting the Defendants to bring proceedings in Greece despite the exclusive jurisdiction clause.

Regarding the unfair terms issue, the court acknowledged the protections afforded to consumers under the Unfair Terms in Consumer Contract Regulations 1994 and 1999. It found that the jurisdiction clause caused a significant imbalance to the detriment of the Defendants, who were surprised by the clause, had no translation or explanation, and faced potential cost and inconvenience in litigating in England. The court considered relevant authorities, including the European Court’s decision in Oceano, and concluded that the jurisdiction clause was contrary to good faith and thus not binding on the Defendants.

Holding and Implications

HOLDING: The court held that the Defendants are entitled to bring proceedings in Greece under Articles 13 and 14 of the Brussels Convention because the contract was preceded by a specific invitation addressed to them in their domicile. Furthermore, the exclusive jurisdiction clause in the contract is deemed an unfair term under the Unfair Terms in Consumer Contract Regulations and is therefore not binding.

IMPLICATIONS: As a direct consequence, the Defendants may pursue their claims in Greece despite the jurisdiction clause favoring English courts. The ruling underscores the importance of consumer protection in cross-border contracts and the necessity of clear, fair jurisdiction clauses, especially where language barriers and lack of explanation exist. No new precedent beyond the application of existing consumer protection principles was established.