High Court confirms enforceability of jurisdiction clause agreed electronically by "click-wrapping"
High Court confirms enforceability of jurisdiction clause agreed electronically by “click-wrapping”
The defendant, an online travel agent in Romania, contested the jurisdiction of the Irish courts to hear and determine the plaintiff airline's substantive case, concerning alleged screen-scraping. The defendant claimed that Romania was the proper jurisdiction in which to hear all the plaintiff's claims, following the general rule under Article 4 of the Regulation, which provides that a defendant should be sued in its place of domicile. The plaintiff sought to displace the general rule in Article 4 and relied upon Article 25(1)(a) and (c) (choice of jurisdiction), as well as Articles 7(1) and (2) (special jurisdiction) of the Regulation.
Issues relating to the applicability of jurisdiction clauses are determined as a matter of European law.
Article 4 of the Regulation provides for the general rule that persons shall be sued in the courts of the Member State where they are domiciled.
Article 7(1) and (2) of the Regulation contain "special jurisdiction" rules. Article 7(1) provides that "A person domiciled in a Member State may be sued in another Member State in matters relating to a contract, in the courts for the place of performance of the obligation in question".
Article 7(2) of the Regulation provides that "A person domiciled in a Member State may be sued in another Member State…in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur".
Article 25(1)(a)–(c) of the Regulation, entitled "Prorogation of Jurisdiction", permits the parties to a contract, regardless of their domicile, to agree that the courts of a particular Member State are to have jurisdiction to settle any disputes which arise. The agreement conferring jurisdiction must either be:
in writing or evidenced in writing;
in a form which accords with practices which the parties have established between themselves; or
in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to parties to such contracts.
Article 25(2) further provides that "Any communication by electronic means which provides a durable record of the agreement shall be equivalent to 'writing' ".
Essential elements of a click-wrap agreement
The Judge summarised the essential elements of a click-wrap agreement as follows:
there is reasonable and adequate notice of the existence of terms or conditions (which contain the jurisdiction clause) before the user proceeds to click a particular button;
the full content of the terms or conditions (which contain the jurisdiction clause) are accessible, for example by hyperlilnk, before the user proceeds to click the button; and
it is made clear to the user that by clicking a particular button, he or she will be taken to have assented or agreed to those terms or conditions from that point onwards.
Enforceability of jurisdiction clause under Article 25 (1)(c) of the Regulation
It is up to the national courts to determine whether a jurisdiction clause meets the requirements of Article 25. In the present case, the court noted that in Ryanair v On the Beach, Judge Laffoy found the agreement as to jurisdiction was enforceable under the predecessor of the current Article 25(1)(c), as it was effected via a click-wrap agreement, which was a form of agreement which accords with a usage in international trade or commerce of which the parties are aware or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in this particular trade or commerce.
In coming to her conclusion, Judge Laffoy found:
the contract came under the heading of international trade or commerce because the plaintiff was an international airline selling flights and other services through its website and the defendant was a travel agent specialising in online business and in the course of that business interacted with the plaintiff's website;
that the evidence clearly established that within the airline and travel agency online business, the practice is that the website user becomes contractually bound by clicking or ticking a box by which the user demonstrates assent or agreement to the terms displayed by the website owner; and
the evidence before the court demonstrated that the defendant was aware of this practice.
Judge Ní Raifeartaigh noted that although the facts of the present case were slightly different to those pertaining in Ryanair v On the Beach, the reasoning of Judge Laffoy in that case (approved on appeal by the Supreme Court) applied with equal force, and the conditions of Article 25(1)(c) were satisfied. Accordingly, the jurisdiction clause conferring jurisdiction on the Irish courts was enforceable.
Enforceability of jurisdiction clause under Article 25 (1)(a) of the Regulation
In contrast, the EU Court of Justice, in El Majdoub v CarsOnTheWeb (Case C-322/14), found a click-wrap agreement met the requirements of Article 25(1)(a). However, Judge Ní Raifeartaigh distinguished that case on the basis that the purchaser had actively assented to the terms and conditions on the CarsOnTheWeb website (including the jurisdiction clause therein) by clicking the relevant box on the seller's website, and there was no element of auto-ticking.
As Articles 25(1) (a), (b) and (c) set out alternative grounds for an enforceable jurisdiction agreement, it was sufficient in the present case that the plaintiff had met the requirements of Article 25(a)(c), in order for the jurisdiction clause to be enforceable.
Article 7 – Special Rules of Jurisdiction
The court also concluded that the plaintiff had discharged the burden of proof to show that this case fell within Article 7(1) of the Regulation, and the Irish courts had jurisdiction pursuant to that provision.
In regard to Article 7(2), the judge was not satisfied that there had been adequate argument before her (from either side) as to how it was alleged that Ireland was the place “where the harmful event occurred or may occur” as that phrase has been interpreted in the European authorities. She therefore declined to reach a conclusion on this aspect of matters.