Michael Tappin KC, sitting as Deputy Judge, has issued an interim judgment in the ongoing IPEC proceedings between Seraphine Limited and Mamarella GmbH. The judgment highlights some of the difficulties one can face when trying to rely on and enforce terms and conditions against a previous partner where terms are not clear, do not reflect the practical ways in which the parties trade with each other, or where there is lack of evidence of terms being in effect between the parties. This serves as a reminder to retailers to have your house in order and to conduct regular reviews of your terms to ensure their relevance, accuracy and applicability.
The Claimant, Seraphine, is a well-known retailer of maternity clothing. It previously had a trading relationship with Mamarella, who would purchase and resell maternity clothing from Seraphine. The relationship ended when Seraphine alleged unregistered design infringement against Mamarella.
The purpose of this interim hearing was to determine whether Seraphine was entitled to serve the proceedings out of the jurisdiction on Mamarella without permission of the Court (which it had done twice, once via post in June 2023 and again under the Hague Convention via the Foreign Process Section in October 2023).
Seraphine relied on CPR 6.33(2B)(b) which states that “The claimant may serve the claim form on a defendant outside of the UK where…(b) a contract contains a term to the effect that the court shall have jurisdiction to determine that claim.”
The success of Seraphine (spoiler alert – it is partially successful in this hearing) was dependent at least in part on arguments relating to interpretation of certain definitions and terms in Seraphine’s terms and conditions of sale, which was signed by both parties in 2021 (I refer to this as the “2021 Terms”).
Seraphine argues that the court (i.e. in England and Wales) has jurisdiction to determine its claim against Mamarella and that it could serve the proceedings out of the jurisdiction without the court’s permission pursuant to CPR 6.33(2B)(b) because clause 25 of the 2021 Terms stipulates the exclusive jurisdiction of the courts of England and Wales.
However, Mamarella argued that the exclusive jurisdiction clause did not apply, and therefore that Seraphine could not serve these proceedings outside the jurisdiction without permission, because there was no “Contract”, as defined by the 2021 Terms. “Contract” is defined in the 2021 Terms as a contract for the sale of Goods (as defined) which are the subject of an Order (as defined). Mamarella said that it placed orders but those orders were not Orders as defined, so the goods did not count as Goods, it was not a Buyer, and a Contract was not formed. The effect being that the 2021 Terms did not apply.
Part of the argument relating to whether orders placed by Mamarella constituted an Order swung on the fact that the wording of clause 2 of the 2021 Terms included definition of an Order being “…all sales of Goods by the Company [Seraphine] to the Buyer arising from acceptance of the order overleaf…” [my emphasis]. Mamarella argued that the “order overleaf” should be construed as extending only to orders that were associated with the 2021 Terms. I.e. that an order placed by a Buyer had to stipulate that it would be on the Terms for it to be an Order. As there was no evidence that was the case for any order placed by Mamarella after signing the 2021 Terms, there was no good arguable case that there was a Contract containing the England & Wales exclusive jurisdiction clause.
Ultimately, Mr Tappin KC did not accept Mamarella’s arguments. He found that Seraphine has a good arguable case that “the order overleaf” in clause 2 means each order subsequently submitted by Mamarella, and therefore those orders (if accepted by Seraphine) will be on the basis of the 2021 Terms and give rise to a Contract, which has the exclusive jurisdiction clause nominating England and Wales. He therefore held that Seraphine was entitled to serve the proceedings outside the jurisdiction without the Court’s permission.
This goes to show how wording seemingly as harmless as “the order overleaf” can cause significant headaches for a party trying to rely on its terms and conditions in bringing a claim against an allegedly infringing counterparty. Seraphine have been successful in serving proceedings outside the jurisdiction and defending the challenge by Mamarella but not without significant delay to the proceedings (which were issued June 2023), disruption and, likely, early expense.
What is also significant, and perhaps more damaging to Seraphine on its infringement claim, is that Seraphine also sought to amend its Particulars of Claim to rely on nine additional designs (to bring the total to 18) and to make allegations of infringement in respect of those designs. Infringement of those designs is dependent on earlier terms allegedly in force between the parties – from 2015 and 2019. It was said by Seraphine that orders placed by Mamarella before April 2021 were subject to one of those sets of terms because those orders were placed through Seraphine’s TradeWeb platform, and that orders placed through that platform were subject to those terms.
However, Seraphine could not adduce any convincing evidence that the Trade Web platform did in fact incorporate the 2015 or 2019 terms. Mr Tappin KC held therefore that Seraphine could not satisfy the test under CPR 6.33(2B)(b) in respect of the part of its claim that depends on the 2015 and 2019 terms. The effect being that Seraphine has not been given permission to introduce a claim based on the 2015 or 2019 terms, or the nine extra designs.
The practical takeaways from this judgment are reminders to retailers to:
- ensure definitions and clauses in terms and conditions reflect the practical reality of the way you are doing business with each trade partner. Special care needs to be taken in drafting and also reviewing the terms to ensure they are still relevant and applicable as time goes on; and
- ensure it is clear that those terms and conditions and incorporated between the parties and apply to all orders.
This case provides an example of the difficulties lack of clarity and evidence can cause when unfortunately, the business relationship breaks down and you want to be able to enforce those terms, in the most advantageous and geographically convenient way for you.
