i-law

Lloyd's Maritime and Commercial Law Quarterly

ENGLISH SALE OF GOODS LAW

Djakhongir Saidov*

115. Fern Computer Consultancy Ltd v Intergraph Cadworx & Analysis Solutions Inc 1

Application to serve out of jurisdiction—Commercial Agents (Council Directive) Regulations 1993—whether software is “goods”—whether transaction involving software is a “sale”

This was an application by the defendant (“Intergraph”) to set aside an order giving permission to the claimant (“Fern”) to serve out of the jurisdiction, made on 29 October 2013. The main claim was based on the Commercial Agents (Council Directive) Regulations 1993 (“the Regulations”) but there was a lesser claim for unpaid commission. Permission to serve out of the jurisdiction (in Texas) was sought on the basis that the contract was governed by English law and/or that the contract was breached within the jurisdiction. The defendant was the owner and/or licensee of certain software products. Since 1993, the claimant has acted as the defendant’s agent and there was a dispute in this case as to whether the claimant was “selling” anything as opposed to procuring a licence. The only agreement which has been produced as regulating that arrangement is an agreement dated 21 December 2007, and all the debate centred around the effect of that document. Under it, the claimant was appointed to be a “partner” to solicit orders for the software throughout Europe. Any successful orders resulted in a licence which operated directly between the defendant and the purchaser/customer. The claimant was entitled to commission, and it was to collect the fees paid by end users, deduct its commission and pass the balance to the defendant. The agreement contained a Texas law and Texas jurisdiction clause. The application gave rise to a variety of points as to whether or not the claimant could pass through a service-out gateway and, if it could, as to the merits of the claim.
Decision: The claimant has not established that a claim under the Regulations can be brought within any of the proposed gateways.
Held: (1) The claimant has not established that a claim under the Regulations can be brought within any of the proposed gateways.2 (2) Although the point about the merits of the case—that is, whether there is a real prospect of success—does not arise, it is appropriate to make a ruling on it; there may be other gateways available, and if one or more of them is available then the merits of the claim would become relevant. (3) So far as the merits are concerned, the claimant must establish that there is a real prospect of success on the merits in the sense of a prospect which is better than merely fanciful—a serious question to be tried. (4) Under the Regulations, a commercial agent is appointed

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