Baccus SRL v Servicio Nacional del Trigo
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE JENKINS,LORD JUSTICE PARKER |
| Judgment Date | 31 October 1956 |
| Judgment citation (vLex) | [1956] EWCA Civ J1031-1 |
| Court | Court of Appeal |
[1956] EWCA Civ J1031-1
Lord Justice Singleton
Lord Justice Jenkins and
Lord Justice Parker
In The Supreme Court of Judicature
Court of Appeal
The Hon. T.G. ROCHE, Q.C. and Mr. A.J. BATESON (instructed by Messrs, Bell Brodrick & Gray) appeared on behalf of the Appellant plaintiffs.
Mr. MICHAEL KERR (instructed by Messrs, vernor Miles & clark) appeared on behalf of the Respondent Defendants.
LOHD JUSTICE SINGLETON: On the 16th September, 1952, there were two contracts entered between the plaintiffs and the Defendants, The plaintiffs, Baccus S.R.L., are a company carrying on business in Italy. The service Nacional del Trigo carry on business in Spain, The contracts were c.i.f. contracts in respect of the sale of 26,000 tons of rye by the Defendants to the plaintiffs. There was a term of each of the contracts which is perhaps not very happily translated In the copy which we have, The translation is: "The sale is made in accordance with the terms of the Geneva international contract for sale of cereals No. 5 being a copy of the international contract bearing the same number. For any divergence which may arise in the fulfillment or construction of the contract Contrary to, the aforesaid terms, both parties submit to the jurisdiction of the technical courts at London."
Until the court asked for sight of the original documents, no one seems to have noticed on the head of the fore the words "Ministerial do Agriculture". At least, one attached importance to the words. There was no reference to them in the affidavits or in argument.
Only about 8,000 tons out of the 26,000 tons embraced by the two contracts was shipped, and disputes arose between the parties. The plaintiffs claimed damages for breach of contract.
On the 7th July 1954 there was an application on behalf of the plaintiffs to serve the writ outside the Jurisdiction under the provisions of order 11, rule 1; and in support of that application, Mr, Bresch, the solicitor for the plaintiffs, swore an affidavit in which he referred to the contracts and to the clause which I have Just read, which purports to give Jurisdiction to "the technical courts at London". Towards the end of paragraph 5 of his affidavit, Mr Bresch says: "This would appear however to be Immaterial because by the second sentence of the said clause the parties expressly submitted to the jurisdiction of the 'technical courts at London'. This expression isagain not quite accurate because there arc no such 'technical courts at London', but It is fairly clear that the clause contains a submission to such court at London as actually exists and this can only be the High court of justice, more particularly the commercial judge thereof. In any case the said clause discloses the intention that the contracts should be governed by English law."
Leave to serve out of the jurisdiction was given, and on the 9th September, 1954, the writ was served. The writ claims damages for breach of contract. The endorsement follows with; "The plaintiffs are a limited company formed under the laws of the Republic of Italy and registered there. They reside outside the scheduled Territories as defined by the Exchange control Act 1947, at the address stated below." This Is an address in Rome.
On the 20th October, 1954, an apperance was entered for "Service Marginal del Drigo (a corporate Body according to the lows of Spain) the Defendant in this action". The appearance was entered by Messrs. vernor Miles and clark, who are solicitors for the Defendants in these proceeding. More than a year later, on the 19th November of 1955, the statement of Claim was delivered. on tin 19th January, 1956, the Defendants issued a summons for security for costs. There had been a good deal of correspondence, and the summons, which was returnable on the 30th January, 1956, asked for security for costs on the ground that the registered office of the plaintiffs is situate outside the jurisdiction of this court.
I notice that in one letter, of the 1st December, 1955, it was pointed out that the costs would be heavy because of the heavy expenses of translation of the documents and the voluminous correspondence in Italian and Spanish. on the 30th January 1956 an order was made by consent for security for the Defendants' costs in the sum of £150, and that amount was lodged as security for the Defendants' costs. Thereafter, onthe 18th April, 1956, a summons was issued on behalf of the Defendants praying "for an Order that all further proceedings in this action be stayed and that the Writ and Statement of Claim herein be set aside on the ground that the said Defendants are a Department of the State of Spain any. that the State of Spain, through it. Ambassador at the Court of St. James, claims sovereign immunity in respect of the institution and or continuance of this action; and for such other order as this Honourable Court shall think fit." That is the subject matter of two argument which has occupied this Court for a little time.
The Master made an Order as prayed and his Order was upheld by Mr. Justice Pearce. The Plaintiffs appeal against the Order which set aside the writ and the Statement of Claim.
Thus we are faced with a question which may be said to be two-fold. The first question which arises in: Are the Defendants entitled to sovereign immunity? An the second is. If so, have they waived the right to claim that they are entitled to sovereign immunity by submit ting to the jurisdiction of this Court?
Before I deal with the principles involved, I think it is right that I should refer so the affidavits which give us all the information we have as to the creation and position of the Defendant Company; and if I refer to them ow fairly fully, it is in order to avoid returning to them from time to time in the course of my judgment.
The first affidavit is that of Mr. Rafael Valls, a member of the Spanish Bar, Permanent Delegate of the General Council of the Bar of Spain, and also a member of the I riddle Temple, His affidavit is sworn on behalf of the Defendants, Paragraph 2: "The 'Service Nacional del Trigo' (National Whea Service) is a Department of the State of Spain being a Department of the Spanish Ministry of Agriculture. It was brought into being as a Department of the State by Decree Law on the 23rd August 1937. Articles 1 and 2 of the said Decree Law read respectivelythus:
"'Article 1 The production and distribution of wheat and principal similar products are governed by the rules set out in this Decree Law and supplementary enactments, and the acquisition, distribution and prices thereof are regulated hereby.
"'Article 2. In order to carry into effect the above objects, and for purposes of stud and submission of proposals for their fulfilment, there is created hereby an to be styled 'Servicie Nacional del Trigo' as a department of the Commission of Agriculture and Agricultural Labour, of the Technical Junta of the State or Department which eventually takes its place.' The Technical of the State was the Provisional Spanish Factionalist Government.
"3. By Law of 30th January 1938 the Central Administration or Government of the State was organised tina eleven Ministries were created of which the Ministry of Agriculture was one.
"4. By Decree of the 6th April 1938 the Ministry of Agriculture was organised. Article 1 of the Decree reads thus: Article 1. The Ministry of Apiculture cofcpriies an Underscore-tariat and the National Services of: Agriculture" - and tree other heads. "Article 2 enacts that the Undersecretariat '.…. shall exercise the functions which appertain to it and those which are conferred upon it by Delegation… The following shall be a direct department of the Undersecretariat…. Servicie Nacional del Trigo.'
"5. By Order of the Minister of Agriculture dated the 30th May 1938 the Undersecretariat itself was organised. Article 1 provides thus: 'Article 1 The Services which my Decree are dependent upon the Undersecretariat of the Department are… organised in the Ordinary sections as hereinafter set out… 4. Service Nacional del Trigo.
"6. Finally the Service Nacional del Trigo was reorganised by Order of the Ministry of Agriculture of the 19th November 1953. The following Articles confirm that the Service
the correspondence which passed between the Plaintiffs' and the Defendants' Solicitors in this action as well as the Summons for security for costs issued by the Defendants' Solicitors on the 19th day of January 1956 and the Order by Master Lawrence made on the 30th day of January 1956." The documents are exhibited, "I am informed by my Government and verily believe that the said entry of appearance and all subsequent events concerning the said Department in this action (as referred to in exhibit M.P.R.S.H.1) have taken place without the knowledge or authority of the Minister of Agriculture (who was then responsible for the said Department and is still responsible for it at this date) and without the knowledge or authority of the Cabinet or of the Head of the Spanish State. The said Minister (apart from the Head of the State and the Cabinet) Is the only person with authority to decide whether or not the Ministry of Agriculture or any Department thereof shell waive Its claim to overegg immunity by submitting to the Counts of any other State. In the precise I am informed and verily believe that if the steps taken by or on behalf of the said Defendants constitute a prima facie submission to the Jurisdictions this Honourable Court or a waiver of the sovereign immunity from the process of this Honourable Court attaching to the said Defendants, then such submission and waiver have taken place without any authority by or on behalf of the State of Spain.
"3. It is contrary to the dignity sovereign immunity and...
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