Blue Nile Shipping Company Ltd v Iguana Shipping & Finance Inc. (The Happy Fellow)
| Jurisdiction | England & Wales |
| Judge | THE PRESIDENT,LORD JUSTICE SAVILLE,LORD JUSTICE SCHIEMANN |
| Judgment Date | 25 July 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J0725-7 |
| Docket Number | QBCOF 96/1188/D |
| Court | Court of Appeal (Civil Division) |
| Date | 25 July 1997 |
[1997] EWCA Civ J0725-7
The President
(Sir Stephen Brown)
Lord Justice Saville
Lord Justice Schiemann
QBCOF 96/1188/D
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION (ADMIRALTY COURT)
(MR JUSTICE LONGMORE)
MR STEPHEN TOMLINSON QC and MISS REBECCA SABBEN-CLARE (instructed by Messrs Bentley Stokes & Lowless, London E1 9YL) appeared on behalf of the Appellants (Plaintiffs).
MR PETER CROSS QC and MR MICHAEL NOLAN (instructed by Messrs Holman Fenwick & Willan, London EC3N 3AL) appeared on behalf of the Respondents (Defendants).
I have had the advantage of reading in draft the judgment prepared by Saville L.J. I agree with it and have nothing that I wish to add.
On 20 th November 1995 the vessels "Darfur" and "Happy Fellow" were in collision on the River Seine, while the former vessel was en route for Rouen and the latter was proceeding to sea. On 21 st November the owners of the "Happy Fellow" obtained an order from the Commercial Court at Rouen for court surveyors to investigate the cause of the collision and on the following day this investigation began.
On 28 th November 1995 the owners and bareboat charterers of the "HappyFellow" arrested the "Darfur" at Le Havre.
On 22 nd December seven claimants, including the owners and members of the Unigas pool which was operating the "Happy Fellow", issued an "assignation" (the French equivalent of a writ) in the Commercial Court at Le Havre against the owners of the "Darfur" claiming damages arising out of the collision. This they were entitled to do not only because the collision had occurred in France but also because the vessel had been arrested there.
The "Darfur" had been time-chartered by her owners to Seerederei Baco-Liner GmbH. The charterparty contained a German arbitration clause, but early in 1996 this was changed by agreement to an exclusive English law and jurisdiction clause. It was the timecharterers and not the owners of the "Darfur" that suggested this change.
On 13 th March 1996 the time-charterers issued a writ in the London Admiralty Court against the owners of the "Darfur" claiming damages for breach of the charterparty and other relief in respect of the collision. The owners of the "Darfur" accepted service of this writ and a few days later instituted limitation proceedings in the same Court, naming the owners and bareboat charterers of the "Happy Fellow", the time-charterers of the "Darfur" and "all other persons claiming or being entitled to claim damages by reason of the collision between the ship DARFUR and the ship HAPPY FELLOW which occurred on the River Seine on 20th November 1995." The owners of the "Darfur" then purported to constitute a limitation fund in England in the sum of £1.79 million. The owners were entitled to launch these limitation proceedings in England because of the action brought against them there by the timecharterers.
During this period the "Darfur" had remained under arrest at Le Havre but was eventually released on 2 nd May 1996 against a letter of undertaking from the P & I Club concerned. On the following day Sloman Neptun, one of the members of the Unigas pool and a claimant in the collision proceedings in the Le Havre Commercial Court, acknowledged issue of the writ in the limitation proceedings and applied to set aside or stay those proceedings under Article 21 or Article 22 of the amended Brussels Convention, which is part of our law by virtue of the Civil Jurisdiction and Judgments Act 1982. It should be noted that the reason why only Sloman Neptun (as opposed to all the claimants in the French proceedings) made this application was over concerns that taking this step might constitute a submission to the "merits" as opposed to the "jurisdiction" jurisdiction of the English Court, since the rules of court relating to limitation do not contain the safeguards built into the general rules. By selecting only one claimant the risk was confined to that claimant.
Articles 21 and 22 provide as follows:-
Article 21
"Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Contracting States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.
Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.
Article 22
Where related actions are brought in the courts of different Contracting States, any court other than the court first seised may, while the actions are pending at first instance, stay its proceedings.
A court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the law of that court permits the consolidation of related actions and the court first seised has jurisdiction over both actions.
For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."
These Articles appear in Section 8 of the Convention. This Section is intended, in the interests of the proper administration of justice within the Community, to prevent parallel proceedings before the Courts of different Contracting States and to avoid conflicts between decisions which might result therefrom: see Gubisch Maschinenfabrik v Palumbo [1987] ECR 4861.
In a judgment dated 3 rd December 1996 Longmore J decided that although the matter fell outside the provisions of Article 21, the French collision proceedings and the English limitation proceedings were "related actions" within the meaning of Article 22, and stayed the latter so far as Sloman Neptun were concerned. From this judgment the owners of the "Darfur" appeal to this Court.
It would normally be appropriate to consider Article 21 before Article 22, since apart from anything else the application of the former (if the jurisdiction of the court first seized is established) requires the court other than the court first seized to decline jurisdiction, rather than to exercise a discretion. However, the Appellants, having succeeded before the Judge on Article 21, were intent only on attacking the decision on Article 22, while the Respondents, though challenging the decision on Article 21, were principally concerned with seeking to uphold the decision on Article 22 and were, in effect, content that the limitation action should merely be stayed. Thus, at least so far as the parties are concerned, if the judge was right in staying the English limitation action as against Sloman Neptun, the question whether this should be under Article 21 or Article 22 is academic. Accordingly in this case it is appropriate to consider first whether the case falls within Article 22.
On behalf of the owners of the "Darfur" Mr Tomlinson QC criticized the two reasons the judge gave for regarding the collision action in France and the limitation action in England as being "related actions." These reasons were firstly, that there was an obvious overlap of factual issues and secondly, that the French court would take the view that it was seized of the question whether the owners of the "Darfur" were entitled to limit their liability.
So far as the first of these reasons is concerned, it seems not to be seriously in issue that the immediate cause of the collision was the failure of the steering gear of the "Darfur." Mr Tomlinson submitted that the establishment of this fact alone would provide sufficient "faute" on the part of the "Darfur" to enable the claimants in the French...
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