Blue Nile Shipping Company Ltd v Iguana Shipping & Finance Inc. (The Happy Fellow)
| Jurisdiction | England & Wales |
| Judge | Longmore J. |
| Judgment Date | 03 December 1996 |
| Court | Queen's Bench Division |
| Date | 03 December 1996 |
Queen's Bench Division (Admiralty Court)
Longmore J.
Peter Gross QC and Michael Nolan (instructed by Holman Fenwick & Willan) for the defendants.
Stephen Tomlinson QC and Rebecca Sabben-Clare (instructed by Bentley Stokes Lowless) for the plaintiffs.
The following cases were referred to in the judgment:
Afromar Inc v Greek Atlantic Cod Fishing Co (“The Penelope II”)UNK [1980] 2 Ll Rep 17.
Black Diamond, The (1949) 336 US 386.
Caltex Singapore Pte Ltd v BP Shipping LtdUNK [1996] 1 Ll Rep 286.
Dresser UK Ltd v Falcongate Freight Management LtdELR [1992] QB 502.
Gubisch Maschinenfabrik KG v PalumboECAS (Case 144/86) [1987] ECR 4861; [1989] 1 CEG 504.
Heidberg, The (23 September 1993, Commercial Court at Bordeaux).
Johanna Hendrika, The (8 September 1994, Court of Appeal of Rouen).
Kirsten Skou, The (France).
MacShannon v Rockware Glass LtdELR [1978] AC 795.
Navipesa Dos, The (France).
Sarrio SA v Kuwait Investment Authority [1997] CLC 280.
Spiliada Maritime Corp v Cansulex LtdELR [1987] AC 460.
Steelton, TheUNK [1977] 1 Ll Rep 310.
Volvox Hollandia, TheUNK [1988] 2 Ll Rep 361.
Admiralty limitation action — Stay of proceedings — Collision near mouth of Seine between Darfur and Happy Fellow — Collision allegedly caused by Darfur's defective steering gear — Happy Fellow interests started proceedings in France — Owners of Darfur sued in England by time-charterers instituted limitation action in England — Whether English proceedings should be stayed — Whether proceedings involved same cause of action — Whether proceedings were related — Whether proceedings should not be stayed because of French courts” interpretation of limitation convention — Civil Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention), Art. 21, 22.
This summons concerned the application of the lis pendens articles of the Brussels Convention in the field of Admiralty Limitation actions.
On 20 November 1995, there was a collision near the mouth of the Seine between the vessels Darfur and Happy Fellow. The collision occurred allegedly as a result of defective steering gear on board Darfur. The master of Happy Fellow applied to the Commercial Court at Rouen and under the court's order surveyors inspected the steering gear and examined the masters of both vessels and some of the officers and crew, as well as the pilots of the vessels. Later the Darfur was arrested at Le Havre by the Happy Fellow interests, and the court surveyors took further evidence. In December 1995 a writ was issued in the Commercial Court of Le Havre on behalf of seven French claimants, including the owners and three members of the Unigas pool who were the operators of the vessel, claiming damages against the owners of the Darfur.
At the time of the collision the Darfur had been under time-charter to a company called Baco-Liner. Disputes under the charterparty were to be determined in the English High Court of Justice. Baco-Liner issued a writ in personam in England against the owners of Darfur and the owners instituted a limitation action in England and purported to constitute a limitation fund in England in the sum of £1,719,000.
The Commercial Court at Le Havre ordered the release of the Darfur from arrest on 2 May 1996 on an undertaking from the owners” P & I club. A member of the Unigas pool which operated the Happy Fellow, “Sloman Neptun”, then applied by summons to the Admiralty Court in London for a. stay of further proceedings in the English limitation action.
Sloman Neptun contended that the English proceedings involved the same cause of action as the French proceedings and that, since the French court was the court first seised, the English proceedings should be set aside or stayed pursuant to art. 21 of the Brussels Convention; alternatively the proceedings were related and should be set aside or stayed pursuant to art. 22.
The plaintiffs further argued that the English proceedings should not be stayed because there was a substantial risk that they would not obtain justice in France on the limitation issue because of the French courts” interpretation of art. 4 the international Convention on Limitation of Liability for Maritime Claims 1976 (the 1976 limitation convention).
Held, staying the English proceedings so far as they affected Sloman Neptun:
1. Questions of primary liability were not in issue in both proceedings. The English limitation action assumed that there was a liability, even though that liability was not, and might never be, admitted; all questions of primary liability would be determined in the French proceedings. That, however, did not determine the question whether the proceedings involved the same cause of action. The question was whether, if there was a collision claim, the right to limit was an incident of that claim so that it could be said that proceedings in respect of the collision and proceedings asserting a right to limit in respect of that collision involved the same cause of action or, to use the words of the French text, the same “objet et cause”.
2. A shipowner's right to limit (at any rate in a multi-party case) did not attach to or qualify the substantive right of the claimant but, rather, limited the extent to which that right could be enforced against a particular fund. (The Steelton [1977] 1 Ll Rep 310 and Caltex v BP Shipping LtdUNK [1996] 1 Ll Rep 286 followed.)
3. It followed that the French proceedings did not “involve” the same cause of action as the English proceedings. The English proceedings were at once narrower and wider than the French proceedings; narrower, because the right to limit was merely procedural and did not affect the substantive rights of the French claimants, and wider, because the English proceedings purported to invoke a right which was good against all possible claimants (viz. the world) whereas the French proceedings sought only to invoke rights between the parties to those proceedings. The proceedings did not, therefore, have the same “object or cause”, did not involve the same cause of action and art. 21 of the convention had, therefore, no application.
4. It did not necessarily follow that any action in which it was alleged that a shipowner was liable was inevitably related to any action in which a shipowner was seeking to limit his liability. If, for example, it was clear that the court trying the liability action did not consider itself seised of the issue of limitation and the main issue in the liability action was, for example, whether a duty of care was owed by the defendant to the plaintiff, it might well be that the actions would not be related actions for the purpose of art. 22.
5. On the facts, the English action and the French action were related for two main reasons. First, no admission of liability had been made by the owners of Darfur and the cause of the failure of the steering gear would be a “primary fact” in both jurisdictions and there would be an inevitable risk of irreconcilable judgments if both actions proceeded. Secondly, the French court would take the view not only that it was seised of limitation issues in respect of the Happy Fellow claimants but also that it was so seised before the institution and service of the English limitation action. It was therefore the case that the actions were so closely connected that it was expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.
6. The court rejected the plaintiffs” submission that the proceedings should not be stayed on the ground that the French courts did not adhere to the provisions of the 1976 convention. Even if it was right to say that the French courts did not, to English eyes, give sufficient weight to the subjective requirement that the shipowner should personally have had knowledge that the loss would be likely to result, that was no more than a difference of approach to the true construction of the convention.
Longmore J: This summons concerns the application of the “lis pendens” articles of the Brussels Convention in the somewhat specialised field of Admiralty limitation actions. It is an unfortunate aspect of the application that the plaintiffs, who have begun a limitation action in England.” submit that the courts of France do not give effect to the International Convention on Limitation of Liability for Maritime Claims 1976 (hereafter the 1976 limitation convention) although France is a party to that convention. It is for this reason that the plaintiffs do not wish to have the question of the limitation of their liability tried by the French courts.
On 20 November 1995, there was a collision near the mouth of the Seine between the vessels Darfur and Happy Fellow. This collision occurred allegedly as a result of defective steering gear on board Darfur The master of Happy Fellow applied immediately to the Commercial Court at Rouen for an order that a Court Surveyor be appointed to go on board the Darfur, obtain relevant documents, interview all persons knowing anything about the collision and investigate the causes and origin of the collision in order to provide evidence for such court as might afterwards be competent to deal with the matter. The court made an-order and on 22 November surveyors went on board Darfur and inspected the steering gear. They also examined the masters of both vessels and some of the officers and crew, as well as, two days later, the pilots of the vessels in the presence of the parties and their lawyers.
On 28 November 1995, the Darfur was arrested at Le Havre by what I may call the Happy Fellow interests, and in the following days the court surveyors took evidence from other members of the crew as well as officers of the port. On 22 December 1995 a writ was issued in the Commercial Court of Le Havre on behalf of seven French claimants...
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