Caltex Trading Pte Ltd v Metro Trading International Inc. [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Rix J. |
| Judgment Date | 17 September 1999 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 17 September 1999 |
Queen's Bench Division (Commercial Court).
Rix J.
Alistair Schaff QC and Richard Southern (instructed by Clyde & Co) for Glencore.
Steven Gee QC and David Goldstone (instructed by Holmes Hardingham) for the second and third fourth parties.
The following cases were referred to in the judgment:
Astro Exito Navegacion SA v Hsu (“The Messiniaki Tolmi”)UNK [1984] 1 Ll Rep 266
Attenborough v London & St Katharine's Dock CoELR (1878) 3 CPD 450
Elefanten Schuh GmbH v Pierre Jacqmain (Case 150/80) [1981] ECR 1671
Esal (Commodities) Ltd v PujaraUNK [1989] 2 Ll Rep 479 (CA)
Eschger Ghesquirer & Co v Morrison Kekewich & Co (1890) 6 TLR 145
Fry v MooreELR (1889) 23 QBD 395
Gerhard v Montagu & Co (1889) 61 LT 564
Kinnear v Falconfilms NVWLR [1996] 1 WLR 920
Kongress Agentur Hagen GmbH v Zeehage BV (Case C-365/88) [1990] ECR 1845
Kurz v Stella Musical Veranstaltungs GmbHELR [1992] Ch 196
Mercantile Group (Europe) AG v AiyelaELR [1994] QB 366
Rein v Stein (1892) 66 LT 469
TSB Private Bank International SA v ChabraWLR [1992] 1 WLR 231
Waterford Wedgwood plc v David Nagli Ltd [1998] CLC 1011
Submission to jurisdiction — Service out of jurisdiction — Conflict of laws — Whether discovery application by fourth party defendants constituted submission to jurisdiction — Whether fourth party claims disclosed a cause of action — Whether leave to serve out of jurisdiction properly granted — Whether injunctive relief properly granted — Rules of the Supreme Court, 0. 11, r. 1(1)(c), 0. 16, r. 1(1)(c) — Civil Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention) art. 6(2), 18.
There were applications by fourth parties challenging the jurisdiction of the English court.
The first defendant, “Metro”, provided storage facilities for oil products in vessels stationed off Fujairah and also acted as an oil trader. In 1998 it was discovered that large quantities of oil supposedly stored by Metro were missing and Metro collapsed. Litigation ensued in which oil companies and traders, including the plaintiff “Caltex”, claimed such oil as remained in storage or could be traced. Caltex sued Metro and the owners of the vessels carrying disputed cargoes. Proceedings were issued in England on the basis of jurisdiction clauses in contracts with Metro and the English court appointed receivers to get in and sell the oil cargoes and to obtain discovery of all relevant documentation. The third defendant shipowner, “Taurus”, owner of the vessel Nafkratis, issued a third party notice in the nature of interpleader proceedings against the oil companies which claimed an interest in the Nafkratis cargo. The fifth defendant, “Stanley”, owned a vessel (“The Cherry”) carrying a disputed cargo of oil, but refused to deliver it up to the receivers. A liquidator of Metro had been appointed by the bankruptcy court in Greece and the liquidator sold the Cherry cargo to a Liberian company, “Baker”, controlled by “P” in Greece. The third party oil claimants then obtained an order ex parte giving leave to issue and serve a fourth party notice on P and Baker out of the jurisdiction alleging wrongful interference with the Cherry cargo and seeking its delivery up and injuncting P and Baker from taking delivery or possession of the cargo or interfering with its delivery up to the receivers. Service out of the jurisdiction without leave was based in the case of P on art. 6(2) of the Brussels Convention and in the case of Baker on 0. 11, r. 1(1)(c) as a necessary and proper party. Baker and P challenged the jurisdiction of the English court arguing that the fourth party claims were not within 0. 16 and that the fourth party notice disclosed no cause of action and should be set aside as a matter of discretion. Before they issued their summons under 0. 12, r. 8 challenging the jurisdiction the applicants had applied for inspection of documents produced by the other parties to the receivers and had obtained an order for discovery on condition that they complied with various orders made against them. The third parties argued that that constituted a submission to the jurisdiction of the English court.
Held, dismissing the applicants' challenge to the jurisdiction:
1.The applicants had applied for discovery of all the documents relevant to the substantive issue of title to the oil so that they could advance a case that there was no cause of action against them and defeat the proceedings on the merits. The applicants by issuing their summons in the circumstances in which they did invoked the jurisdiction of the English court as parties to the litigation without any reservation as to any challenge to the jurisdiction. Considering the test in art. 18 of the Brussels Convention and at common law the applicants had submitted to the jurisdiction. ( Astro Exito Navegacion SA v Hsu (“The Messiniaki Tolmi”) [1984] 1 Ll Rep 266, Esal (Commodities) Ltd v PujaraUNK[1989] 2 Ll Rep 479 (CA) and Kurz v Stella Musical Veranstaltungs GmbHELR[1992] Ch 196considered.)
2.The tortious claims against P and Baker in the fourth party notice for wrongful interference with the Cherry cargo were not within 0. 16, r. 1(1) and could not stand, because Taurus made no such claims in its third party notice, which related to the cargo carried on the Nafkratis. However the question of title to the Cherry cargo was something “relating to or connected with” the subject-matter of the third party notice, which was not only the Nafkratis cargo but also the issues of title concerning it, within 0. 16, r. 1(1)(c). Accordingly, the claim for delivery up of the oil, since it related to the common issue of the title to the Metro oil, and any ancillary claim (such as a claim for injunctions), was a proper claim to be included in the fourth party notice. The court's jurisdiction under 0. 16 was not affected by the applicants' arguments that Caltex never had a good claim to the Taurus cargo and that the third party claim would not be pursued by Taurus since it had delivered up the cargo to the receivers. The issues of title raised by the third and fourth party notices remained to be determined. Similarly it was only arguable that by reason of the applicability of Greek law the fourth party notices were bound to fail and there remained a serious issue to be tried.
3.If there was jurisdiction under 0. 16 to give leave to issue the fourth party notice or any part of it, the circumstances were strongly in favour of exercising the discretion to grant leave. The issue of title to the Cherry cargo should be dealt with in the overall Metro litigation and it was legitimate to raise issues of title in the third and fourth party proceedings rather than by way of interpleader relief under 0. 17.
4.But for the submission to the jurisdiction the tortious claims in the fourth party notice would not be within art. 6(2) of the Brussels Convention or 0. 11 because art. 6(2) required there to be a proper connection between claim and third party claim applying the test in 0. 16. However to the extent that the court would permit the fourth party claims as within 0. 16 there was jurisdiction over P under art. 6(2) and Baker would be a necessary or proper party under 0. 11, r. 1(1)(c).
5.The ex parte injunctions were properly made and should be maintained even though there was no cause of action against P and Baker in tort because the court otherwise had jurisdiction over them and because Glencore had a good cause of action asserting title to and delivery up of the Cherry cargo and the court was entitled to grant injunctions ancillary to that cause of action. ( TSB Private Bank International SA v ChabraWLR [1992] 1 WLR 231 and Mercantile Group (Europe) AG v AiyelaELR[1994] QB 366applied.)
Rix J: I am concerned with an application made on behalf of Mr George Procopiou and Baker Services Inc (“Baker”) to contest the jurisdiction of this court. Mr Procopiou is domiciled in Greece, and submits that by reason of art. 2 of the Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters (as enacted into English law by the Civil Jurisdiction and Judgments Act 1982) he must be sued in Greece; Baker is a Liberian company, and submits that jurisdiction has been wrongly asserted over it as a “necessary or proper party”. Moreover, since the action against these defendants takes the form of a fourth party claim, additional points arise as to whether the relief claimed against them falls properly within either the jurisdiction or the discretion granted by RSC, 0. 16. It is also said that there is no cause of action against them. On the other hand, the parties who stand in relation to them as claimants, namely the third parties Glencore International AG, Mobil Export Corp and Texaco International Trading Inc (respectively “Glencore”, “Mobil” and “Texaco”), submit that Mr Procopiou and Baker have in any event submitted to the jurisdiction.
This application arises in the context of proceedings of the utmost complexity and has given rise to four days of detailed, intricate and cogent submissions put before me by Mr Steven Gee QC on behalf of the fourth parties and Mr Alistair Schaff QC on behalf of Glencore (for these purposes also representing Mobil and Texaco). Were it not for the fact that Mr Procopiou is within another week or so facing a most serious application to commit him for contempt of court, I would have preferred to reserve this judgment for an exposition which would do proper justice to the submissions which have been put before me. As it is, the court appointed receivers who have brought the motion to commit against Mr Procopiou have indicated to him that they will not proceed with their application if this court finds that it has no jurisdiction over him. In the circumstances it is necessary for me to give judgment without delay, and having given the matter careful...
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