Caresse Navigation Ltd v Office National De L'Electricite and Others "Channel Ranger"
| Jurisdiction | England & Wales |
| Judge | Mr Justice Males |
| Judgment Date | 14 October 2013 |
| Neutral Citation | [2013] EWHC 3081 (Comm) |
| Docket Number | Case No: 2011 Folio 668 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 14 October 2013 |
[2013] EWHC 3081 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Males
Case No: 2011 Folio 668
Mr Henry Byam-Cook (instructed by Holman Fenwick Willan LLP) for the Claimant
Mr Tom Whitehead (instructed by Hill Dickinson LLP) for the Defendants
Hearing dates: 4th October 2013
Approved Judgment
Introduction
The main issue raised by this application concerns the effect of the incorporation into a bill of lading of the "Law and Arbitration clause" of an identified charterparty when the dispute resolution clause in that charterparty provides, not for English law and arbitration, but for English law and court jurisdiction. Two main questions arise: (i) should the clause be read as providing for the jurisdiction of this court and (ii) is there in any event an effective choice of English law as the law applicable to the bill of lading?
These questions arise on a challenge by the defendants to the jurisdiction of this court pursuant to CPR 11, permission to serve the first defendant (the receiver of the cargo) out of the jurisdiction in Morocco having been given by Hamblen J, the jurisdictional gateways relied on by the claimant shipowners being that the bill of lading contract (i) is governed by English law and (ii) contains a term to the effect that the court shall have jurisdiction. Subsequent orders made by Blair J and HHJ Mackie QC joined the second to sixth defendants (the insurers of the cargo) to the action and extended the time for service.
There was also listed before me an application by the claimant owners for an anti-suit injunction to restrain the further pursuit of proceedings commenced by the defendant insurers in Morocco, but the claimant agreed at the hearing that this should be deferred until after I had determined whether the English court has jurisdiction and, if so, on what basis. The defendants made clear that, at this stage, they intend to play no part in responding to that application, lest it be said that by doing so they have submitted to the jurisdiction of this court.
The parties
The claimant, a Marshall Islands company, was and still is the owner of the vessel "CHANNEL RANGER" and was the contractual carrier of the cargo on the subject voyage under the relevant bill of lading. The first defendant, a Moroccan state electricity generating company, was the receiver of the cargo. The second to sixth defendants were the insurers of the cargo. Under Moroccan law, whatever rights of suit under the bill of lading have passed to the receiver can be exercised by the cargo insurers, so that they can now bring a claim under the bill of lading in respect of cargo damage in their own name. It transpires that the third defendant is in fact the same company as the second defendant. Accordingly, the claimant accepts that the third defendant need no longer be named as a defendant to the proceedings.
Background
By a contract on an amended NYPE form dated 23 March 2011 the claimant chartered the vessel to U-Sea Bulk A/S for one time charter trip with a cargo of "coal in bulk". It appears that U-Sea concluded this charter in order to perform one of three shipments which it had agreed to perform under a voyage charter contract with Glencore International AG dated 6 January 2011 ("the voyage charter").
The voyage charter between U-Sea and Glencore was in the form of an e-mail fixture recap (as is not uncommon, it seems that no formal charterparty was ever drawn up), which set out the main terms agreed and concluded:
"otherwise as per proforma C/P Glencore/Eitzen latest C/P dated 14 January 2009 (see attached) logically amended as per main terms agreed."
The Glencore/Eitzen charter dated 14 January 2009 was an attachment to this e-mail. It was on the Americanised Welsh Coal Charter ("Amwelsh") form 1979. Clause 5 of this printed form provided:
"This Charter Party shall be governed by English law, and any dispute arising out of or in connection with this Charter shall be submitted to the exclusive jurisdiction of the High Court of Justice of England and Wales."
The vessel arrived at Rotterdam on 1 April 2011 and loaded 39,001.503 mt of cargo between 4 and 6 April 2011. Shipment of the cargo on board the vessel was acknowledged by a bill of lading dated 6 April 2011, signed on behalf of the master by the local agents and stating that the cargo was "shipped in apparent good order and condition". The bill named Glencore as the shipper and was consigned to the order of the first defendant. It was therefore a negotiable bill, which took effect as a contract between the claimant shipowners and Glencore. The port of discharge was Nador in Morocco.
The bill of lading was on the well-known "Congenbill 1994" form which states on its face that it is "to be used with charter-parties". The form includes a box on the front in which the printed words "Freight payable as per CHARTER-PARTY dated …" appear, while on the reverse clause 1 of the conditions of carriage provides that:
"All terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration Clause, are herewith incorporated."
Clause 2 of the printed terms, a General Paramount clause, provides for the Hague or Hague-Visby Rules (in this case, the latter) to apply to the bill of lading contract.
In the present case, the box on the front of the form referring to payment of freight was completed by the insertion of the date of the voyage charter, 6 January 2011. Further, the central box on the front of the form also included the typed clause:
"Freight payable as per Charter Party. All terms, conditions, liberties and exemptions including the law and arbitration clause, are herewith incorporated."
The vessel sailed from Rotterdam on 6 April 2011. It is the owners' case, and so far at any rate has not been disputed by the defendants, that at no time prior to loading or during loading itself did Glencore, the shipper, or its appointed agent provide any information to the master regarding the characteristics of the cargo and the recommended safe handling procedures for its loading and transportation. In particular, no warning was given to the master that the cargo to be carried was liable to self-heat.
The vessel arrived at Nador on 11 April 2011 after a voyage of only five days and berthed on 12 April 2011, at which time the temperature of the cargo was noted to have increased. According to the owners, the following days were characterised by delays in the commencement and progress of discharge, the effect of which was that the self-heating of the cargo in three of the vessel's five holds worsened, with a small hot spot being found in hold 2 on the evening of 15 April 2011. This had increased in size by the following day.
By this stage, the owners had instructed a surveyor, Dr Daniel Sheard of Brookes Bell, to attend on board the vessel to monitor the situation and provide expert assistance to the master. U-Sea had also instructed its own expert, Mr Graham Charlton, from Burgoynes. Due to the elevated temperatures in hold 2 and the risk of flammable gas evolution, the master, Dr Sheard, Mr Charlton and a representative from the harbour master considered that the hotspot in hold 2 should be doused with water as an emergency measure to preserve the safety of the vessel, the rest of the cargo and those on board.
There is a dispute as to what this dousing consisted of. The owners say that there was dousing of the hot spot in hold 2, initially with fresh water but then, because there was not a sufficient supply of fresh water, with salt water for a period of no more than about seven minutes; and that on the following day there was further dousing, this time with fresh water only. The receivers, however, say that the use of salt water was more extensive and that, even though fresh water was available, there was dousing by salt water in holds 2, 4 and 5 which caused contamination of the cargo and rendered it unusable for their purposes, namely use in industrial boilers for the production of electricity.
Discharge operations were interrupted on 18 April 2011, when the vessel was arrested by the receivers. That arrest was lifted on 20 April 2011 in exchange for a P & I Club letter of undertaking. Cargo operations resumed on 21 April 2011 and discharge was completed on 23 April 2011. The vessel sailed from the port on 24 April 2011.
The P & I Club letter of undertaking was substituted by a bank guarantee dated 29 April 2011 from Banque Marocaine du Commerce Exterieur given on behalf of the club in favour of the first and second defendants. It states that it was issued to secure payment of any sums payable by the owners in respect of "the alleged damage to the cargo of coal discharged from the said vessel on arrival at Nador on 11.04.2011, caused by combustion and fire-extinguishing water" and is for a maximum sum of 9,500,000 Moroccan Dirhams (equivalent to about US$1,181,000).
The defendants rely on a survey report from TEXA, local surveyors who attended on board the vessel during certain periods of the discharge operation, but who may not have been present on board when the crew doused the cargo at the discharge port. There is an issue about this. Nonetheless, the surveyor...
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