Caresse Navigation Ltd v Zurich Assurances MAROC; The Channel Ranger

JurisdictionEngland & Wales
JudgeLord Justice Beatson,Sir Robin Jacob,The Master of the Rolls
Judgment Date21 October 2014
Neutral Citation[2014] EWCA Civ 1366
Docket NumberCase No: A3/2013/3068
CourtCourt of Appeal (Civil Division)
Date21 October 2014

[2014] EWCA Civ 1366

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE, QUEEN'S BENCH DIVISION

COMMERCIAL COURT

The Hon. Mr Justice Males

[2013] EWHC 3471 (Comm)

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

THE MASTER OF THE ROLLS

Lord Justice Beatson

and

Sir Robin Jacob

Case No: A3/2013/3068

Between:
Caresse Navigation Ltd
Claimant/Respondent
and
(1) Zurich Assurances MAROC
(2) WAFA Assurance
(3) AXA Assurance MAROC
(4) Atlanta
"M/V Channel Ranger"
Defendants/Appellants

Tom Whitehead (instructed by Hill Dickinson LLP) for the Appellants

Henry Byam-Cook (instructed by Holman Fenwick & Willan LLP) for the Respondent

Hearing date: 8 October 2014

Lord Justice Beatson

Introduction

1

This is an appeal against an interim anti-suit injunction made by Males J on 14 October 2013: see [2013] EWHC 3471 (Comm). The dispute concerns a claim under a bill of lading on the "Congenbill 1994" form of just over US$1 million for damage to a cargo of coal shipped on the vessel Channel Ranger from Rotterdam to Nador in Morocco in April 2011. Males J granted the injunction because he had previously decided 1 that the bill of lading incorporated an English law and exclusive jurisdiction clause referred to in the charterparty.

2

The shipowner, and respondent to the appeal is Caresse Navigation Ltd ("Caresse"), a Marshall Islands company. The consignee and receiver of the cargo is the Office National de L'Electricite ("l'ONE"), a Moroccan state electricity generating company, and the appellants are its insurers and parties to whom rights of suit under the bill of lading appear to have passed under Moroccan law. I shall refer to the appellants as "the cargo interests". The injunction restrained the cargo interests from pursuing proceedings which they had commenced under the bill of lading in the Commercial Court in Casablanca, Morocco against the Master of the Vessel in his capacity as a representative of Caresse, the shipowner. At the conclusion of the hearing, my Lord the Master of the Rolls stated that the appeal would be dismissed. I now give my reasons for that decision. My reasons are substantially the same as those given by the judge in his admirably clear judgment.

The terms of the bill of lading and the charterparty

3

The bill of lading evidenced or contained a contract of carriage between Glencore International AG ("Glencore"), the shipper, and Caresse. Clause (1) of its printed conditions of carriage provides:

"All terms, and conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration clause are herewith incorporated"

The fundamental question is whether, in the circumstances of this case, these words have the effect of incorporating an English law and exclusive jurisdiction clause referred to in the charterparty.

4

A box on the front page of the form of the bill of lading in this case (dated 6 April 2011) contains a typed clause using materially the same words as clause (1) of the printed conditions to express the scope of the incorporation. It stated:

"Freight payable as per Charter Party. All terms, conditions, liberties and exemptions including the law and arbitration clause, are herewith incorporated".

Another box on the front page of the bill of lading identified the charterparty as "dated 06.01.2011". Clause (2) of the printed terms is a General Paramount clause,

providing for (in this case) the Hague-Visby Rules to apply to the bill of lading contract.
5

The charterparty in question was a voyage charter in the form of an email fixture recap dated 6 January 2011 which set out the main terms 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 charterparty was on the Americanised Welsh Coal Charter ("AmWelsh") form 1979, clause 5 of which 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 factual and procedural background

6

Caresse chartered the " Channel Ranger" to U-Sea Bulk A/S by a contract on an amended NYPE form dated 23 March 2011 in order for U-Sea Bulk A/S to perform a shipment which it had agreed to perform under a voyage charter with Glencore dated 6 January 2011. That voyage charter was made by an email fixture recap containing the clause referring to the Glencore/Eitzen charterparty set out in [5] above.

7

The shipment of the cargo of 39,001.503mt of "coal in bulk" was acknowledged by the bill of lading which described the cargo as "Charbon vapeur" and stated that it was "shipped in apparent good order and condition". As the cargo was consigned to the order of l'ONE, the bill was negotiable and took effect as a contract between the shipowner and Glencore. Page 1 of the "Congenbill 1994" form states "to be used with charterparties". I have referred (see [3] and [4] above) to clause (1) of the printed conditions of carriage and to the box stating that "freight is payable as per CHARTER-PARTY, dated 06.01.2011".

8

On arrival at Nador, it was discovered that the temperature of the cargo had increased. Due to the risk of flammable gas evolution, it was decided to douse a hotspot in the hold with water to preserve the safety of the vessel, the rest of the cargo, and those on board. After the cargo was discharged, l'ONE complained that it had been damaged by the self-heating and dousing and intimated its claim against Caresse under the bill of lading. As a result of that, on 8 June 2011, Caresse instituted these proceedings seeking a declaration of non-liability against l'ONE and the other cargo interests. Hamblen J granted Caresse permission to serve out of the jurisdiction. Service on the insurers in Morocco was only effected on 25 February 2013. Service on l'ONE was effected on 6 May 2013.

9

On 28 March 2013, l'ONE and the other cargo interests commenced the proceedings in Morocco to which I have referred. On 22 May 2013, l'ONE and the other cargo interests challenged the jurisdiction of the English court in these proceedings. It was the Moroccan proceedings which, in turn, led to Caresse applying on 13 August 2013 for an interim anti-suit injunction to restrain pursuit of the Moroccan proceedings on the ground that those proceedings were in breach of the exclusive jurisdiction clause in clause 5 of the Glencore/Eitzen charterparty incorporated into the bill of lading via the charterparty in the fixture recap dated 6 January 2011.

10

The cargo interests' challenge to English jurisdiction was rejected by Males J: see [2013] EWHC 3081 (Comm), reported at [2014] 1 Lloyd's Rep 337. He held that Caresse had a good arguable case that the bill of lading was governed by English law, and thus satisfied the jurisdictional gateway in CPR PD 6B para. 3.1(6)(c). He also held that the bill of lading incorporated an English law and exclusive jurisdiction clause referred to in the charterparty, thus going further than what would have been required to satisfy the jurisdictional gateway in CPR PD 6B para. 3.1(6)(d). It was on the basis of the latter decision that, after handing down his decision, he granted the anti-suit injunction. The cargo interests appeal, with his permission, against his decision to grant that injunction.

11

The judge did not give the cargo interests permission to appeal against his rejection of their challenge to English jurisdiction, and they did not renew that application after Aikens LJ refused permission on the papers. They have pursued their appeal against the injunction and continue to assert that the English Court does not have jurisdiction over them. Mr Byam-Cook's skeleton argument on behalf of Caresse contends that this amounts to seeking to have matters both ways and that is an abuse of process. That question was not, however, canvassed before us at the hearing.

The judge's decision

12

The judge decided that the voyage charter in the fixture recap incorporated clause 5 of the Glencore/Eitzen charterparty. He concluded that the effect of the bill of lading, and in particular printed clause (1) set out at [3] above and the typed clause set out at [4] above, was to incorporate the English proper law and exclusive English jurisdiction clause in clause 5 of the Glencore/Eitzen charterparty into the bill of lading. His reasoning was as follows:

(1) There is a particular need for clarity and certainty in the rules governing the incorporation of charterparty clauses into bills of lading because of the negotiable nature of bills of lading and the fact that they may come into the hands of parties who are not aware of the terms of the charterparty: see [38] and [42], citing Federal Bulk Carriers Inc v C Itoh and Co Ltd (The Federal Bulker) [1989] 1 Lloyd's Rep 103 and Siboti K/S v BP France SA (The Siboti) [2003] EWHC 1278 (Comm), reported at [2003] 2 Lloyd's Rep 364 at [24].

(2) General words of incorporation in a bill of lading (however wide) will not be effective to incorporate an arbitration or jurisdiction clause because such clauses are "ancillary" to the main contract to which they relate: see [38], citing The Siboti.

(3) A specific reference to an arbitration or jurisdiction clause in a bill of lading will be effective. In such a case, it does not matter that the wording of the clause in the charterparty may require some degree of manipulation to make it applicable to the bill of lading: see [38], citing The Delos [2001] 1 Lloyd's Rep 703.

(4) The...

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