Caspian Basin Specialised Emergency Salvage Administration and Another v Bouygues Offshore SA and Others ; Ultisol Transport Contractors Ltd v Bouygues Offshore SA and Others

JurisdictionEngland & Wales
CourtQueen's Bench Division (Admiralty)
JudgeRix J
Judgment Date30 Apr 1997

Queen's Bench Division (Admiralty Court)

Rix J.

Caspian Basin Specialised Emergency Salvage Administration & Anor
and
Bouygues Offshore SA & Ors

Nicholas Hamblen QC (instructed by Edwin Coe) for Caspian.

Angus Glennie QC and Clair Ambrose (instructed by Thomas Cooper & Stibbard) for Ultisol.

David Steel QC and Simon Gault (instructed by Clyde & Co) for BOS.

The following cases were referred to in the judgment:

Abidin Daver, TheELR [1984] AC 398.

Amalia, TheENR (1863) 1 Moo PC (NS) 471; 15 ER 778.

Amin Rasheed Shipping Corp v Kuwait Insurance CoELR [1984] AC 50.

Blue Nile Shipping Co Ltd v Iguana Shipping & Finance Inc [1997] CLC 567.

Bouygues Offshore SA v Caspian Shipping Co [1997] CLC 1,443.

Caltex Singapore Pte Ltd v BP Shipping LtdUNK [1996] 1 Ll Rep 286.

Canadian Pacific Railway Co v Steamship StorstadELR [1920] AC 397.

De Dampierre v de DampierreELR [1988] AC 92.

Falstria, TheUNK [1988] 1 Ll Rep 495.

Fothergill v Monarch Airlines LtdELR [1981] AC 251.

Goldman v Thai Airways International LtdWLR [1983] 1 WLR 1186.

Gosse Millerd Ltd v Canadian Government Merchant Marine LtdELR [1929] AC 223.

Hill v AudusENR (1855) 1 K & J 263; 69 ER 456.

James v London and South Western Railway CoELR (1872) LR 7 Ex 287.

Kapitan Shvetsov, The (unreported, 21 February 1997, Hong Kong CA).

Miller v PowellSC (1875) 2 R 976.

Nisshin Risen Kaisha Ltd v Canadian National Railway CoUNK (1981) 122 DLR (3d) 599.

Normandy, The (1871) 23 LT 631.

River Loddon, TheUNK [1955] 1 Ll Rep 503.

Sisters, TheASPM (1876) 2 Asp 589.

Spiliada Maritime Corp v Cansulex Ltd (“The Spilada”)ELR [1987] AC 460.

Top Maru, TheUNK [1971] 1 Ll Rep 341.

Ultisol Transport Contractors Ltd v Bouygues Offshore SAUNK [1996] 2 Ll Rep 140.

Volvox Hollandia, TheUNK [1988] 2 Ll Rep 361.

Shipping — Admiralty limitation action — Stay of proceedings — Forum non conveniens — Misrepresentation — Barge under tow lost off Cape Town — Barge owner took proceedings in South Africa and in England against owners and charterers of tug in negligence and misrepresentation — Charterers obtained injunction against barge owners enforcing English jurisdiction clause in towage contract — Tug owners and charterers started limitation proceedings in England — Barge owner applied for stay of limitation proceedings — Whether limitation actions should be stayedpending action on liability — Whether limitation available before liability established — Whether limitation available in misrepresentation claim — Whether English limitation proceedings should be stayed on basis that South Africa the appropriate forum — Merchant Shipping Acts 1979 and 1995 — Convention on Limitation of Liability for Maritime Claims 1976, art. I\. 7, 2.1.

These were summonses in two Admiralty limitation actions for declarations as to rights of limitation.

A French corporation, “BOS”, engaged the services of the tug, Tigr, for the towage of BOS's barge from the Congo to Cape Town. The time charterers of Tigr were “Ultisol” and the owners were “Caspian”. The barge grounded off Cape Town while in the course of towage and was lost.

BOS (and its insurers) took proceedings in South Africa against both Caspian and Ultisol alleging misrepresentation and negligence and claiming damages for loss of the barge, etc. Caspian asked the court to decline jurisdiction on the ground that there was an exclusive English jurisdiction clause in the towage contract between BOS and Ultisol and a Himalaya clause which entitled Caspian to rely on the exclusive jurisdiction clause. BOS commenced an English Admiralty action in personam against Caspian and Ultisol, making substantially the same allegations as in South Africa, to preserve time in case Caspian succeeded in its attack on South African jurisdiction.

Ultisol obtained an injunction from Clarke J enforcing the English exclusive jurisdiction clause in the towage contract and restraining BOS's South African action against Ultisol. However, Morison J rejected Caspian's application for a similar injunction holding that Caspian was not entitled to rely on the English jurisdiction clause, and that the natural forum for the dispute between BOS and Caspian was South Africa and not England.

BOS also commenced proceedings in South Africa against the Cape Town port authority, “Portnet”, in negligence. Portnet served a defence denying negligence, obtained the attachment of the Tigr and the bunkers on board, and joined Caspian and Ultisol as third parties. Caspian and Ultisol then joined Portnet as third party in the English proceedings under O.11, r.1(1)(c) (see [1997] CLC 1,443).

Ultisol commenced a limitation action in the English Admiralty Court in which, without admitting liability, it claimed to be entitled to limit its liability “if any” under English law, and paid £537,717.58 into court as the limitation fund. The defendants were BOS and “all other persons claiming or being entitled to claim damages by reason of the loss of the barge. Caspian then started its own limitation proceedings against BOS “and all other persons claiming” etc., seeking to limit its liability “if any” to the fund constituted by Ultisol.

Caspian served a defence and counterclaim in BOS's English action claiming to be entitled to limit its liability and to avail itself of the limitation fund established by Ultisol. BOS issued a summons to stay its English action against Caspian, alternatively Caspian's counterclaim, pending the determination of Caspian's plea to the jurisdiction in South Africa, on the ground that the appropriate forum was South Africa and/or that it was vexatious for Caspian to claim limitation relief in two separate actions.

BOS sought to stay the limitation actions until either liability was established or conceded in the case of Ultisol, or jurisdiction in South Africa was finally determined in the case of Caspian. BOS wished to have limitation determined in South Africa under the 1957 international convention relating to the limitation of liability of owners of sea-going ships; Ultisol and Caspian wished to have limitation determined in England under the 1976 convention on limitation of liability for maritime claims, enacted in English law by the Merchant Shipping Acts 1979 and 1995 (which significantly raised the limit of liability over that in the 1957 convention but made it much harder for a claimant to break the limit).

The questions for the court were (1) whether a declaration of limitation could be obtained without liability first being established; (2) whether there was any right to limit in respect of BOS's claims in misrepresentation; (3) whether Ultisol's limitation action should be stayed until Ultisol's liability was resolved in BOS's English action; and (4) whether Caspian's limitation action should be stayed until its liability was resolved in BOS's English action or until jurisdiction was resolved in BOS's South African action.

Held, declaring that Ultisol and Caspian were entitled to limit their liability, if any, arising out of the loss of the barge in accordance with the quantum of the limitation fund which had been set up:

1. There was no authority which survived with unbroken force to require an admission or determination of liability as a condition precedent to the commencement of a limitation action or the granting of a decree in that action. The jurisdictional disputes which once arose because of the division of function between the courts of Chancery and of Admiralty were no longer relevant. There was authority for requiring an admission of liability as a condition precedent to the staying of liability actions: if liability was still to be determined, a decree of limitation could not be made the occasion of staying the issue of liability. A limitation action without admission of liability might be a waste of time should there ultimately be no liability. But there was nothing in theory or logic which demanded that a right to limit was only possessed by one who owed a liability. The fact that one might not be able to resolve limitation before liability in a particular case did not require a rule of law or even of practice that liability must precede limitation in all cases. If the matter was ultimately one of discretion, rather than jurisdiction, there might well be circumstances where it would make good sense for parties to know what the limit of liability was even in advance of the determination of liability. (Hill v AudusENR(1855) 1 K & J 263; 69 ER 456, The AmaliaENR(1863) 1 Moo PC (NS) 471; 15 ER 778, The Normandy(1871) 23 LT 631, James v London and South Western Railway CoELR(1872) LR 7 Ex 287, andThe SistersASPM(1876) 2 Asp 589 considered.)

2. Article 1.7 of the 1976 convention which provided that the act. of invoking limitation was not to constitute an admission of liability was a pointer that there was nothing wrong in principle with the court dealing with and pronouncing on limitation when liability was still in issue. Likewise the test for breaking limitation under the 1976 convention was extremely difficult to meet and there could only in exceptional cases be a realistic issue as to the right to limit.

3. There was nothing in the RSC relating to limitation actions which was incompatible with a decree or declaration limiting liability prior to an admission of liability. Accordingly a decree or declaration limiting liability could be granted prior to an admission of liability.

4. BOS's claim in misrepresentation was to be measured by the financial loss suffered as a result of entering into the Towcon charter. That was a claim to financial compensation “in respect of loss of or damage to property” under art. 2.1 of the 1976 convention. The claim “occurred in direct connection with the operation of the tug: if there was fault and therefore liability at all, the barge was lost because, as was alleged, the tug lacked the pulling power and brake horsepower needed in the prevailing weather conditions.

5....

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