Cordoba Shipping Company Ltd v National State Bank, Elizabeth, New Jersey (Albaforth)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ACKNER,LORD JUSTICE ROBERT GOFF |
| Judgment Date | 29 March 1984 |
| Judgment citation (vLex) | [1984] EWCA Civ J0329-1 |
| Docket Number | 84/0133 |
| Court | Court of Appeal (Civil Division) |
| Date | 29 March 1984 |
[1984] EWCA Civ J0329-1
Lord Justice Ackner
Lord Justice Robert Goff
84/0133
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM ORDER OF MR JUSTICE STAUGHTON
Royal Courts of Justice
MR B.A. RIX Q.C. and MR H.W.B. PAGE, instructed by Messrs Ince & Co., appeared for the Appellants (Plaintiffs)
MR LESLIE JOSEPH Q.C. and MR G.A. RABIE, instructed by Messrs Marriott Harrison & Co., appeared for the Respondents (Defendants).
On 22nd October 1982 Mr Justice Staughton discharged an ex parte order made by Mr Justice Parker (as he then was) giving the appellants (the owners) leave to serve out of the jurisdiction a writ claiming damages against the respondents, a New Jersey bank (the bank) for "negligent misstatement…contained in a telex dated 5th September 1979 sent by the Defendants to the Plaintiffs, in reliance upon which the Plaintiffs contracted with a third party and have suffered loss." He further set aside the purported service of the writ.
The facts are simple enough. The owners are a Liberian company, and the MV "Albaforth" belongs to them. The owners have agents in London, River Plate Shipping and Trading Agency Limited ("River Plate"). River Plate has a broking subsidiary based at the same London address, Bulk Chartering Brokers Limited ("Bulk").
On or about 5th September 1979 the vessel was chartered to Maro Shipping Limited ("Maro"), a Liberian company. The fixture was negotiated and concluded by telephone and telex between the two firms of brokers in London, viz Bulk acting for the owners and Thornton Chartering Limited ("Thornton") for Maro. Maro's obligations under the charterparty were guaranteed by International Trader Inc., a Connecticut company ("I.T.I."). I.T.I. and Maro were in common ownership and/or control by one Herman. Before concluding the fixture, the owners' brokers required to be provided with a banker's status report on the guarantor, I.T.I.
On 5th September 1979 the bank sent a telex to Bulk in London in these terms: "Confirming our telephone conversations of today re International Traders Inc. Stamford Conn. excellent account of our bank Our experience has always been favourable Have opened letters of credit for them in low seven figures stop Have made advance in low six figures stop Has chartered many vessels and there has been no delay in freight payments".
This, as the learned judge observed, was a reference in glowing terms. The owners said that, in reliance upon it, they accepted I.T.I. as guarantors.
The charterparty was not a success, a large part of the hire not being paid. Cheques were provided by I.T.I. drawn on Hartford Bank, Connecticut, but they were later dishonoured, and, when the vessel was redelivered at the end of 1979, there was over $300,000 overdue, including unpaid bunkers. The owners brought proceedings, both against Maro and I.T.I. in Connecticut for the purpose of a pre-judgment attachment (a remedy somewhat similar to our Mareva injunction) at Hartford Bank. At about the same time they brought similar proceedings against Maro and I.T.I. for attachment of any assets they had in the defendant bank. The owners were obliged by the terms of the charterparty, which was on the New York Produce Exchange form, to obtain their substantive remedy through arbitration proceedings in New York against Maro, and they obtained an award on 5th October 1980 in the sum of $349,939.62 plus interest, and the Arbitrator's fees and expenses. This award was not honoured. The owners then took proceedings for the enforcement of the award and the guarantee in the United States District Court for the Southern District of New York against Maro and I.T.I. Judgment was entered for them in the sum of $0403,863.43 plus interest. All they apparently achieved was a little under $10,000 paid by I.T.I. They therefore began these proceedings against the bank.
Before Mr Justice Staughton it was contended, inter alia, that the owners could not show a good arguable case that the reference given in the telex was untrue and given negligently. Mr Justice Staughton found on this point in favour of the owners, and, although in the respondents' notice his decision was attacked, Mr Joseph conceded the point before this appeal was called on. The matters which Mr Justice Staughton and we were called upon to decide are as follows.
(1) Was the alleged tort committed within the jurisdiction?
While anxious to keep the point open, Mr Joseph accepted that we were bound by the decision of this court in Diamond v. Bank of London and Montreal Ltd. (1979) 1 Q.B., 333, where it was held that the tort of negligent misrepresentation is committed where the representation is received and acted upon. There is no question as to where the reference was received. The telex was addressed to River Plate Shipping, London, England, for the attention of Mr Newman, who is a director of Bulk and who duly received the telex. Before Mr Justice Staughton there was an issue as to who on behalf of the owners took the decision to rely on the bank's telex and conclude the charterparty. The learned judge commented upon the apparent reticence of the owners in their affidavits to deal with this issue, but, having referred in some detail to the affidavit of the owners' solicitors, concluded that Mr Konialidis, a director of River Plate, was the directing mind of the owners for the purpose of the conclusion of the charterparty. He had delegated to a Mr Rendall, a director of River Plate, authority to instruct the broker to conclude the charter-party fixture on the owners' behalf if he considered that the credit reference given for I.T.I. was satisfactory. It was Mr Rendall in London who was the person who relied on the bank's telex. He accordingly held that the alleged tort was committed within the jurisdiction. On the material before him the judge was fully entitled to reach these conclusions.
Mr Joseph on behalf of the owners, who did not appear before Mr Justice Staughton, has in the respondents' notice taken a somewhat different point. He contends that there is no, or no satisfactory, evidence that any reliance was placed in England upon the bank's reference, because the owners failed to make out a good arguable case that they received the telex containing the reference before agreeing the fixture. Their contention is as follows. On 5th September Bulk sent a telex to Thornton Chartering, Maro's brokers in London, the opening words of which read as follows: "Pleased to confirm hve fxd with subs as follows:- Albaforth/Maro to be guaranteed by International Traders Inc. of Stamford, Ct Sub ows approval of chrs to be lifted by 11.00 N.Y. 5 Sept." There was no timing on this telex. The only clue is that 1100 hours New York time equals 1600 hours British time in September.
In our bundle there is what appears to be a working draft of this telex, understandably enough because I have only quoted a very small part, there being a great deal of detail which follows the quotation which I have made. In the course of this appeal Mr Joseph asked to see the original of this draft and discovered to his and everybody else's surprise that it contained on its back, in manuscript, the following statement: "Dly (delivery) dropping tugs at mouth of Calumet River $8,500.00 semi-monthly Delete subjects". In the top right-hand corner of this document, in manuscript, there was written "5–30 pm".
The bank's telex of 5th September containing the reference was timed 1255 hours New York time, i.e. 5.55 pm British time. Mr Joseph's point was that, if subjects were deleted at 5.30, then there was a firm fixture at this time, that is, prior to the receipt of the bank's reference. The deletion of subjects, it is accepted, means that the corporation featuring as charterers is approved. It is apparent, however, that only two of the comments on the back of the draft were incorporated into the draft and into the telex sent by Bulk to Thorntons on 5th September, namely, delivery on dropping the tugs, etc. (the original provision had been delivery on sailing Chicago, and $8,500 payable semi-monthly); it had originally read $8,600 payable monthly. There was, however, no deletion of "sub ows approval of chrs". Accordingly, there can be no substance in Mr Joseph's submission that, had Mr Justice Staughton's attention been drawn to the writing on the back of the draft, he would have concluded that the owners could not have made out a good arguable case that their brokers in London had relied upon the reference before concluding a fixture.
(2) Is this a proper case, as a matter of discretion, for service out of the jurisdiction?
The owners having established that the court had jurisdiction to give leave to serve the writ out of the jurisdiction because the action was founded on a tort committed within the jurisdiction (Order 11(1)(i)(h)), the owners still had to satisfy the court that it was a proper case for the exercise of the court's discretion. This they failed to do and hence this appeal.
Mr Justice Staughton was satisfied (and this was not contested by Mr Joseph) that an English court would only apply English law to this case. In English law, since Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. (1964) A.C., 465, a negligent misrepresentation by a bank as to creditworthiness is actionable. As regards New Jersey law, Mr Justice Staughton concluded that it had not been proved to him that the law was different from English law, but "that the point is open to argument in New Jersey". Mr Rix has provided us with material, additional to that which was...
To continue reading
Request your trial
-
JIO Minerals FZC and others v Mineral Enterprises Ltd
...(see the English Court of Appeal decisions of Cordoba Shipping Co Ltd v National State Bank, Elizabeth, New Jersey (The “Albaforth”) [1984] 2 Lloyd’s Rep 91 at 92 (“The Albaforth”) and Diamond v Bank of London and Montreal [1979] QB 333 at 345–346). A different approach, however, was taken ......
-
Evergreen International SA v Volkswagen Group Singapore Pte Ltd and Others
...adopted by our Court of Appeal in Eng Liat Kiang v Eng Bak Hern [1995] 3 SLR 97 at 103. The English Court of Appeal in The Albaforth [1984] 2 Lloyd’s Rep. 91 held that the place where the tort was committed is prima facie the natural forum for the determination of the 28 Counsel for the Pla......
-
Rickshaw Investments Ltd and Another v Nicolai Baron von Uexkull
...below, the appellants relied on the case of Cordoba Shipping Co Ltd v National State Bank, Elizabeth, New Jersey (The Albaforth) [1984] 2 Lloyd’s Rep 91 (“Albaforth”), which states that the place where a tort occurred is prima facie the natural forum for determining the claim. According to ......
- American Express Bank Ltd; Mohamad Toufik Al-Ozeir and Another
-
FORUM CONVENIENS
...Co. and Endo Laboratories Inc. v. I.C. Agnew and Others (No. 2)[1988] 2 Lloyd’s Rep. 240 at 244 et sequentes. 18. See “The Albaforth”[1984] 2 Lloyd’s Rep. 91. 19. See inter aliaRe Harrods (Buenos Aires) Ltd. (No. 2)[1991] 4 All E.R. 348, Credit Chimique v. James Scott Engineering Group Ltd.......
-
Choice of Law in Tort—Blending in with the Landscape of the Conflict of Laws?
...1997) 226–227.35 n 13 above.36 Since it was said in Cordoba Shipping Co vNational State Bank, Elizabeth, New Jersey: TheAlbaforth [1984] 2 Lloyd’s Rep 91, 94 that ‘the jurisdiction in which a tort has been committed isprima facie the natural forum for the determination of the dispute’ and t......
-
JURISDICTION ISSUES IN INTERNATIONAL TORT LITIGATION: A SINGAPORE VIEW
...note 10. 15 Seaconsar Far East Ltd, supra, note 10. Subject to choice of law considerations, see infra, Part VI. 16 The Albaforth [1984] 2 Lloyd’s Rep 91; The Spiliada[1987] AC 460; JH Raynor (Mincing Lane) Ltd v Teck Hock & Co (Pte) Ltd[1990] 2 MLJ 142. This article only deals with the iss......