FR Lurssen Werft GmbH and Company KG v Halle
| Jurisdiction | England & Wales |
| Judge | Lord Justice Aikens,Sir Paul Kennedy,Lord Justice Thorpe |
| Judgment Date | 23 April 2010 |
| Neutral Citation | [2010] EWCA Civ 587 |
| Date | 23 April 2010 |
| Docket Number | Case No: A3 / 2009 / 2492 |
| Court | Court of Appeal (Civil Division) |
[2010] EWCA Civ 587
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(Mr Justice Simon)
Before: Lord Justice Thorpe
Lord Justice Aikens
and
Sir Paul Kennedy
Case No: A3 / 2009 / 2492
Mr Andrew Thomas (instructed by Wilmer Cutler Pickering Hale and Dorr LLP) appeared on behalf of the Appellant.
Mr David Lewis (instructed by Holman Fenwick & Willan) appeared on behalf of the Respondent
Lord Justice Aikens:
This is an appeal from an order of Simon J dated 29 October 2009. By that order he refused the application of Mr Warren Halle, the appellant and the defendant in the action, who had sought two orders. The orders Mr Halle had sought were: 1) that the court declare that it did not have jurisdiction over the claim to which he was the defendant; and 2) that it set aside the order of Blair J dated 27 February 2009 giving the respondent to this appeal, the claimant in the action, permission to serve the claim form in the case on the appellant out of the jurisdiction. I will refer to the appellant as Mr Halle and the respondent as Lurssen Werft.
The claim arises out of a Commission Agreement between Mr Halle, who resides in Florida in the United States of America, and Lurssen Werft, which is a German company. I will describe the facts in a little more detail later.
The appeal concerns one issue only. The judge decided, in summary, that at this interlocutory stage he was satisfied that Lurssen Werft had “much the better of the argument” that the Commission Agreement between the parties was impliedly governed by English law. The issue on this appeal is whether that decision was correct. Mr Andrew Thomas, who appears for Mr Halle, says that it was not; Mr David Lewis for Lurssen Werft says that it was. Alternatively, Mr Lewis says in his written submissions to the court that it cannot be demonstrated that the conclusion of the judge was so obviously wrong that this court would be entitled to interfere with it.
There is no appeal on the other two aspects of Simon J's judgment, viz. that he was satisfied that there was a serious issue to be tried in this case and that England was the forum conveniens. The effect of the judge's decisions on these issues and the order he made is that it confirmed that Lurssen Werft had permission to serve the proceedings on Mr Halle and that the English court does have jurisdiction.
The facts of the case are set out in the judgment of the judge at paragraphs 4 to 13. That summary of the facts is not in dispute. They are to be treated as follows, with the exception of the last sentence of paragraph 11 of the judge's judgment:
“4. The Claimant is a German shipbuilding company. The Defendant is an American citizen and a resident of the State of Florida.
5. On 15 April 2005 the parties entered into a Vessel Construction Contract (‘VCC’) for the construction of a 20m Motor Yacht (the ‘Nemo’) for an adjustable price of Euros 48m. On the same date they entered into a similar contract for a vessel (the ‘Shark’).
6. It is convenient to focus on the terms of the ‘Nemo’ contract, in which the Defendant was referred to as the ‘Purchaser’ and the Claimant as ‘the Builder’.
By Clause 1.9 the ‘Completion Date’ was to be 31 May 2007 and by Clause 1.30 the ‘Owner’ was to have the same meaning as the ‘Purchaser’. In each VCC there were specified staged payments to be made over the course of construction. Clause 3.2 provided for 50% of the price to be paid at the date the keel was laid (no earlier than 1 January 2006), and a further 20% on the date the hull and superstructure were welded together (no earlier than 1 June 2006). The Delivery of the ‘Nemo’ was to take place on 31 May 2007, and the ‘Shark’ on 31 March 2008. Clause 8.4 provided that for the purposes of securing payments made and as security for any claims, title was to pass at the date of keel-laying.
7. Of particular relevance in the context of the present application are Clauses 20 and 21.
Clause 20 is comprehensive Arbitration Clause, which provides (subject to various qualifications) that disputes arising out of or in connection with the VCC should be settled under the Rules of Arbitration of the London Maritime Arbitrators Association (the ‘LMAA’). Clause 21 was headed ‘Law’
‘This Contract shall be construed in accordance with and shall be governed by English Law, however and always provided that, the stipulations of this Contract shall prevail. With regard to title within Germany, the Pre Delivery Mortgage and the registration with the German shipbuilding register, German Law will be applicable insofar as this law is mandatory (lex rei sitae)'
8. On 8 May 2008 the parties entered into the Commission Agreement dated 8 May 2006. The Commission Agreement provided, amongst other matters, that if the vessel were purchased by a client introduced by the Claimant then a commission of 5% of the sale price would be payable by the Defendant to the Claimant.
9. The Commission Agreement's entire terms were expressed as follows
‘It has been agreed between [the Claimant] and [the Defendant] that, in the event that the yacht ‘Nemo’ or ‘Shark’ is purchased by a client introduced to the yacht and the Owner, by [the Claimant] or one of its representatives, a commission of 5% of the sales price will be payable to [the Claimant] by [the Defendant] no later than 15 days from the sale becoming effective.’
Nothing was said about how any dispute was to be resolved, or what system of law governed the agreement.
10. On 28 July 2006 the Defendant granted to the Claimant, for the week beginning on 28 July, the exclusive right to sell the ‘Nemo’ at a price of €71.5m.
11. In the event a deal was struck whereby the ‘Nemo’ was sold to a third-party buyer; and there were negotiations between the Claimant and the Defendant, among other matters, about who should pay for certain legal fees.”
On 27 February 2009 Lurssen Werft issued a claim form claiming from Mr Halle €3.65 million as commission, said to arise under the Commission Agreement dated 8 May 200Lurssen Werft alleges: (1) that Lurssen Werft sold the MB ‘Nemo’ to Mr Halle under a Vessel Construction Contract dated 15 April 2005; (2) the parties entered into the Commission Agreement of 8 May 2006; and (3) that this provided that if ‘Nemo’ was purchased by a client introduced by Lurssen Werft then a commission of 5 per cent of the sale price would be payable by Mr Halle to Lurssen Werft.
Permission to serve the claim form out of the jurisdiction was granted on the basis of CPR Part 6.36 and CPR Practice Direction 6B, paragraph 3.1(6)(c). Those are set out conveniently in the outline argument of Mr Thomas at paragraphs 11 and 12. They provide:
“ 11. CPR 6.36 provides: ‘In any proceedings to which rule 6. 32 or 6.33 does not apply, the claimant may serve a claim form out of the jurisdiction with the permission of the court if any of the grounds set out in paragraph 3.1 of Practice Direction B supplementing this Part apply.’
12. CPR PD6B 3.1(6)(c) provides that: ‘The claimant may serve a claim form out of the jurisdiction with the permission of the court under rule 6.36 where … (6) A claim is made in respect of a contract where the contract … (c) is governed by English law.’”
The Commission Agreement does not contain any express provision as to its applicable law. In the application for permission to serve out of the jurisdiction, Lurssen Werft...
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