Glencore International AG v Metro Trading International Inc. [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Moore-Bick J. |
| Judgment Date | 30 July 1999 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 30 July 1999 |
Queen's Bench Division (Commercial Court).
Moore-Bick J.
Andrew Smith QC (instructed by Wilde Sapte) for Banque Trad-Credit Lyonnais (France) SA.
Michael Beloff QC and Geraldine Andrews (instructed by Herbert Smith) for Singapore Petroleum Co.
Dominic Kendrick QC and David Allen (instructed by Thomas Cooper & Stibbard) for Itochu Petroleum Co (S) Pte Ltd.
Richard Southern (instructed Clyde & Co) for Glencore International AG.
Simon Mortimore QC and James Turner (instructed by Norton Rose) for Metro Trading International Inc.
The following cases were referred to in the judgment:
Airbus Industrie GIE v Patel [1998] CLC 702; [1999] 1 AC 119.
Canada Trust Co v Stolzenberg (No. 2) [1998] CLC 23; [1998] 1 WLR 547.
Continental Bank NA v Aeakos Compania Naviera SAWLR [1994] 1 WLR 588.
Dresser UK Ltd v Falcongate Freight Management LtdELR [1992] QB 502.
Firswood Ltd v Petra Bank (unreported, 13 December 1995, CA).
Fox v TaherUNK [1997] ILPr 441.
Gerling Konzern Speziale Kreditversicherungs-AG v Amministrazione del Tesoro dello StatoECAS (Case 201/82) [1983] ECR 2503.
Grupo Torras SA v Al-SabahUNK [1995] 1 Ll Rep 374; [1995] CLC 1025 (CA).
Gubisch Maschinenfabrik KG v PalumboECAS (Case 144/86) [1987] ECR 4861; [1989] 1 CEC 504.
Haji-Ioannou v Frangos [1999] CLC 1075.
Overseas Union Insurance Ltd v New Hampshire Insurance CoELR [1992] QB 434.
Sarrio SA v Kuwait Investment Authority [1997] CLC 1640; [1999] 1 AC 32.
Shamia v JooryELR [1958] 1 QB 448.
Tatry v Maciej RatajECAS (Case C-406/92) [1995] CLC 275; [1994] ECR I-5439.
Tilly Russ, TheELR [1985] QB 931.
Toepfer (Alfred C) International GmbH v Société Cargill France [1998] CLC 198.
Contract — Conflict of laws — Exclusive jurisdiction clause — Stay of proceedings — Whether proceedings in France and England were between the same parties and had the same cause and object — When court was seised of third party proceedings — Whether proceedings were related — Effect of exclusive English jurisdiction clauses — Whether clauses bound assignee — Whether English court should stay proceedings — Civil Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention), art. 17, 21, 22.
These were applications raising the question whether issues in the proceedings should be determined in England or France.
“Metro” provided storage facilities for oil products in vessels stationed off Fujairah and also acted as an oil trader. In 1998 Metro collapsed insolvent. Before it collapsed Metro agreed to sell a cargo of heavy fuel oil carried on the vessel Vigour to two buyers in Singapore, “Itochu” and “SPC”. The contracts were subject to English law and included exclusive English jurisdiction clauses (“EJCs”). Bills of lading in respect of the cargo were issued to the order of the French bank which was financing Metro's operations. The Singapore branch of the French bank obtained letters of undertaking from Itochu and SPC to pay the invoice price of the goods to the bank for the account of Metro in accordance with the terms of the sale contracts. In February 1998, shortly after the goods were delivered in Singapore, the claimant, “Glencore”, began proceedings in England against Metro and certain shipowners seeking delivery up of oil cargoes said to be in their possession and damages for conversion and breach of contract. The English court appointed receivers to get in and preserve Metro's property and receivables. A Greek court appointed a liquidator of Metro. In March 1998 the French bank commenced proceedings in Paris against Metro, Itochu and SPC for the amounts due under the contracts of sale. The French court became seised of those proceedings in June 1998 when the originating process was lodged at the court following service on the defendants. Itochu and SPC challenged the jurisdiction of the French court on the ground that the bank was bound by the EJCs in their contracts with Metro and on the ground that the court should decline jurisdiction under art. 22 of the Brussels Convention. Glencore obtained leave to join Itochu and SPC as defendants to its action and to serve them out of the jurisdiction. SPC applied to join Glencore, the receivers and the liquidator as third parties to the bank's French proceedings. The receivers issued proceedings in England in the name of Metro against Itochu for the price of the goods. Itochu served third party proceedings on the bank in those proceedings and in Glencore's proceedings.
The bank applied to stay Itochu's third party proceedings in the Glencore and Metro actions in favour of the French proceedings on the basis of art. 21 of the Brussels Convention. SPC applied to stay Glencore's action in favour of the French proceedings. Itochu applied, if the bank was successful in obtaining a stay of the third party proceedings, to stay the receivers' action and Glencore's action.
Held ruling accordingly:
1. Itochu's third party proceedings against the bank were between the same parties as the French proceedings within art. 21 because the same parties were joined in two actions even though other parties were joined to one or both. ( Gubisch Maschinenfabrik KG v PalumboECAS (Case 144/86) [1987] ECR 4861; [1989] 1 CEC 504applied.)
2. The proceedings had the same “cause” under art. 21, meaning the factual and legal basis of the claims, which consisted of the rights and liabilities of Metro and the bank under the contracts of sale and letters of undertaking. The proceedings also had the same “object” under art. 21, meaning “the end the actions had in view”, because the object of Itochu's proceedings was to ensure that as between the bank and Itochu the bank was bound by a decision on whether Metro had title to the goods sold and delivered under the contract, which was the essence of the bank's claim in France. ( Tatry v Maciej RatajECAS (Case C-406/92) [1995] CLC 275; [1994] ECR I-5439 applied; Haji-Ioannou v Frangos[1999] CLC 1075distinguished.)
3. The pendency of proceedings for the purposes of art. 21 was to be determined party by party and on that basis the French court was seised of the proceedings before the third party notice was served and art. 21 required the court to decline jurisdiction. ( Tatry v Maciej RatajECAS (Case C-406/92) [1995] CLC 275; [1994] ECR I-5439applied.)
4. Article 17 of the Brussels Convention took priority over art. 21 and Itochu had a good arguable case that the EJCs were within art. 17 and bound the bank. ( Continental Bank NA v Aeakos Compania Naviera SAWLR [1994] 1 WLR 588 applied.)
5. The bank sued as assignee of Metro and as such was bound by an art. 17 agreement. It was not necessary to show that the bank had actual notice of the jurisdiction clause when it took the assignment. ( The Tilly RussELR [1985] 1 QB 931 and Firswood Ltd v Petra Bank (unreported, 13 December 1995, CA) applied.)
6. All the actions were related actions within art. 22 and did not cease to be related because proceedings were also within art. 21. The actions were related because all raised in one form or another the question of title to the cargo. However art. 22 did not override art. 21. ( Overseas Union Insurance Ltd v New Hampshire Insurance CoELR [1992] QB 434 applied.)
7. Were it not for the EJCs the right course would be to stay the third party proceedings under art. 21 pending a decision by the French court as to its jurisdiction and the desirability of imposing a stay or declining jurisdiction under art. 22. The English court had to give effect to the EJCs and refuse a stay of the third party proceedings. On that basis there was no need to stay the receivers' and Glencore's actions on the application of Itochu.
8. SPC was entitled to a stay of Glencore's proceedings. The proceedings were within art. 21 and there should be a stay until the French court had ruled on the questions of its jurisdiction and the effect of art. 22.
Moore-Bick J: Introduction
I have before me five applications in two actions which form part of the extensive litigation arising out of the collapse in early 1998 of Metro Trading International Inc (“Metro”). While it carried on business Metro provided storage facilities for oil products in vessels stationed off Fujairah and also acted as an oil trader in its own right. Following its collapse a number of companies which had delivered products to Metro for storage have claimed title to the stocks which remained in Metro's possession. In some cases they have also asserted that oil products which Metro had sold and delivered to third parties were their property and have made claims against the buyers in conversion. The applications now before me are made in two actions which relate to a cargo of heavy fuel oil carried on board the vessel Vigour from Fujairah to Singapore in February 1998. Two further actions have been commenced in the Tribunal de Commerce in Paris by Banque Trad-Credit Lyonnais (“the bank”) which is seeking to recover the price due under the contracts of sale under which the cargo on the Vigour was sold by Metro to two buyers in Singapore, Itochu Petroleum Co (S) Pte Ltd (“Itochu”) and Singapore Petroleum Co Ltd (“SPC”). It is the existence of the concurrent proceedings in England and France which has given rise to the present applications which all concern, directly or indirectly, the question whether the issues which they raise should be determined here or in France.
In order to set the present applications in context it is necessary to describe briefly the events which have given rise to them. In October 1997 Metro entered into a contract with Itochu for the sale of six cargoes of bunker fuel, delivery to be made at the rate of one each month from November 1997 to April 1998 inclusive. On 21 January 1998 Metro entered into a contract with SPC for the sale of a single parcel of bunker fuel for delivery in February 1998. The contracts were on very similar terms: each was subject...
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