Grace Ocean Private Ltd v COFCO Global Harvest (Zhangjiagang) Trading Company, Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Bryan |
| Judgment Date | 04 December 2020 |
| Neutral Citation | [2020] EWHC 3343 (Comm) |
| Docket Number | Case No: CL-2020-000603 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 04 December 2020 |
[2020] EWHC 3343 (Comm)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES COMMERCIAL COURT (QBD)
IN AN ARBITRATION CLAIM
AND IN THE MATTER OF AN ARBITRATION
Royal Courts of Justice
Rolls Building, Fetter Lane
London, EC4A 1NL
THE HONOURABLE Mr Justice Bryan
Case No: CL-2020-000603
Neil Henderson (instructed by Penningtons Manches Cooper LLP) for the Claimant
The Respondent was not represented and did not appear.
Hearing date: 4 December 2020
APPROVED JUDGMENT
A. Introduction
This is the return date in relation to an interim anti-suit injunction granted on 12 October 2020 by Cockerill J (the “ASI Order”), following a hearing on 9 October held ex parte but after informal notice had been given to the Defendant, on the application of Grace Ocean Private Limited (“Owners”), whereby the Defendant COFCO Global Harvest (the “Defendant”) was restrained from pursuing the claim for damage to a cargo of Brazilian soyabeans proceedings commenced by it before the Qingdao Maritime Court on 6 August 2020 (“the Chinese Proceedings”) on the basis that the same was in breach of London arbitration agreements contained in the contracts of carriage, the cargo had been carried on board Owners' vessel, the BULK POLAND (“the Vessel”). Those Chinese Proceedings had been commenced in breach of London arbitration agreements.
According to the evidence of Mr Sachs in his third statement, which I accept, the ASI Order was served on the Defendant by email the same day, and on the Defendant's Chinese lawyers on 13 October. There has been no response from the Defendant, and it has not acknowledged service (which should have been done by 9 November). The Defendant was notified of this return date hearing on 26 October 2020 and again on 23 November and has been provided with a copy of the hearing bundle (on 2 December), as well as a copy of the Owners' Skeleton Argument, bundle of authorities and details of the hearing time and how to attend the hearing.
The Defendant did not attend the hearing, and I was satisfied that it was aware of the hearing, had been given proper notice of the hearing, and chose not to attend. In such circumstances I allowed the return date hearing to proceed in the absence of the Defendant.
B. Background to the application and the underlying dispute
The dispute arises out of the carriage of some 69,699.714 mt of 2019 crop Brazilian soybeans in bulk (“the Cargo”) on board the Vessel from the port of Barcarena, Brazil, to the People's Republic of China. The contracts of carriage were contained in or evidenced by four bills of lading dated 1 July 2019 (“the Bills of Lading”/the Bills). There were four shippers of the Cargo., and the Bills of Lading were consigned “TO ORDER”. The Defendant's name and address were stated in the “Notify address” section of each Bill. The original Bills of Lading were presented at Longkou by the Defendant, which took delivery of the Cargo.
The Claimants, a company incorporated in Singapore, are the owners of the Vessel and the contractual carrier of the Cargo. The Defendant is the receiver of the Cargo and is a company incorporated in the People's Republic of China. The Cargo was insured by China Pacific Insurance Co., Ltd (“CPIC”).
The reverse of each of the Bills of Lading set out the Conditions of Carriage. Clause 1 of the Conditions of Carriage states that:
“(1) All terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration Clause, are herewith incorporated.”
The front page of each of the Bills of Lading referred to a charter party dated 17 May 2019 as follows:
“Freight payable as per charter party dated 17 May 2019.”
The Vessel was subject to three charterparties.
(i) The Claimant, by way of a time charter dated 7 November 2011, chartered the Vessel to DryLog Bulk Carriers Ltd (the “Head Time Charter”).
(ii) (DryLog Bulk Carriers Ltd as disponent owners sub-chartered the Vessel to Star Logistics LLC (“Star”) by way of a sub-time charter (the “Time Charter”).
(iii) By a fixture recap dated 17 May 2019 incorporating an amended CONVOY Charterparty (Adapted 2004) with rider clauses, Star sub-chartered the Vessel to Gavilon Grain LLC (“the Voyage Charter”)
I am satisfied, based on the express wording in Clause 1 of the Conditions of Carriage of the Bills of Lading, that the reference is to the Voyage Charter.
Clause 14 of the amended CONVOY Charterparty (Adapted 2004) incorporated in the Voyage Charter provides:
“ Bill of Lading
14. It is also mutually agreed that this contract shall be completed and superseded by the signing of Bills of Lading. Any Bill of Lading issued under this Charter Party are [sic] considered to incorporate all terms/conditions including arbitration to this Charter Party.”
Clause 56 of the amended CONVOY Charterparty (Adapted 2004) further provides:
“ Arbitration:
56. [New York provisions deleted]
Arbitration London – English Law to apply
…
Any dispute arising hereunder shall be governed by English law.
…
Any claim must be made in writing and Claimants' arbitrator appointed or proposed within twelve months of final discharge and where this provision is not complied with, the claim shall be deemed to be waived and absolutely barred.”
On established principles I am satisfied that, as a matter of English law, the effect of the first line of the terms and conditions of the Bills of Lading is to incorporate the terms of the Voyage Charterparty, including the choice of English law and London arbitration, into the contracts of carriage contained in or evidenced by the Bills of Lading.
The result of the contractual terms agreed between the parties to the contracts of carriage as contained in or evidenced by the Bills of Lading is that any substantive claim by cargo interests under the Bills of Lading is subject to English law and must be brought by way of London arbitration only.
The Vessel arrived at Longkou anchorage on 14 August 2019 and tendered Notice of Readiness on the same day. The Vessel berthed on 18 August 2019 and commenced discharge of the Cargo.
A “Notice of Claim” dated 19 August 2019 was then served by the Defendant asserting that they were the final holders of the bills of lading and alleging heat damage to the Cargo during the carriage onboard the Vessel, indicating a claim and threatening the arrest of the Vessel.
The Defendant demanded security for their claim in the amount of US$4.5 million. In order to prevent arrest of the Vessel, Wang Jing, on behalf of Owners, negotiated security provided by Gard, the Claimant's protection and indemnity insurers, as counter-securer to China Reinsurance (Group) Corporation. The latter then issued a Letter of Undertaking (“LOU”) directly to the Defendant. This approach was taken because Chinese parties and Chinese courts do not generally accept security directly from international P&I clubs.
The LOU was in Chinese, and in the English free translation, provided amongst other matters, as follows:-
“we, China Reinsurance (Group) Corporation…hereby undertake to pay to you on demand such sum or sums, as may either be agreed in writing between the parties, or as may be adjudged by an effective judgment or mediation award of the competent Court or awarded by a final award or a mediation award by the competent Tribunal…”
The Vessel completed discharge of the Cargo on 24 August 2019 and sailed from Longkou on the same day.
On 6 August 2020 the Defendant filed a Statement of Claim against Owners before the Qingdao Maritime Court seeking compensation for alleged damage to the Cargo during the carriage from Brazil to the People's Republic of China. The sum claimed by the Defendant is RMB12,098,315.70 plus interest, which sum amounts to circa US$1,790,660 (the “Chinese Proceedings”).
On 19 August 2020, the claim documents together with the Court's writ of summons were served on Wang Jing, who are based in Qingdao. The writ of summons set a first hearing date for the case of 22 October 2020 from which it was clear that the Defendant was intent on prosecuting a claim in the People's Republic of China in breach of the agreement to submit disputes to London arbitration.
The Owners issued a challenge to the jurisdiction of the Qingdao Maritime Court. This was rejected on 24 September 2020. The Owners appealed that decision to the Shandong Higher People's Court on 20 October, and is awaiting its decision.
On 8 September Owners English solicitors wrote to the Defendant informing it that the Chinese Proceedings were in breach of the London arbitration agreements, requiring it to confirm that it would withdraw the Chinese Proceedings by 15 September and warning it that failure to do so would mean it would face an application to the English court for an anti-suit injunction.
The Defendant did not respond to that letter, or any of the subsequent correspondence relating to the present claim and application before the English court.
Owners therefore issued the arbitration claim form on 16 September and sought the interim antisuit injunction, as it had threatened to do. As already noted the ASI Order was made on 12 October, following the hearing on 9...
To continue reading
Request your trial