Harms Bergung Transport und Heavylift GmbH & Company KG v Harms Offshore AHT 'Uranus' GmbH & Company KG and Others (Defendants/Applicants)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Simon |
| Judgment Date | 07 May 2015 |
| Neutral Citation | [2015] EWHC 1269 (Admlty) |
| Court | Queen's Bench Division (Admiralty) |
| Docket Number | Claim Nos: 2014 Folio 1343-1348 |
| Date | 07 May 2015 |
[2015] EWHC 1269 (Admlty)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMIRALTY COURT
Royal Courts of Justice
Rolls Building, EC4A 1NL
The Hon Mr Justice Simon
Claim Nos: 2014 Folio 1343-1348
Mr John Kimbell QC (instructed by Keates Ferris) for the Defendants/Applicants
Mr Chris Smith (instructed by Fleet Hamburg LLP) for the Claimant/Respondent
Hearing date: 15 April 2015
Introduction
This is the hearing of the Defendants' applications dated 23 December 2014 seeking declarations that the Court has no jurisdiction in respect of the Claimant's claims, or alternatively that any in personam claims be stayed under s.9 of the Arbitration Act 1996.
On 4 November 2014 the Claimant (a German ship management company) issued six in rem claims against the owners and/or demise charterers of six anchor-handling tugs registered in Germany: 'Uranus', 'Magnus', 'Ursus', 'Taurus', 'Orcus' and 'Janus' ('the Vessels').
The Claim Forms identified brief details of the claim. The details of the first claim are reasonably clear, with some additional punctuation:
Pursuant to the technical and commercial management agreement date 26 May 2009, as amended from time to time ('the Contract') between the Claimant as technical and commercial managers and the owners … and on the basis of acts of owners in way of tort or delict, the Claimant claims damages for wrongful termination of the Contract by owners by way of selling the Vessel without due notice or at all, causing loss and damage to the Claimants.
It is common ground between the parties that this is a claim for damages for the unlawful termination of ship management agreements by the Defendant; and that it is a claim falling within the Admiralty Jurisdiction of the High Court, by reason of s.20(1)(a) and s.20(2)(h) of the Senior Courts Act 1981, as amended: being a claim arising out of an agreement relating to the use of a ship. Although the parties have used different descriptions for these claims, I shall refer to them as the 'the ship management claims' and the contracts as 'the ship management agreements.'
The second claim is less clearly articulated:
Further, under the articles of association of the corporate entity of the Owners, the Claimant was a co-owner of the Vessel by way of owning a share in the corporate entity of the Owners. Owners breached the terms of the articles of association by agreeing to sell the Vessel without due notice or at all. The Claimant seeks damages for the wrongful termination of the Contract and for selling the Vessel constituting a breach of the Contract and a breach of the articles of association, tort, and statutory duty in respect of all losses suffered as a result.
This claim is expressed as a co-ownership claim by reference to the Owners' articles of association. It is convenient to refer to these claims as the articles of association claims. In summary, it relates to what is said to be the wrongful resolution by the Defendants to sell the Vessels without giving appropriate notice. The Claimant seeks orders that the resolutions be annulled. There is an issue between the parties as to whether this claim falls within the Admiralty Jurisdiction of the High Court, which turns on the proper interpretation of s.20(2)(a) and (b) of the Senior Courts Act 1981, as amended.
The Claimant's purpose in issuing the Claim Forms was to obtain security for its claims. The ship management claims give rise to disputes which are subject to German arbitration under the terms of clause 15 of the ship management agreements; and the articles of association claims are linked to proceedings before the German Courts which have exclusive jurisdiction under Art. 22.2 of Council Regulation (EC) No.44/2001 of December 2000 ('the Brussels 1 Regulation') since the proceedings have as their object the validity of decisions of companies whose seat is in Germany.
The in rem Claim Forms were not served and none of the Vessels have been arrested within the jurisdiction; however, the Defendants filed an acknowledgement of service on 4 November 2014 and entered an appearance for the purposes of challenging the jurisdiction. There is agreement between the parties that the provisions of CPR Part 61.3(6)) entitled them to do so.
The Defendants' initial attitude, reflected in their applications of 23 December 2014, was to challenge jurisdiction in relation to both claims. More recently their approach has changed in relation to the ship management claims. Not only do they accept that these claims fall within s.20(2)(h) of the Senior Courts Act 1981, they now wish these claims to be decided in this jurisdiction and are prepared to provide appropriate security for the determination of such claims, to be assessed by the Admiralty Registrar under CPR Part 61.5(10) if not agreed. They do not, however, accept that the court has jurisdiction in relation to the articles of association claims, and seek declarations to that effect.
Clause 15 of the ship management agreements provided for German law and arbitration.
This Agreement is governed by German law.
Any and all disputes arising in connection with this Agreement or with respect to its validity, shall be decided upon through a Court of Arbitration based in Hamburg and in accordance with the Rules of Arbitration of the German Maritime Arbitration Association. The proceedings will be conducted in the German language.
One of the issues that arise is as to whether and, if so, in what respects the English Court is conferred with jurisdiction over claims which are clearly subject to a German arbitration agreement.
The Claimant's position is that, although it seeks security for both claims, it is content for these claims to be decided in this jurisdiction, if security is provided and other matters being agreed. However, it does not agree that only the ship management claims should be heard here.
Since no such agreement has been reached, the following issues arise;
(a) Has there been an agreement or mutually enforceable commitment to refer the ship management claims to resolution by this court? Alternatively, are the Defendants entitled to insist that the ship management claims are determined here?
(b) Whether the articles of association claims fall within a head of Admiralty jurisdiction as set out in section 20(2) of the Senior Courts Act 1981?
The background
Both disputes arise from the breakdown in the commercial relationship between the parties as a result of discoveries made in the Autumn of 2014; and there are two ways of viewing these events.
The Claimant's case is that on 9 September it discovered that the Defendants had agreed to sell the Vessels to one of its competitors, a Dutch company, ALP Maritime Services BV.
It took the view that this was a breach of the terms of partnership agreements ('the KG partnership agreements') to which it was a party both as a partner and as an investor in the Defendants, and which gave them pre-emptive rights to purchase four of the vessels if the Defendants wished to sell them, provided the exercise of that right was notified within the time agreed in any sale contract for the giving of approval by the board of directors.
The Claimant claims that there was bad faith either in relation to the time at which the intended sale was made known (making it impossible for the Claimant to exercise its rights of pre-emption), or in concealing the negotiations, or in a failure to take into account the impact of the sales on the Claimant's business. There is also a competition claim based on the purchaser's position in the market.
The Defendants' view of the facts is different. Their case is that the contractual relationships were brought to an end by their discovery that two of the Claimant's directors had been taking secret commissions from the builders of 'Taurus', 'Janus' and 'Ursus'.
An employee of one of the companies in the ship-building consortium, Herr Ebslöh, is said to have admitted his part in the secret payments; and the directors (Herr Albrecht and Herr Mayer) have been convicted of criminal breaches of trust, having been found to have received €750,000. It is said that Herr Mayer has admitted that, as part of the understanding, the price of these vessels was artificially increased. It was this discovery of the payments to the Claimant's directors that led the Defendants to lose trust and commercial confidence in the Claimant as managers of the Vessel; and this, and (what are said to be) difficulties placed in their way when they asked to inspect relevant records, led them to terminate the ship management agreements in November 2014.
One of the issues which will arise, as a matter of German law, in relation to the ship management claims, is whether the Defendant in each case was entitled to terminate the ship management agreements without notice 'for important reason', within the meaning of section 314 of the German Civil Code. The Defendants say they were, since the dishonesty and criminal conduct of Messrs Albrecht and Mayer constituted a good cause for termination under German law. The Claimant says they were not, and that they acted in breach of contract or duties in tort or under statute.
Another issue which arises will be an investigation of the procedural steps which were required to be taken in view of, what the Claimant contends are, its rights as 'co-owners' of the Vessels before their...
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...Mr Smith KC also referred me to Harms Bergung Transport und Heavylift GmbH & Co KG v Harms Offshore AHT ‘Uranus’ GmbH & Co KG et al [2015] EWHC 1269 (Admlty), where claims were made by a technical and commercial manager of six anchor-handling tugs, but the point was not considered because ......