Horn Linie GmbH & Company v Panamericana Formas e Impresos SA and another
| Jurisdiction | England & Wales |
| Judge | THE HON MR JUSTICE MORISON,The Hon Mr Justice Morison |
| Judgment Date | 06 March 2006 |
| Neutral Citation | [2006] EWHC 373 (Comm) |
| Docket Number | Case No: 2004/830 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 06 March 2006 |
[2006] EWHC 373 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
THE HON MR JUSTICE MORISON
Case No: 2004/830
Mr Timothy Otty (instructed by Constant & Constant) for the Claimant
Mr Nigel Cooper (instructed by Cozen O'Connor) for the Defendants
Hearing dates: 31 January 2006
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is a challenge to the court's jurisdiction and a cross-application for an anti suit injunction.
The underlying dispute relates to a contract of carriage evidenced by a bill of lading dated 6 October 2003 in respect of a shipment of goods from Hamburg in Germany to Cartagena in Colombia on board a vessel called the M.V. HORNBAY. The Claimants are a German ship owning company that operates a liner service to South America. The First Defendants were the consignees of a cargo shipped on board the vessel. The cargo was printing machinery which was, contrary to instructions, stowed on deck as opposed to under deck. During the early stages of the voyage there was inclement weather and the goods were landed at Le Havre and are a constructive total loss.
On its face the bill of lading referred to a jurisdiction clause on its reverse, and by clause 37 it was stated that
"The contract evidenced by this bill of lading shall be governed by English Law and any disputes thereunder shall be determined in England by the High Court of Justice in London according to English law to the exclusion of the Courts of any other country."
Other standard terms include an express incorporation of the Hague-Visby Rules (including thereby the weight related limitations and a 1 year limitation period) and a Himalaya Clause exempting the Claimants' agents from "any liability whatsoever … to the Consignee".
The Second Defendants are the cargo insurers, ACE, who are responsible for the events which have given rise to this jurisdiction challenge.
ACE procured proceedings to be issued against Maritrans, the Claimants' agents in Colombia, in the Colombian courts, seeking judgment for the full value of the cargo. That claim is founded upon the contract of carriage and Maritrans are claimed to be contractually liable. Reliance is placed on two Articles of the Colombian Code of Commerce:
Article 1455 which provides:
"The [shipowner] of every foreign ship arriving to port must have a maritime agent accredited in the country. For all legal effects, the maritime agents of the ships must be the representative of their owners .."
Article 1492:
"The responsibilities of the agent are as follows:
4. To legally represent the [shipowner] or captain regarding responsibilities inherent to the ship of which it is the agent ..
5. To personally and with solidarity be responsible with the captain of the ship for the non-execution of the duties relating to the delivery or reception of the merchandise."
To some extent the legal effect of these provisions is controversial and the two experts are not in agreement. The Defendants say that a contract for the carriage of goods to and delivery in Colombia is governed by Colombian Law and secondly the parties cannot agree a choice of foreign law and jurisdiction as any such term would be void and contrary to public policy: it would infringe the sovereignty of its law. Pursuant to Article 23.5 of the Code of Civil Procedure, the forum for a contractual dispute is to be determined by the place of performance or the Defendant's domicile, at the plaintiff's option. Contracts arranged abroad but to be performed in Colombia must be governed by Colombian Law except where the parties have agreed to resolve their disputes by international arbitration. The Claimants dispute the proposition that a contractual choice of foreign law or place of jurisdiction other than Colombian Law or in the Colombian courts [at the claimants' option] would be contrary to public policy and unenforceable. They argue that the express exception for international arbitration emphasises that the Claimants' arguments cannot be right, since the law would not provide for an exception which was contrary to public policy. Since this argument before me was concluded, a judge at first instance has found that the Colombian courts have jurisdiction and will apply Colombian law to the dispute. The judgment will be appealed if necessary and a notice of appeal has been filed. On the basis of the written material I cannot resolve the issues of fact as to the proper interpretation of Colombian Law and, for reasons which will emerge, I do not think that I have to do so to rule on the two substantive applications before the Court:
(1) an application by the Defendants challenging this court's jurisdiction and
(2) an application by the Claimants for an anti suit injunction against the Defendants in respect of the Colombian proceedings.
As counsel for the Claimants submitted, the resolution of these disputes has commercial significance. If the English proceedings for a negative declaration, which were commenced contemporaneously with the commencement of the Colombian proceedings, were allowed to proceed, the cargo interests would be likely to recover nothing because of the time limit, which, despite reminders of the position, the defendants failed to heed. On the other hand, the Colombian Courts will not apply the "Hague-Visby" Rules and may not recognise and give effect to the parties' contractual bargain as to choice of law and forum; thus, if those proceedings are allowed to continue, ACE may be able to recover the full value of the claim without reference to the provisions of the "Hague-Visby" rules.
The Jurisdiction Challenge
I start with the Defendants' jurisdiction challenge. The Defendants challenge the validity of clause 37 as being an effective choice of law or forum clause. They do so
"on the basis that the appropriate law to determine the validity of that clause is Colombian law and by that law a choice of law and court is void and contrary to public policy for contracts to be performed in Colombia".
The choice of applicable law is governed by the Contracts (Applicable Laws) Act 1990 which incorporates the Rome Convention into English law [so much is common ground].
The Convention provides, relevantly, that:
"Article 3.1: A contract shall be governed by the law chosen by the parties. The choice must be express or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable to the whole or a part only of the contract."
Article 3.4: The existence and validity of the consent of the parties as to the choice of the applicable law shall be determined in accordance with the provisions of Articles 8, 9 and 11.
Article 8.1 The existence and validity of a contract, or of any term of a contract, shall be determined by the law which would govern it under this Convention if the contract or term were valid.
Article 8.2 Nevertheless a party may rely upon the law of the country in which he has his habitual residence to establish that he did not consent if it appears from the circumstances that it would not be reasonable to determine the effect of his conduct in accordance with the law specified in the preceding paragraph.
The Defendants' arguments
ACE and their insured contend that it would not be reasonable to determine the effect of their conduct in accepting the express choice of law in accordance with English Law; rather, the issue of consent [under Article 8.2] should be determined by Colombian Law for the following reasons:
(1) The Claimants are a company carrying on business running a regular container service to Colombia. They comply with the requirement of Colombian Law that it must have a representative in Colombia and the Claimants should therefore be aware of the provisions of Colombian law which apply.
(2) The First Defendant was not a party to the original contract with the Claimants; it entrusted the choice of carrier to its Colombian forwarding agent [Translago] with whom it contracted for the movement of the print machinery from Hamburg to Cartagena.
(3) The First Defendant was unaware prior to the cargo damage that the Claimants purported to do business on terms that included a choice of English law and jurisdiction.
(4) The First Defendant has not issued proceedings against the Claimants in Colombia: they have merely sued Maritrans, their representative relying on the relevant principles of Colombian law [Articles 1455 and 1492].
(5) Colombian law stipulates that a contract for the carriage of cargo to and for delivery in Colombia is governed by Colombian Law and that the parties cannot agree a choice of foreign law and jurisdiction as any such term would be void and contrary to public policy. The Claimants could have lawfully chosen arbitration in a foreign forum but did not do so.
The Claimants' submissions
Mr Timothy Otty for the Claimants submitted that there are two questions:
(1) would it be unreasonable in the circumstances to look to English law to determine whether the First Defendants consented to the choice of English law? and
(2) if it is unreasonable, can the First Defendants rely upon Colombian Law to establish that it did not consent to clause 37?
He submitted that some guidance is to be derived from the judgment of Mance J. in Egon Oldendorff v Liberia Corporation [1995] 2 Lloyd's Reports 64 at pages 70 – 71. In essence the Judge decided that the question of...
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