Mike Trading and Transport Ltd v R Pagnan & Fratelli (Lisboa)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE WALLER,LORD JUSTICE DUNN |
| Judgment Date | 30 July 1980 |
| Judgment citation (vLex) | [1980] EWCA Civ J0730-6 |
| Docket Number | 1979 M. No. 4532 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 July 1980 |
[1980] EWCA Civ J0730-6
The Master Of The Rolls
(Lord Denning)
Lord Justice Waller and
Lord Justice Dunn
In The Supreme Court of Judicature
Court of Appeal
(Civil Division)
On Appeal From The High Court Of Justice
Queen's Bench Division
Commercial Court
(Mr. Justice Mocatta)
MR. A. G. POLLOCK, Q. C.. and MR. H. B. EDER (instructed by Messrs. Holman Fenwick & Wilian) appeared on behalf of the Plaintiffs (Appellants).
MR. MICHAEL DEAN (instructed by Messrs. Clyde & Co.) appeared on behalf of the Defendants (Respondents).
The Lisboa was 29 years old. On the 3rd December, 1978 she left Buenos Aires in the Argentine. She was carrying a full cargo of wheat pollard pellets 13,000 tons of it. She was bound for a port in Italy called Chioggia, near Venice. During the voyage she had engine trouble. She had to stop or reduce speed on many occasions. She managed to cross the Atlantic, get through the Straits and into the Mediterranean. But than, when she was off Tunisia, the engines broke down completely. She drifted helplessly towards the shore. The Master radioed for assistance. A tug came out from Tunis and towed her into a Tunisian port called La Goulette. She got there on the 4th January, 1979. The master signed a salvage agreement. The remuneration was afterwards agreed at £204,307.
At La Goulette what was to be done? The cargo owners were Pagnan Brothers, a substantial Italian firm. They had bought the 13,000 tons for £1,100,000. They had contracted to sell it to various receivers in Italy. It was a perishable commodity. They feared that, if the vessel had to stay a long time in La Goulette for repairs to be done the cargo would perish and they would be liable to the receivers. The cargo was in a dead ship without any means of ventilation. It was imperative that the cargo should be carried on to its destination and discharged as soon as possible.
All concerned strove for a solution. There was a series of telexes between 10th and 18th January, 1979 covering 23 closely typed pages of correspondence. Eventually an agreement was reached by which the ship was to be towed all the way from La Goulette to Chioggia on various terms which are too complex to be mentioned here. As a result the cargo-owners employed a tug to tow the vessel all the way round Sicily and the toe of Italy, and up the Adriatic to Chioggia. This towage cost £60,295.
The vessel arrived in Chioggia on the 25th January, 1979. She was unloaded. It was then found to the relief of the cargo-owners that the cargo had suffered no appreciable damage. It was delivered to the receivers and all was well on that score.
Now comes the point. The cargo-owners had had to pay all the expenses sofar. Their cargo was worth £1,000,000, and they had had to pay out all the money to save it. The vessel was only worth £300,000. The shipowners had not the money or the will to repair the ship at La Goulette or to pay the expenses of towage. So the cargo-owners had to pay out for the towage to La Goulette £204,307.00: for the towage to Chioggia £60,295.00 with some additional sums waking in all £288,201.79. They had paid out that sum in order to get their cargo to its destination whereas the ship ought to have carried it there under the contract of carriage without the cargo-owners being put to any such sums.
Having paid out all that money, the cargo-owners thought it should be repaid to them by the shipowners. The shipowners refused to pay anything towards it at all. They said that the cargo-owners had no claim because they had given it up in the series of telexes between the 10th and 18th January, 1979. I will not go into all the details: but, in the result, the cargo-owners issued legal proceedings in the Court of Venice to recover the amount and to arrest the ship. On the 1st February, 1979 the President of the Court of Venice made a decree authorising the arrest of the vessel. On the 6th February, 1979, the vessel was arrested at Chioggia. Shehas been there ever since. Her owners have never put up any security for her release. Nor has the P. and I, Club on their behalf. The shipowners have never tried to get the vessel repaired or to put her to any use at all. I do not suppose she is worth it.
Now comes the thunder-bolt. The shipowners, having failed so completely to carry out the contract of carriage, have brought proceedings against the cargo-owners. On the 3rd December, 1979 the shipowners issued a write in England claiming:
(1) That the arrest in Italy of the vessel was unlawful: because there was an exclusive jurisdiction clause in the 8ill of Lading by which any proceedings had to be brought in London, England.
(2) That there was nothing owing by them, because the cargo-owners had agreed -in the series of telexes to bear all the towage expenses, and so forth, themselves without any charge to the shipowners. (3) That, owing to the wrongful arrest, they had lost the vessel's earnings under the remainder of her charterparty, and any further earnings. Their total claim was for £775,681.25.
In reply, a few days later, on the 10th December, 1979 the cargo-owners issued a writ in the High Court in England against the shipowners, in which they alleged that the vessel was unseaworthy and that the shipowners had failed to exercise due diligence. They claimed as damages the expenses they incurred in the salvage and towage amounting to £288,201.7.
The shipowners then applied for an interlocutory injunction to restrain the cargo-owners from proceeding with the arrest of the vessel and, in effect, for a mandatory injunction for her to be released. The judge refused it. He held that the ship should remain under arrest in Italy. It was up to the ship-owners or their P. and I. Club to put up security if they wished to get it released. Now there is an appeal by the shipowners to this court. They ask for an injunction to stop the cargo-owners arresting the ship. They rely on the exclusive jurisdiction clause in the Bill of Lading, to which I now turn.
THE EXCLUSIVE JURISDICTION CLAUSE
The Bill of Lading contained this exclusive jurisdiction clause: "4. Any and all legal proceedings against the carrier shall be brought before the competent court at London, which shall have exclusive jurisdiction, subject to appeals, if any, pursuant to English law, unless the carrier expressly declares his option for other jurisdiction or expressly agrees to other jurisdiction."
At the hearing before Mr. Justice Mocatta the cargo-owners conceded that the proceedings in Venice for the arrest of the vessel was a breach of that clause. I doubt very much whether it was.
Before us Mr. Dean withdrew that concession. He submitted that, on its true construction, it did not exclude proceedings in a foreign court for the arrest of a ship. I think this is right for two reasons:
"Any and all legal proceedings" should be construed as relating only to proceedings to establish liability. They do not extend to proceedings to enforce a judgment or award or to obtain security. Test it by taking a case where the cargo-owners, in accordance with the clause, bring an action in London and get a judgment for damages against the shipowners. The ship may be, as here, owned by a one-ship company, which has no other assets. It may be, as here, in a port in Italy. It cannot be supposed that this clause prevents the cargo-owners from enforcing the judgment in Italy, If it did, it would be void under Rule III of the Hague Rules.
Clause 3 (Paramount Clause) of the Bill of Lading speaks of the "carrier" and the "ship" as though the two are different. So do the Hague Rules and the Carriage of Goods by Sea Act 1924. These give a different definition of "carrier" from that of a "ship". I know that in the Bill of Lading, clause 13 (the definition clause) says that "carrier" includes "the ship". But that does deter me from holding that in clause 4 "carrier" does not include the "ship". So in my opinion clause 4 does not preclude proceedings in a foreign country for arrest of a ship. Any other interpretation would deprive the cargo-owner of his only effective remedy against a one-ship company. Suppose the cargo is damaged or delayed and the cargo-owner has a cause of action for damages. He may bring legal proceedings in England and get judgment or an award, but that is no good to him. The company has no assets here. And the ship may never come to England. The only effective remedy of the cargo-owner is to arrest the ship in whatever jurisdiction it happens to be. The shipowner, or the P. and I. Club, will then provide security so as to get her released. Having got the security, the cargo-owner can then start legal proceedings in England for damages
THE REMED BY INJUNCTION
Suppose, however, that that interpretation is wrong: and that clause 4 does prohibit the cargo-owner from arresting the vessel in any other jurisdiction than England. Suppose then that in breach of that prohibition, thecargo-owner does go to another jurisdiction such as the Court of Venice and gets the ship arrested there. Will the English court grant an injunction to stop the arrest? In considering this point, we have to put on one side all those cases in which there is a clause giving exclusive jurisdiction to a foreign court. If one of the parties brings an action in the courts of this country, we have ample jurisdiction to stay the proceedings here so as to give effect to the clause: or, alternatively, to allow the proceedings to continue here, if the justice of the case so requires. This is because we are in charge of our own proceedings, see the principles stated in The Athenee (1922) 2 Lloyds Law Reports 6, The Fehmarn (1958) 1...
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