Mora Shipping Inc. of Monrovia, Liberia v Axa Corporate Solutions Assurance Sa and Others
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE CLARKE,LORD JUSTICE NEUBERGER,Lord Justice Clarke,LORD JUSTICE WARD |
| Judgment Date | 28 July 2005 |
| Neutral Citation | [2005] EWCA Civ 1069 |
| Docket Number | Respondent A3/2005/0674 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 July 2005 |
[2005] EWCA Civ 1069
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
COMMERCIAL COURT DIVISION
(MR JUSTICE LANGLEY)
Royal Courts of Justice
Strand
London, WC2
Lord Justice Ward
Lord Justice Clarke
Lord Justice Neuberger
Respondent A3/2005/0674
MR S KENNY (instructed by Holman Fenwick & Willan) appeared on behalf of the Appellant
MR A BAKER (instructed by Ince & Co) appeared on behalf of the Respondents
Thursday, 28th July 2005
Introduction
This is an appeal from an order of Langley J made on 16th March 2005 in which he declared that the court had no jurisdiction over the claim and ordered that the issue and service of the claim form be set aside. He also ordered the claimant to pay the defendants' costs and gave permission to appeal to this court. The question in the appeal is whether the English court has jurisdiction to entertain an action by the claimant "shipowner" against cargo insurers under a general average guarantee.
The facts
The facts are not in dispute. The claimant was the demise charterer of the vessel "Vitoria" when on 14th February 2003 she sustained serious bottom damage as a result of grounding whilst proceeding down the River Plate. At the time of the grounding she was laden with a cargo of vegetable oil and was en route for India and Bangladesh. The cargo was being carried under various bills of lading and a voyage charterparty, which I will together call the contracts of carriage. The demise charterer was the carrier under the contracts of carriage. Expenditure of a general average nature was incurred by the demise charterer. The bills of lading incorporated the terms of the charterparty. They also provided, by clause 4, for general average to be payable according to the York/Antwerp Rules 1974 and to be settled at the place provided in the charterparty and, by clause 8, for arbitration in London.
Clause 20 of the charterparty provides so far as relevant:
"20. GENERAL AVERAGE. General Average shall be adjusted, stated and settled according to York-Antwerp Rules 1950, at such port or place in the United States as may be selected by the Owner, and as to matters not provided for by these Rules, according to the laws and usages at the Port of New York. in such adjustment, disbursements in foreign currencies shall be exchanged into United States money at the rate prevailing on the dates made and allowances for damage to cargo claimed in foreign currency shall be converted at the rate prevailing on the last day of discharge at the port or place of final discharge of such damaged cargo from the ship. Average agreement or bond and such additional security, as may be required by the Owner, must be furnished before delivery of the cargo. Such cash deposit as the Owner or his agents may deem sufficient as additional security for the contribution of the cargo and for any salvage and special charges thereon, shall, if required, be made by the cargo, shippers, consignees or owners of the cargo to the Owner before delivery. Such deposit shall, at the option of the Owner, be payable in United States money, and be remitted to the adjuster. When so remitted the deposit shall be held in a special account at the place of adjustment in the time of the adjuster pending settlement of the general average and refunds or credit balances, if any, shall be paid in United States money."
Clause 20 is part of the printed form of Vegoilvoy 1/27/50 charterparty. Clause 20 was in part superseded by clauses 31 and 32 which were typed clauses and provide as follows:
"31. YORK/ANTWERP RULES 1994
York/Antwerp rules 1994 to apply to this Charter Party.
"32. GENERAL AVERAGE/ARBITRATION
General Average/Arbitration to be London with English law to apply."
It is common ground that by the combined effects of those clauses it was agreed that general average would be stated and settled in London under the York/Antwerp Rules 1994. It is also common ground that in this context "settled" means "paid" and therefore it was agreed that general average would be paid in London: see Union of India v EB Aaby's Rederi A/S [1975] AC 797 per Viscount Dilhorn at 815B. It is thus a different case from that considered by this court in Sameon Co SA v NV Petrofina SA, unreported, 30th April 1997.
The claimant appointed the well-known average adjusters Richards Hogg Lindley (RHL) to collect general average security and to carry out the general average adjustment.
The Average Guarantee
The defendants were the cargo insurers of the whole cargo. At the invitation of RHL each subscribed, for its respective proportions of the cargo it insured, to a general average guarantee covering cargo interests' liabilities in general average.
The claimant company is incorporated in Liberia and domiciled in Liberia and/or Norway. The first and second defendants are incorporated and domiciled in France, the third defendant in Belgium, the fourth defendant in the Midlands, and the fifth and sixth defendants in Switzerland.
The average guarantee is expressed to be addressed "To the Owners of the 'Vitoria' and other parties to the adventure as their interests may appear."
It provides as follows:
"In consideration of the delivery in due course of the goods specified below to the consignees thereof without collection of a deposit, we, the undersigned insurers, hereby undertake to pay to the shipowners or to the Average Adjusters, Richards Hogg Lindley Limited, on behalf of the various parties to the adventure as their interests may appear, any contribution to General Average and/or Salvage and/or Special Charges which may hereafter be ascertained to be legally due in respect of the said goods. We further agree:
(a) to make a payment on account of such sum as is duly certified by the average adjusters to be properly payable in respect of the goods and which is legally due in respect of the goods from the shippers or owners thereof.
(b) to furnish to the said Average Adjusters at their request all information which is available to us relative to the value and condition of the said goods.
(c) that any period of prescription whether provided by statue law, contract or otherwise, shall commence to run from the date upon which the general average adjustment is issued."
There then appears a list of the various cargo interests which cover the entire cargo on board the vessel. The average adjusters are stated to be RHL, whose business address in London is given. The average guarantee was signed by the insurers on various dates between 6th March and 7th April 2003.
The Adjustment
It is common ground that the reference to "the shipowners" in the average guarantee is a reference to the claimant. In these circumstances it is convenient to refer to the claimant as "the shipowners".
RHL issued a general average adjustment dated 2nd January 2004. It stated that "those concerned in cargo" were liable to pay general average in the sum of US$ 1,053,302.15. The total general average expenditure was stated to be US$ 1,204,118.76 of which the ship's proportion was US$ 150,816.61. The adjustment was sent to the first defendant under cover of a letter dated 10th February 2003 (an error for 2004) from RHL in these terms:
"We have now completed our general average adjustment in this case and enclose herewith a copy for your attention. You will note on page 6 the amount payable by Cargo Insurers is US$ 1,053,302.15.
We trust that you will find the adjustment to be in order and look forward to receiving your confirmation of settlement in due course. Your remittance should be sent direct to us to the following Account:
Charles Taylor Consulting PLC.
National Westminster Bank.
… London … [The account number is given]"
It should be noted that although the average guarantee refers to Richards Hogg Lindley Limited, RHL is not a corporate entity but a trading division of CTC Management Limited, which is a company incorporated in England, and is ultimately owned by Charles Taylor Consulting PLC (CTC). As can be seen the letter asked for payment "to us" to a specified CTC account in London.
The cargo insurers refused to pay the contributions due from those "concerned in cargo." As I understand it, the reason they have not paid is that they say that the cargo owners are not liable to the shipowners in general average because the vessel was unseaworthy and the grounding and subsequent general average expenditure were caused by the shipowners' breach of the contracts of carriage. The legal position is, of course, that if that is correct the cargo owners would not be liable in general average and the cargo insurers would not be liable under the average guarantee. The shipowners, for their part, deny any breach of the contract of contract and say that the cargo insurers are liable under the guarantee.
Jurisdiction
The shipowners have brought this action in order to recover the cargo insurers' several contributions to the sum of US$ 1,053,302.15 under the average guarantee. The insurers say that the English court has no jurisdiction to entertain the claim or claims and the judge so held. The question is whether he was right to do so.
The jurisdiction of the court depends upon the provisions of EC Council Regulation 44/2001 ("the Regulation") in the case of the...
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