Mora Shipping Inc. of Monrovia v Axa Corporate Solution Assurance SA [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | THE HON. MR JUSTICE LANGLEY |
| Judgment Date | 16 March 2005 |
| Neutral Citation | [2005] EWHC 315 (Comm) |
| Date | 16 March 2005 |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2004 FOLIO 866 |
[2005] EWHC 315 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
The Hon. Mr Justice Langley
Case No: 2004 FOLIO 866
Mr S. Kenny (instructed by Holman Fenwick & Willan) for the Claimant
Mr A. W. Baker (instructed by Ince & Co) for the Defendants
Hearing date: 25 th February 2005
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.
The Hon Mr Justice Langley:
The Application
The Defendant Insurers apply for an order that this court has no jurisdiction over this claim and so that the issue and service upon them of the Claim Form be set aside.
The Claimant company is incorporated in Liberia and domiciled in Liberia and/or Norway. The company was the demise charterer and disponent owner of the vessel 'Vitoria' on 14 February 2003 when it sustained serious bottom damage proceeding down the River Plate. The Defendants are incorporated and domiciled in France (defendants 1 and 2), Belgium (defendant 3), the Netherlands (defendant 4) and Switzerland (defendants 5 and 6).
Article 2 of EC Council Regulation 44/2001 (in the case of defendants 1 to 4) and Article 2 of the Lugano Convention (in the case of defendants 5 and 6) require that the Defendants be sued in the countries of their domicile unless some special ground of jurisdiction under the Regulation or Convention applies.
The Average Guarantee
The claim in these proceeding is brought against the Defendant Insurers as subscribers, for their respective proportions, on various dates in March and April 2003, to an Average Guarantee which was addressed to "the Owners of the Vitoria and other parties to the adventure as their interests may appear" and which provided:
"In consideration of 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 … 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 ….
(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 … shall commence to run from the date on which the general average adjustment is issued."
The emphasis is mine. The words underlined give rise to the issue on jurisdiction.
The Adjustment
The goods referred to in the Average Guarantee were the entire cargo of the Vitoria. The grounding and the repairs it necessitated caused (so it is alleged) the claimant and others to incur various expenses of a general average nature totalling some US $1.2m. That was the figure set out in a general average adjustment prepared by Richards Hogg Lindley (RHL) dated 2 January 2004. The adjustment also stated that those concerned in cargo were liable to contribute $1,053,302.15 in general average. The adjustment was sent on 10 February 2004 to the first defendant (Axa) under cover of a letter from RHL which called for payment "direct to us to the following Account: Charles Taylor Consulting Plc, National Westminster Bank …. London ….". RHL is not a corporate entity but a trading division of CTC Management Limited ("CTML") which is a company incorporated in this jurisdiction ultimately owned by Charles Taylor Consulting Plc ("CTC").
The Proceedings
The Defendants did not pay in response to the letter from RHL. The Claim Form was issued on 15 October 2004. The present application was made by Notice dated 15 December 2004. The defendants' evidence is that they intend to defend the claim if they fail on their present application, or in a proper forum if they succeed, on the basis that the bottom damage to the vessel was caused by unseaworthiness.
The Issue
The parties are agreed that the only special ground of jurisdiction which could be applicable, if established by the claimant, is to be found in Article 5.1(a) of the Council Regulation and Article 5.1 of the Lugano Convention. So far as material Article 5.1.(a) of the Regulation provides that:
"A person domiciled in a Member State may, in another Member State, be sued:
in matters relating to a contract in the courts for the place of performance of the obligation in question."
Article 5.1 of the Convention is, so far as material, identical.
The question is, therefore, as the parties agree, whether on its true construction the contract, the Average Guarantee, obliged the defendants to pay contribution to general average within the jurisdiction of this court. If it did there is jurisdiction; if it did not, there is not.
The Submissions of the Defendants
Mr Baker, for the defendants submits succinctly that the payment obligation in the Average Guarantee expressly entitled the defendants to pay the shipowner, a company domiciled in Liberia and/or Norway, and so did not oblige the defendants to make payment within the jurisdiction applying the established principle that it is for a debtor to seek out his creditor and pay him at his place of business. On the wording of the Guarantee he submits the undertaking was to pay "to the shipowners or to the Average Adjusters" and that answers the question before the court. It is, of course, the fact that it is the shipowner which brings the present claim to enforce an obligation said to be owed to it.
The Claimant's Submissions
Mr Kenny's submissions for the claimant are, necessarily if they are to succeed, more complex. He accepts (as he must) that the Average Guarantee contemplates two alternative modes of performance of the payment obligation and that one of those modes (payment to the shipowners) would not satisfy the Regulation and Article. But he submits that "the right or power to...
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Mora Shipping Inc. of Monrovia v Axa Corporate Solutions Assurance SA
...— Civil Jurisdiction and Judgments Act 1982, Sch. 3C (Lugano Convention), art. 5.1. This was an appeal from a decision of Langley J ([2005] EWHC 315 (Comm)) that the English court had no jurisdiction to entertain an action by the claimant shipowner against cargo insurers under a general ave......