National Navigation Company v Endesa Gereacion SA
| Jurisdiction | England & Wales |
| Judge | Lord Justice Waller,Lord Justice Carnwath,Lord Justice Moore–Bick |
| Judgment Date | 17 December 2009 |
| Neutral Citation | [2009] EWCA Civ 1397 |
| Docket Number | Case No: A3/2009/0856 and 1064 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 December 2009 |
[2009] EWCA Civ 1397
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Mrs Justice Gloster
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Waller
Vice-President of the Court of Appeal, Civil Division
Lord Justice Carnwath and
Lord Justice Moore–Bick
Case No: A3/2009/0856 and 1064
Vasanti Selvaratnam QC and Tom Whitehead (instructed by Messrs Ince & Co) for the Respondent
Richard Lord QC and Richard Blakeley (instructed by Messrs Thomas Cooper) for the Appellant
Hearing dates : 3rd - 5th November 2009
Lord Justice Waller :
Introduction
The main point on this appeal is whether a judgment of a fellow member state of the European Union ruling against a stay of proceedings on the basis that an arbitration clause was not incorporated in the contract can be relied on as creating an issue estoppel so as to prevent the English court deciding the point differently. The broad picture is as follows. The appellant, Endesa, commenced proceedings in the Mercantile Court of Almeria in Spain in order to arrest a vessel and claim damages for late delivery under a bill of lading for discharging a cargo of coal at a port some way short of the contractual point of discharge. The respondents, NNC, commenced proceedings in the Commercial Court in London without reference to any arbitration clause claiming a declaration of non-liability. NNC however sought a stay from the Almeria court on the grounds that there was an arbitration clause incorporated by reference to a charter party in the bill of lading, alternatively on the grounds that the Commercial Court in London was first seised. The Almeria court ruled (so Endesa alleges) that no arbitration clause was incorporated into the contract, refused to decline jurisdiction on that basis, but stayed proceedings pending the Commercial Court in London establishing its position as the court first seised.
NNC commenced an arbitration and also arbitration proceedings in London (the Arbitration proceedings). By the Arbitration proceedings they sought to establish English law as the putative proper law of the bill of lading and they sought a declaration that the arbitration clause was as a matter of English law incorporated into the bill of lading and further sought an anti-suit injunction seeking to prevent Endesa pursuing any claim other than via arbitration. Endesa's response was to assert that the judgment of the Almeria court was binding on the English Court under Article 33 of Council Regulation (EC) 44/2001 (the regulation) so as to preclude the English court from deciding that question a different way.
Gloster J ruled by a judgment handed down on 1 st April 2009 that the judgment of the Almeria court was a judgment within the regulation but not binding in the Arbitration proceedings, on the basis that those proceedings were not covered by the regulation being excluded by Article 1(2)(d). Gloster J granted a declaration to the effect that as a matter of English law, its putative applicable law, the bill of lading did contain an arbitration clause.
Endesa appeal from that judgment accepting that if she was not bound by the Almeria court judgment, the judge was correct as to putative proper law and indeed correct as a matter of English law on the issue whether the arbitration clause was incorporated.
Although there is an issue in the Court of Appeal (and it would seem not before the judge) as to precisely what the Almeria court decided, the critical issue on the appeal is whether the judgment of the Almeria court is a judgment to which the regulation applies and whether it gives rise to an issue estoppel in the Commercial Court in London in the Arbitration proceedings.
The judge's task was made more difficult by the fact that, after preparing her judgment in draft, the European Court of Justice (the ECJ) handed down its decision in The Front Comor [2009] 1 Ll Rep 413. It became common ground that following that decision there could be no question of the Commercial Court granting an injunction. What remained in issue was whether a judgment of the Almeria court was a judgment within the regulation and enforceable as such. The judge accepted that the ECJ in that case had ruled that a decision taken as to the applicability of an arbitration clause in the course of proceedings which did fall within the regulation, was a regulation judgment and that thus the Almeria judgment was a regulation judgment. But she held it was not binding in proceedings which were themselves excluded from the regulation, as she held the Arbitration proceedings were.
Endesa, through Mr Richard Lord QC, seek to uphold the judge's view that the Almeria judgment was a judgment to which the regulation applied, and argue that there was no basis for holding that such a judgment was not binding in England, whatever the nature of the proceedings. NNC by a respondents' notice seek to argue that the Almeria judgment, at least in so far as it ruled on the incorporation of the arbitration clause, was excluded from recognition under the regulation, and otherwise to uphold the judge.
The facts and procedural history in more detail
The facts and much of the procedural history are set out fully in the judge's judgment. It is possible to summarise them as follows:-
i) NNC are the owners of a vessel “Wadi Sudr”. Endesa maintain they have a claim to damages as consignees of a bill of lading for discharge of a cargo of coal at a port way short of the contractual port of discharge. On the morning of 23 rd January 2008, Endesa made an application to the Almeria Mercantile Court in Spain (the Almeria Court) for the arrest of the “Wadi Sudr” in order to secure its claims under the bill of lading.
ii) On the afternoon of 23 rd January 2008, NNC commenced an action (folio 64) in the Commercial Court in London (the Commercial Court action) by which it sought a declaration of non-liability under the bill of lading and asserted that by the terms of the bill of lading jurisdiction was agreed to be London. It made no assertion that there was an arbitration clause contained in that contract. At this stage NNC had no copy of any voyage charter referred to in the bill of lading.
iii) On 22 nd February 2008, Endesa served its substantive claim in the Almeria Court.
iv) On 19 th March 2008, NNC lodged submissions with the Almeria court challenging its jurisdiction relying on the fact that the Commercial Court action had been commenced in London but also “petitioning” the court “on the grounds the court does not have jurisdiction because the question is subject to arbitration in London.”
v) On 30 th April 2008 Endesa responded to NNC's submissions in the Almeria court asserting (a) that NNC had not disclosed a charter party incorporated into the bill of lading which incorporated an arbitration clause;(b) that because NNC and Endesa were not direct parties under the charter party containing the London arbitration clause under Spanish law there was no binding arbitration clause; (c) NNC had waived any right to rely on the arbitration clause by commencing the Commercial Court action; and (d) the Almeria Court was the court first seised.
vi) On 14 th April 2008 Endesa acknowledged service of the Commercial Court action and gave notice disputing jurisdiction.
vii) On 2 nd June 2008 NNC applied to the Almeria court for a stay of its proceedings on the grounds that the Commercial Court was the court first seised by virtue of the Commercial Court action.
viii) On 10th June 2008 NNC commenced proceedings in London in order to obtain copies of the voyage charter. This application was supported by a witness statement of Mr Askins acting for NNC giving notice that NNC intended to apply to amend the claim form in the Commercial Court action to seek declarations that the London arbitration clause contained in the voyage charter was binding on Endesa. This statement demonstrated that his knowledge that the charter party contained such a clause was provided to him by a Mr Alegre prior to Endesa's arrest of the vessel in January 2008 i.e. prior to the commencement of the Commercial Court action.
ix) On 3 rd July 2008 NNC commenced arbitration in London against Endesa under the bill of lading provisionally appointing Michael Baker-Harber as its arbitrator.
x) On 8 th July 2008 NNC commenced the Arbitration proceedings in the Commercial Court in London seeking various forms of relief: (i) disclosure of the voyage charter;(ii) a declaration that the arbitration clause in the voyage charter was validly incorporated into the bill of lading; (iii) an injunction to restrain Endesa proceeding with claims under the bill of lading other than by way of London arbitration. These claims were made “in the alternative to the relief claimed in the Commercial Court action”.
xi) On 15 th July 2008 Flaux J granted permission to serve the Arbitration proceedings out of the jurisdiction and ultimately on 31 st July allowed that service to be made on Thomas Cooper, solicitors for Endesa, and he abridged time limits.
xii) On 7 th August 2008 the Commercial Court in London listed the applications in the Commercial Court action for hearing on 29 th October 2008. On 8 th September 2008 the Almeria court handed down a judgment. A belated attempt had been made by NNC to seek an anti-suit injunction before the handing down but the Commercial Court in London was not prepared to list the matter until 29 th October 2008 with the applications in the Commercial Court action.
xiii) The Almeria court ruled in essence (a) that under Spanish law the arbitration clause in the voyage charter had not been incorporated into the bill of lading; and (b) that by commencing the Commercial Court action NNC had waived reliance on any...
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