National Navigation Company v Endesa Generacion SA
| Jurisdiction | England & Wales |
| Judge | Waller,Carnwath,Moore-Bick L JJ |
| Judgment Date | 17 December 2009 |
| Court | Court of Appeal (Civil Division) |
| Date | 17 December 2009 |
Court of Appeal (Civil Division).
Waller, Carnwath and Moore-Bick L JJ.
Vasanti Selvaratnam QC and Tom Whitehead (instructed by Ince & Co) for the respondent.
Richard Lord QC and Richard Blakeley (instructed by Thomas Cooper) for the appellant.
The following cases were referred to in the judgments:
Allianz SpA v West Tankers Inc (The Front Comor)ECAS (Case C-185/07) [2009] 1 CLC 96; [2009] ECR I-663.
Bamberski v KrombachECAS (Case C-7/98) [2000] ECR I-1935.
CMA CGM SA v Hyundai Mipo Dockyard Co LtdUNK [2008] EWHC 2791 (Comm); [2008] 2 CLC 687.
Hoffmann v KriegECAS (Case 145/86) [1988] ECR 654.
Marc Rich & Co AG v Societa Italiana Impianti SpAECAS (Case C-190/89) [1991] ECR I-3855.
Philip Alexander Securities & Futures Ltd v Bamberger [1996] CLC 1757; [1997] IL Pr 73.
Sennar, The (No. 2)WLR [1985] 1 WLR 490.
Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co Ltd (The Hari Bhum)UNK [2004] EWCA Civ 1598; [2004] 2 CLC 1189.
Tracomin SA v Sudan Oil Seeds LtdUNK [1983] 1 Ll Rep 560; [1983] 1 WLR 1026 (CA).
Van den Boogaard v LaumenECAS (Case C-220/95) [1997] ECR I-1147; [1997] QB 759.
Van Uden Maritime BV v Kommanditgesellschaft in firma Deco-LineECAS (Case C-391/95) [1998] ECR I-7091; [1999] QB 1225.
Arbitration — Recognition of judgments — Issue estoppel — Consignee applied in Spain to arrest vessel and claimed damages for late delivery of cargo — Shipowner brought proceedings in England and sought stay in Spain on grounds that English court first seised and bill of lading incorporated charterparty arbitration clause — Spanish court ruled that no arbitration clause incorporated and refused to decline jurisdiction on that ground — Shipowner commenced arbitration and arbitration proceedings for declaration that arbitration clause incorporated and anti-suit injunction — Spanish court judgments within Judgments Regulation Judgment in member state in proceedings within Regulation on incorporation of arbitration clause would be Regulation judgment — Regulation judgment could give rise to issue estoppel in arbitration proceedings excluded from Regulation — Argument On Public Policy Grounds Precluded — Arbitration Proceedings Dismissed — Council Regulation 44/2001, Art. 1(2)(d), 33 — Civil Jurisdiction And Judgments Act 1982, S. 32.
This was an appeal against a decision ([2009] 1 CLC 393) that a Spanish judgment was a judgment within Council Regulation 44/2001 but not binding in arbitration proceedings in London on the basis that those proceedings were not covered by the regulation being excluded by art. 1(2)(d).
The appellant, Endesa, as consignee of a bill of lading, made an application in the Mercantile Court of Almeria in Spain in order to arrest a vessel in respect of a claim for damages for late delivery of a cargo of coal which was discharged some way short of the contractual port of discharge. The respondent shipowner, NNC, commenced proceedings in the Commercial Court in London claiming a declaration of non-liability. NNC sought a stay of the Spanish proceedings on grounds that the bill of lading incorporated the charter party arbitration clause, alternatively that the English court was first seised. The Almeria court ruled that no arbitration clause was incorporated into the contract and 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 in London, and also arbitration proceedings seeking a declaration that the arbitration clause was as a matter of English law incorporated into the bill of lading and an anti-suit injunction to prevent Endesa pursuing any claim other than by way of arbitration. Endesa asserted that the judgment of the Almeria court was binding on the English court under art. 33 of Regulation 44/2001 so as to preclude the English court from deciding that question a different way.
The judge held that the Almeria judgment was a Regulation judgment, but that it was not binding in proceedings which were themselves excluded from the Regulation, as she held the arbitration proceedings were by virtue of art. 1(2)(d). Endesa appealed.
Held, allowing the appeal and dismissing the arbitration proceedings:
1. A judgment which was not on the merits but ruled that an arbitration clause had not been incorporated and that jurisdiction should not be declined for that reason was a judgment which had to be recognised and enforced under Chapter III of the Regulation. It was the subject matter of the proceedings which dictated whether the proceedings were within the Regulation or not. A preliminary issue in such proceedings did not change the nature of the proceedings. A judgment on a preliminary issue in proceedings within the Regulation would be a judgment within the Regulation, even if, when looked at in isolation, the subject of the preliminary issue fell within the ambit of arbitration. (Marc Rich & Co AG v Societa Italiana Impianti SpAECAS (Case C-190/89) [1991] ECR I-3855 and Allianz SpA v West Tankers IncECAS (The Front Comor) (Case C-185/07) [2009] 1 CLC 96; [2009] ECR I-663applied.)
2. The judge was wrong to hold that, because the arbitration proceedings fell outside the Regulation, a Regulation judgment would not be binding in those proceedings. A Regulation judgment could give rise to an issue estoppel as much in arbitration proceedings excluded from the Regulation as in any other proceedings in an English court. (Through Transport Mutual Insurance Association (Eurasia) Ltd v New India Assurance Co LtdUNK[2004] EWCA Civ 1598; [2004] 2 CLC 1189considered.)
3. If Endesa was entitled to challenge the incorporation of the arbitration clause into the bill of lading in the Almeria Mercantile Court and if the English court was bound to recognise the decision of the Almeria court, there was simply no room for any argument that in some way public policy was being infringed. The English court in such circumstances was bound by the decision that no arbitration clause was incorporated into the bill of lading and that precluded any re-examination of that question and any argument on the grounds of public policy.
Waller LJ:
1. 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.
2. 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.
3. Gloster J ruled by a judgment handed down on 1 April 2009 ([2009] 1 CLC 393) 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.
4. 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.
5. 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.
6. 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 ComorECAS (Case C-185/07) [2009] 1 CLC 96; [2009] ECR I-663. 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...
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