Navig8 Pte Ltd v Al-riyadh Company for Vegetable Oil Industry

JurisdictionEngland & Wales
JudgeMr Justice Andrew Smith
Judgment Date22 February 2013
Neutral Citation[2013] EWHC 328 (Comm)
CourtQueen's Bench Division (Commercial Court)
Docket NumberCase No: 2012651
Date22 February 2013

[2013] EWHC 328 (COMM)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice Andrew Smith

Case No: 2012651

Between
Navig8 Pte Ltd
Claimant
and
Al-riyadh Co For Vegetable Oil Industry
Defendant

Luke Pearce (instructed by Holman Fenwick Willan LLP) for the Applicant Defendant

Michael Collett (instructed by Jackson Parton) for the Respondent Claimant

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.

Mr Justice Andrew Smith
1

This is an application by the defendant, a Jordanian company, to whom I refer as "Al-Riyadh", to challenge the jurisdiction of the court over these proceedings brought by the claimant, a Singaporean company, whom I call "Navig8". Navig8 served them in Jordan, having been permitted to do so by Hamblen J on 9 May 2012. Al-Riyadh contend that the court does not have jurisdiction to hear Navig8's claims and should not exercise it even if it has.

2

The dispute concerns a shipment on the "Lucky Lady" of palm oil and palm olein from Malaysia to Jordan between 19 December 2011 and 22 January 2012, which was apparently delivered in poor condition and was rejected by Al-Riyadh. There is a question whether the complaint is attributable to its condition on shipment or its handling thereafter. Al-Riyadh bought the cargo from the shippers, Pacific Inter-Link SDN BHD ("PIL"), a Malaysian company. The owners of the ship were Ladies Shipping Ltd ("LSL"), a Maltese company, who had time chartered her to Navig8, who in turn sub-chartered her to PIL on a Shelltime 4 form dated 7 March 2008. The sub-charter was governed by English law because of an express provision in clause 21 ("This contract is governed by English law …") and because it incorporated clause 41(A) of the Shelltime 4 form, providing that "This charter shall be construed and relations between the parties determined in accordance with the laws of England". It also provided for arbitration in London under the rules of the London Maritime Arbitrators Association.

3

The cargo was carried under five bills of lading, each of which incorporated the terms of the sub-charter by providing that, "This shipment is carried under and pursuant to the terms of the charter dated 7 March 2008 at Kuala Lumpur between [Navig8] as Owners and [PIL] as charterers, and all conditions liberties and exceptions whatsoever of the said Charter apply to and govern the rights of the party concerned in this shipment …". They also provided (in what I shall call an "exclusion provision") that,

"It is understood and agreed that, other than the said shipowner or demise charterer, no person, firm or corporation or other legal entity whatsoever, is or shall be deemed to be liable with respect to the shipment as carrier, bailee or otherwise in contract or in tort. If, however, it shall be adjudged that any other than said shipowner or demise charterer is carrier or bailee of the said shipment or under any responsibility with respect thereof, all limitations of or exonerations from liability and/or defences provided by law or by the terms of the contract of carriage shall be available to such other".

On or about 2 February 2012 Al-Riyadh issued proceedings for damages before the Aqaba Court of First Instance in Jordan against PIL (as sellers of the cargo) and Navig8 (as carriers under the bills of lading). The basis of the contention that Navig8 are carriers is that the bills do not refer to LSL, but provide that "This shipment is carried under and pursuant to the terms of the Charter dated 07 thMARCH 2008 AT KUALA KUMPAR Between [Navig8] SINGPAPORE as Owners and [PIL] as Charterers …. The contract of carriage evidenced by this Bill of Lading is between the shipper, consignee and/or owner of the cargo and the owner or demise charterer of the Vessel named herein to carry the cargo described above" (emphasis added); and Al-Riyadh argue that because of the underlined words the Jordanian court is likely to interpret the bills as evidencing contracts with Navig8 as carriers.

4

At about the same time as they brought the Jordanian proceedings, Al-Riyadh arrested the vessel and obtained security for claims against LSL, but they did not bring proceedings against them. Al-Riyadh contend that, as a matter of Jordanian private international law, the Jordanian court has jurisdiction over their claims against PIL and Navig8 because they concern a shipment to a Jordanian port: Jordanian law has enacted article 21.1(c) of the United Nations Convention on the Carriage of Goods by Sea, 1978 (the "Hamburg Rules"), which provide that:

"In judicial proceedings relating to carriage of goods under this Convention the plaintiff, at his option, may institute an action in a court which according to the law of the State where the court is situated, is competent and within the jurisdiction of which is situated one of the following places…

(c) the port of loading or the port of discharge…";

The Jordanian Maritime Commerce Act no 12 of 1972 provides that, notwithstanding any provision of any other law, any clause or agreement which purports to make the Jordanian courts incompetent to judge disputes emanating from bills of lading or carriage by sea shall be void. It was common ground before me that as a matter of Jordanian private international law the lex causae of Al-Riyadh's claim against Navig8 is Jordanian. Further, although Navig8 plead in these proceedings that Al-Riyadh's claim in the Jordanian action is "hopeless" (and, as I shall explain, Mr Michael Collett, who represented Navig8, made submissions about difficulties facing the claim), it was also not in dispute that under Jordanian law Al-Riyadh's claims have a real prospect of success, including their contention that Navig8 are carriers under the bills of lading contracts. Indeed, according to a witness statement dated 14 September 2012 of Mr Nicholas Parton of Jackson Parton, Navig8's solicitor, their Jordanian lawyer considers that because the Jordanian court will apply Jordanian law this "could well lead to a different conclusion on the liability of Navig8 from that which would be reached under English law" (meaning, presumably, that the claim in Jordan could well succeed).

5

These proceedings were issued on 10 May 2012; the day after Hamblen J had given permission for service out of the jurisdiction. At the same hearing on 9 May 2012 he had refused an application for an anti-suit injunction, which had been sought on two bases. First, it was argued that the bills of lading contracts incorporated from the sub-charter the agreement for London arbitration. This (hopeless) contention was rejected because general words of incorporation such as those in the bills do not cover an arbitration agreement, and no attempt has been made to resurrect it in these proceedings. The other argument was that the Jordanian proceedings were in any event (as Mr Parton put it) "vexatious, oppressive and designed to bully [Navig8] into paying a claim without being able to defend themselves in a fair and appropriate manner". The argument did not succeed before Hamblen J, but Mr Collett submitted before me that the prosecution of the Jordanian proceedings is indeed vexatious and oppressive.

6

The claim form set out both substantive relief and procedural orders sought by Navig8: (i) an anti-suit injunction; (ii) permission to serve the claim form out of the jurisdiction; (iii) permission to serve the claim form by an alternative method; (iv) "damages generally, including, but not limited to, damages for breach of the jurisdiction agreement"; and (v) a "declaration that the Claimant is not a party to the contracts of carriage evidenced by the five bills of lading …". However, the focus of the application to serve proceedings out of the jurisdiction was wholly on the claim for an injunction: the claims for damages and a declaration were not even mentioned in Mr Parton's witness statement in support of it. I have no information about what Hamblen J was told about these other claims, except that he saw a draft claim form. (Mr Collett did not appear on the applications: they were made by a solicitor, not counsel.)

7

On 6 June 2012 Al-Riyadh filed an acknowledgment of service indicating their intention to contest jurisdiction. On 19 June 2012 Navig8 served particulars of claim, and the prayer was for this relief:

i) declarations that (Navig8 are not party to the contracts contained in or evidenced by the bills of lading, (iNavig8 were not at any material time bailees of or in possession of the cargo to which they relate, and (iiNavig8 are under no liability to Al-Riyadh in respect of the cargo;

ii) a final injunction restraining Al-Riyadh from maintaining any proceedings in the courts of Jordan against Navig8 or commencing any proceedings in respect of the cargo to which the bills of lading relate otherwise than in England;

iii) "equitable damages" on the basis that Navig8 had suffered loss and damage because Al-Riyadh had commenced and continued the Jordanian proceedings;

iv) interest under section 35A of the Senior Courts Act 1981 or in the inherent jurisdiction of the court;

v) further or other relief; and

vi) costs.

Thus, the prayer includes claims for declarations that were not in the claim form and for which, it seems and as I conclude, permission to serve proceedings out of the jurisdiction had not been sought or granted.

8

On 27 July 2012 Al-Riyadh brought the application challenging the jurisdiction of this court. It was supported by a witness statement of Ms Alice Marques, a solicitor with Holman, Fenwick Willan LLP, Al-Riyadh's solicitors. On 14 September 2012, Mr Parton made his further witness statement in response to Ms Marques' and in support of...

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