OT Africa Line Ltd v Magic Sportswear Corporation
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Langley |
| Judgment Date | 03 November 2004 |
| Neutral Citation | [2004] EWHC 2441 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 03 November 2004 |
| Docket Number | Case No: 2003 FOLIO 785 |
[2004] EWHC 2441 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon. Mr Justice Langley
Case No: 2003 FOLIO 785
Mr J. Collins (instructed by Stephenson Harwood) for the Claimant
Mr M. McParland (instructed by Clyde & Co) for the Defendants
Hearing date: 20 th October 2004
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:
Introduction
These proceedings concern a principal sum of 30,000 Canadian dollars. They have given rise to a scale of litigation out of all proportion to the sum concerned. There are parallel actions in Canada and in this court. The litigation shows few signs of abating. The present applications involve jurisdiction issues. The real issues are for trial, if they are ever tried, another day or days at an uncertain future date. The question for this court, which is a question which has already been addressed at first instance and on appeal in the courts of Canada, is essentially whether such a trial should take place in Canada or the courts of this country or, indeed, however regrettably, both. The issues raised are, nonetheless, to my mind, both difficult and important. They raise matters of real principle. Whilst the attractive vista of such legal disputes should not cause the parties or the court to lose sight of the fact that commercial disputes are, at least usually, about money and the need, when the legal costs come to dominate the sums involved, to be alert to finding a way to limit those costs, the plain fact is that these parties do consider the issues to be of such general importance that the underlying dispute has become of relative insignificance. It is also the principled concern of the court that the conflicts of jurisdiction apparent require the court to proceed with due caution and of course proper regard and respect for the courts of Canada and Canadian law.
The Dispute
The dispute arises out of an alleged short delivery of goods carried by the Claimant in this court ("OTAL") from New York to Monrovia. OTAL is an English company. It also has offices in Toronto. The First and Second Defendants in this court ("Magic" and "Blue Banana") are the cargo interests. Magic was the shipper. It is a Delaware Corporation which had business interests in New York. Blue Banana was the receiver. It is a Liberian Corporation. The evidence suggests that both Magic and Blue Banana are, and were prior to the issue of the Canadian proceedings referred to below, dormant. In March 2002 Magic and Blue Banana claimed short delivery following the arrival of the goods in Monrovia. OTAL contends that the goods were fully delivered to Blue Banana. The Third to Fifth Defendants in this court (to whom I will refer as "the insurers") were the insurers of the cargo or (in the case of the Fifth Defendant) agents for insurers. They are all Toronto-based Canadian companies.
CHRONOLOGY
The Bill of Lading
The goods were loaded on board the Mathilde Maersk on 5 February 2002 and transhipped at Le Havre on the Suzanne Delmas on 21 February. OTAL issued a bill of lading on 5 February. The bill of lading was issued at Toronto where the ocean freight was payable.
Clauses 24 and 25 of the Conditions on the reverse of the bill of lading provided:
"24. USA/CANADA CLAUSE
If the Bill of Lading covers the transportation of the goods to or from ports of the United States of America or Canada this Bill of Lading shall be subject to United States Carriage of Goods by Sea Act 1936 and/or subject to Carriage of Goods by Water Act 1936 of Canada which shall be incorporated herein and the provisions of said act shall govern before loading and after discharge and throughout the entire time the goods are in the custody of the Carrier. If anything herein contained to be invalid or unenforceable under the provisions of said act such circumstances shall not affect the validity or enforceability of any other part or term of this Bill of Lading. The Carrier shall not be liable in any capacity whatsoever for loss, damage or delay of goods while the goods are not in his actual custody.
25. LAW AND JURISDICTION
(1) Any claim or dispute whatsoever arising in connection with the carriage under the Bill of Lading shall exclusively be governed by English law and determined by the High Court of London.
(2) In the event that anything herein contained is inconsistent with any applicable international convention or national law which cannot be departed for private contract, the provisions hereof shall to the extent of such inconsistency but no further be null and void."
The Canadian Proceedings
On 1 August 2003 Magic and Blue Banana commenced proceedings before the Federal Court Trial Division in Toronto. The evidence shows that the proceedings were in fact instigated by the insurers exercising rights of subrogation. The claim was for $30,000.
Section 46
The basis on which the insurers invoked the jurisdiction of the Canadian Court, despite clause 25 of the Conditions of the bill of lading, was Section 46(1) of the Canadian Maritime Liability Act 2001 which provides:
"46(1) If a contract for the carriage of goods by water to which the Hamburg Rules do not apply provides for the adjudication or arbitration of claims arising under the contract in a place other than Canada, a claimant may institute judicial or arbitral proceedings in a court or arbitral tribunal in Canada that would be competent to determine the claim if the contract had referred the claim to Canada where:
(a) the actual port of loading or discharge under the contract, is in Canada;
(b) the person against whom the claim is made resides or has a place of business, branch or agency in Canada; or
(c) the contract was made in Canada."
Sub-sections (b) and (c) applied because OTAL had a place of business, branch or agency in Canada and the bill of lading was issued in Toronto.
The court has been provided with a number of public statements about the rationale for the enactment of Section 46. They range from providing Canadian importers and exporters with a right to pursue cargo claims in Canada (which has no relevance to the present dispute) to an unashamed attack on what was perceived to be a monopoly of the British courts over such claims. The intentions of the parties, expressed in their contract, is not wholly overridden both because the Canadian Court retains a discretion to refuse jurisdiction on grounds of forum non conveniens and because a choice of law, as distinct from choice of jurisdiction, clause remains effective.
The English Proceedings
On 2 September 2003 OTAL issued proceedings in this court against Magic and Blue Banana. OTAL claimed a declaration that the cargo shortage claim was false and an anti-suit injunction and damages relying on clause 25 of the Conditions to the bill of lading.
OTAL sought permission to serve the proceedings out of this jurisdiction and an interim anti-suit injunction. Permission to serve out was sought under CPR 6.20(5)(c) and (d) relying on clause 25.
The Anti-Suit Injunction
On 8 September Gross J granted permission to serve out and an anti-suit injunction in respect of the Canadian proceedings. On 28 October Magic and Blue Banana (again at the instigation of the insurers) filed an Acknowledgement of Service indicating an intention to contest the jurisdiction. However, no jurisdiction application was made thereafter and so, in accordance with CPR 11(5), both Magic and Blue Banana are to be treated as having accepted that this court has jurisdiction to try OTAL's claims against them.
The Decisions in Canada
Notwithstanding the anti-suit injunction the Canadian proceedings have continued. OTAL, also on 8 September, filed a challenge to the jurisdiction of the Canadian court. Judgment on that challenge was given on 22 December. The challenge was rejected. In the course of her judgment, Madam Prothonotary Milczynski, found that the conditions of Section 46 were satisfied, that the Act "clearly removes the determining or binding effect of a forum selection clause in a bill of lading" and that Canada was the appropriate forum for the trial of the claim. The last of these findings was addressed in paragraph 18 of the judgment as follows:
"In this case, taking into account all of the facts and surrounding circumstances relating to the shipment of goods from New York to Monrovia, including the value of the goods, the fact that the true Plaintiffs are in Canada, the Defendants have business interests in Canada, and most particularly the fact that most if not all of the material witnesses will come from Monrovia and/or New York, (which factor favours neither England nor Canada), I find that the most convenient and appropriate forum for the determination of the Plaintiff's claim, including the interpretation and application of English law, is this Court."
OTAL appealed this decision to the Federal Court Judge. The appeal was heard in February 2004. It was dismissed on 23 August by Mr Justice John A. O'Keefe. It was held that the Prothonotary's analysis of the issues was "not clearly wrong nor did she exercise her discretion based upon a wrong principle or upon a misapprehension of the facts". OTAL has now lodged a further appeal against this decision to the Canadian Federal Court of Appeal. The Appeal has not yet been scheduled for a hearing.
Joinder of the Insurers
No further steps were taken in the proceedings in this court...
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