Saipem S.p.A. v Dredging VO2 B.v (Volvox Hollandia)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE KERR,LORD JUSTICE DILLON,LORD JUSTICE NICHOLLS
Judgment Date25 May 1988
Judgment citation (vLex)[1988] EWCA Civ J0525-5
Docket Number88/0469 1986 C No. 15257
Date25 May 1988

[1988] EWCA Civ J0525-5

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

(MR. JUSTICE STAUGHTON

Royal Courts of Justice

Before:

Lord Justice Kerr

Lord Justice Dillon

and

Lord Justice Nicholls

88/0469

1985 S No. 3540

1986 C No. 15257

Between:
Saipem SPA
Plaintiffs (Respondents)
and
(1) Dredging V02 BV
(2) Geosite Surveys Limited
Defendants (Appellants) Defendants
And Between:
Conoco (UK) Limited
Plaintiffs (Respondents)
and
(1) Dredging V02 BV
(2) Geosite Surveys Limited
Defendants (Appellants) Defendants

MR. G. PRICE Q.C. and MRS. ELIZABETH BLACKBURN (instructed by Messrs, Hill, Dickinson Co., Solicitors, London EC3A 7LP) appeared on behalf of the First Defendants (Appellants).

MR.M.N. HOWARD Q.C. and MISS SARAH MILLER (instructed by Messrs Ingleden, Brown, Bennison & Garrett, Solicitors, London EC3A 5AL) appeared on behalf of the Plaintiffs (Respondents).

LORD JUSTICE KERR
1

INTRODUCTION

2

These are appeals by the defendant Dutch shipowners ("V02") against a judgment of Staughton J. (as he then was) reported in (1987) 2 Lloyds Reports 520 under the name of the first of these two actions. Both actions arose out of damage alleged to have been caused in the course of dredging operations by the Dutch-registered "Volvox Hollandia" in March 1984 to a pipeline alleged to be owned by Conoco in the Vector oilfield of the North Sea. Conoco had entered into a head contract with Saipem, an Italian company, to do certain work in this area, arid Saipem had entered into a sub-contract with V02 for part of it. V02, in their turn, had entered into a sub-sub-contract with Geosite, an English company, for the supply of certain "hi-tec" equipment and personnel on board the vessel at the relevant time. The head contract between Conoco and Saipem was governed by English law and provided that "the English Courts will have jurisdiction to entertain any action brought in connection with or arising out of the contract". It was accepted that the sub-contract between Saipem and V02 should be treated as containing an identical provision. The sub-sub-contract between V02 and Geosite provided for ICC arbitration in London. All three contracts also provided that the rights and obligations of the parties under the contracts were to be governed by English law. Further details of the contracts will be found in the report of the judgment at pp.522 and 523. In the same way as the judge I proceed on the assumption that under their contract with Conoco Saipem may have been liable to indemnify Conoco in respect of the damage, and it appears from the judgment that they have done so.

3

After the occurrence the vessel proceeded to Rotterdam, her port of registry, as her first port of call. In March 1985 the shipowners then instituted limitation proceedings in the District Court of Rotterdam, as explained hereafter, pursuant to the "International Convention relating to the limitation of the liability of owners of seagoing ships" concluded in Brussels in 1957 ("the 1957 Convention") to which both Holland and the United Kingdom are parties. The limitation proceedings were also properly brought in Rotterdam pursuant to the provisions of the "Convention on jurisdiction and the enforcement of judgments in civil and commercial matters" concluded in Brussels in 1968 between the original six members of the EEC, as supplemented by the Accession Convention concluded in Luxembourg in 1978 to which the United Kingdom is a party. Hereafter I refer to both of these Conventions compendiously as "the Judgments Convention".

4

After the institution of the Rotterdam proceedings, Saipem, and subsequently Conoco, instituted proceedings in the English courts, claiming damages against the shipowners and Geosite. For this purpose they had to obtain leave ex parte under RSC 0.11 to serve the shipowners in Holland. Saipem relied on the English jurisdiction and English law clauses in their contract with V02 and obtained leave to serve their writ on this basis in December 1985. A year later, in December 1986, Conoco issued a second writ contending that V02 were proper or necessary parties to Conoco's claim against Geosite, who had been served within the jurisdiction, and Conoco thereupon also obtained leave ex parte to serve their writ in Holland. At that time the Judgments Convention was not yet in effect between this country and Holland, since all these events took place before 1st January 1987 when the Civil Jurisdiction and Judgments Act 1982 ("the 1982 Act") came into force. But that Convention was in force between Italy and Holland, two of the original six members of the EEC, and therefore applied to the Rotterdam proceedings as between Saipem and V02. Moreover, by virtue of Article 34(3) of the Accession Convention, which has been incorporated by Schedule 3 to the 1982 Act, it is common ground that since 1st January 1987 any judgment of the English and Dutch courts falling within the scope of the Judgments Convention will be entitled to reciprocal recognition and enforcement in the courts of the other country on a basis of "first come, first served", as explained later on. That is the situation in the present case.

5

Up to this point there is nothing exceptional in the procedural history. It is commonplace for limitation proceedings and liability proceedings to take place separately, and the issues are often very different. In this case the Dutch shipowners were undoubtedly entitled to institute limitation proceedings in Holland, and under 0.11 there was also jurisdiction entitling the plaintiffs to seek to compel the shipowners to defend the liability proceedings in England. But one then comes to an unprecedented additional feature of the writs issued by Saipem and Conoco for service on the shipowners in Holland. This is now the kernel of the problem raised by these appeals. In addition to the claims for damages, both writs also claimed declarations that the shipowners were not entitled to limit their liability in respect of the plaintiffs' claims. As expressed in their Points of Claim, Saipem and Conoco claimed declarations in England that the shipowners "are not entitled to limit their liability and/or that the loss, damage and expense did not occur without the [shipowners'] actual fault or privity".

6

The implications of these claims in the English writs are startling. It is settled law in this country, and under the 1957 Convention as well as the Judgments Convention, that the right of shipowners to claim that their liability is limited is a right which appertains to them and which they and they alone are entitled to invoke by proceedings, as discussed hereafter. Both counsel agreed that claims for declarations of this nature against shipowners are unprecedented, quite apart from their negative or doubly negative formulation. Their purpose was of course to seek to compel the Dutch shipowners to litigate in England, under English law and procedure, the question of their entitlement to limit their liability, notwithstanding that, to the plaintiffs' knowledge, the Dutch shipowners had already previously instituted limitation proceedings in their own forum in Holland pursuant to the 1957 Convention to which this country and Holland are parties and also in accordance with the provisions of the Judgments Convention.

7

In these circumstances I can state my conclusion at the outset. In The Sennar (No.2) (1985) 1 WLR 490 at p.493 E Lord Diplock said that maritime claims are particularly vulnerable to forum shopping of which that case provided a particularly blatant example. He was speaking about the misuse of the power of arrest. I would say precisely the same about the present case as a blatant, misuse of 0.11. Properly viewed, these claims for negative declarations are a novel type of preemptive forum shopping with novel implications. They distort the settled law and practice governing the rights of shipowners to seek to limit their liability. They involve an exorbitant assumption of jurisdiction by the English courts under 0.11 without regard for the implications of two relevant international Conventions. And they involve an attempt at forum shopping in the face of a lis alibi pendens, properly instituted by the defendants in Holland before the English proceedings, so that a race, for judgment in these two jurisdictions would be likely to result. In the upshot, the inclusion of these claims in the plaintiffs' writs for service out of the jurisdiction was improperand should not be allowed to stand.

8

Before discussing the reasons for these conclusions I continue with the history. Leave to serve both writs under 0.11 was granted ex parte on documents in the usual way. In March 1987 the shipowners applied under RSC 0. 12 r.8 for orders that the service of the writs upon them be set aside on the ground that the English courts had no jurisdiction to grant the relief claimed, or alternatively for a stay of all further proceedings in both actions on the ground that the shipowners had already commenced limitation proceedings in Rotterdam, that England was accordingly "a forum non conveniens for the resolution of the dispute", and that it was "more convenient and appropriate for the dispute to be decided in Holland". These summonses came before Staughton J. and were dismissed by him in the judgment from which these appeals now arise. However, as can be seen from the report, the arguments and the judgment concentrated from the outset on the second aspect of these summonses, the issue as to the forum conveniens in respect of all disputes between all the parties, in the light of the application of the principles recently...

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1 books & journal articles
  • Choice of Law in Tort—Blending in with the Landscape of the Conflict of Laws?
    • United Kingdom
    • The Modern Law Review Nbr. 61-1, January 1998
    • 1 Enero 1998
    ...108 LQR 545;A. Bell, ‘The Negative Declaration in Transnational Litigation’ (1995) 111 LQR 674.100 See eg The Volvox Hollandia [1988] 2 Lloyd’s Rep 361; First National Bank of Boston vUnionBank of Switzerland [1990] 1 Lloyd’s Rep 32.101 A. Briggs, n 1 above; A. Reed, n 1 above, 320.102 F. R......

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