Schiffahrtsgesellschaft Detlef Von Appen GmbH v Wiener Allianz Versicherungs AG
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HOBHOUSE,LORD JUSTICE MORRITT,THE VICE-CHANCELLOR |
| Judgment Date | 16 April 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J0416-11 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 96/1509/B |
| Date | 16 April 1997 |
[1997] EWCA Civ J0416-11
The Vice-Chancellor
Mr Justice Hobhouse
and
Mr Justice Morrit
96/1509/B
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR JUSTICE MORISON
Royal Courts of Justice
Strand
London WC2
MISS B BUCKNALL QC and MR R THOMAS (Instructed by Messrs Leboeuf, Lamb, Greene & Macrae, London EC3) appeared on behalf of the Appellant
MR R SIBERRY QC and MR L PARSONS (Instructed by Messrs Holman, Fenwick & Willan, London EC3) appeared on behalf of the Respondent
On 15th December 1994 the Plaintiffs in the action Schiffahrtsgesellschaft Detlef Von Appen GmbH (whom I will call the Timecharterers), obtained the leave of the Commercial Judge Mr Justice Potter, on an ex parte application under RSC O.11 r.1(1), to issue and serve out of the jurisdiction in Austria on Wiener Allianz Versicherungs AG of Vienna (whom I will call the Insurance Company) and Voest Alpine Intertrading GmbH of Linz (whom I will call the Voyage Charterers) a writ which principally claimed an injunction against the continuation of proceedings in Brazil which had been begun in February 1993 by the Insurance Company against the Timecharterers. Austria was not a party to the Brussels Convention and the Lugano Convention did not yet apply.
The matter came back before Mr Justice Morison in May and June of 1996. He had to consider first an application by the Defendants under RSC O.12 r.8 that the leave given by Potter J should be set aside and, if that application failed, secondly, whether a final injunction should be granted. As against the Insurance Company, he upheld the leave and granted an injunction in modified terms. As regards the Voyage Charterers, he set aside the leave. He made no order as to costs. The Insurance Company have appealed to this Court against both the interlocutory order dismissing their application under O. 12 r.8 and the final order granting the injunction against them. The Plaintiffs have served a Respondents' Notice in which they seek to uphold the Judge's orders on broader grounds and as part of which they ask for a costs order to made in their favour here and below. The Judgment of Morison J is reported at [1997] 1 Lloyds 179. (He referred to the parties as respectively DVA, the insurers and Voest.)
The Facts:
The facts which have given rise to this litigation are complex. I will confine my summary to the facts which are directly material to this appeal. In July 1991 various cargoes were loaded on board the vessel Jay Bola at Brazilian ports for carriage to Indonesia and Thailand. Among these cargoes were two consignments of steel reinforcing bars, each of about 5,000 metric tonnes. These consignments were loaded on board at the port of Sao Sebastiao for carriage to Bangkok. Two bills of lading were issued on the Congenbill form and dated Sao Sebastiao 5th July 1991. They were owner's bills, that is to say, they were issued by the local agents on behalf of the owners of the vessel. They named a company called Arby Trading as the shippers and consigned the goods to the order of the Voyage Charterers. The bills of lading stated that they were issued at Sao Sebastiao and were dated 5th July 1991.
The voyage was not a success. On 23rd August, the vessel suffered a serious fire and was abandoned by her crew south of Singapore. She had to be salved on Lloyds Open Form. She was towed into Singapore where the voyage was abandoned on 29th October. Cargo interests had to arrange for the transhipment of the cargoes at their own expense. The two consignments of steel bars were transhipped and on-carried to Bangkok in another vessel and there delivered to two Thai receivers who had earlier bought the consignments on CIF terms from the Voyage Charterers.
Serious losses of between US$1 and 2 million had been suffered by cargo interests which the Insurance Company had to bear. The consignments had been damaged. Transhipment and on-carriage expenses had been incurred. There were general average and salvage charges which had had to be paid. Understandably the Insurance Company had to consider how to recover those losses from any party which could be held responsible for them.
The Jay Bola was registered in the Bahamas and owned by Armstel Shipping Corporation of 100 Broad Street, Monrovia. The shipowners have admitted their liability for the casualty and the abandonment of the voyage subject to limitation. On 4th February 1993 they commenced a limitation action in the Admiralty Court in London seeking a decree of limitation of liability under the UK legislation which gives effect to the London Convention. They have paid the amount of the limit into Court and in October 1993 a decree of limitation was pronounced. Under the Convention this decree limits the liability of the Timecharterers as well as that of the shipowners. The Insurance Company, in the name of the relevant cargo owners, is entitled to a pro rata share of that fund. It has however not yet made any such claim. If it can obtain a judgment in Brazil against the Time Charterers, that judgment will not be subject to the limitation. Brazil is not a party to the London Convention. Hence the interest of the Insurance Company in suing in Brazil.
At the time of the material voyage, the vessel was subject to a timecharter on the New York Produce Exchange form whereby the shipowners chartered the vessel for a timechartered trip to the Timecharterers. The timecharter was expressly governed by English law and contained a London arbitration clause. By a voyage charterparty dated 21st June 1991 on the Gencon form the Timecharterers chartered the vessel to the Voyage Charterers for a part cargo from Sao Sebastiao to Bangkok. It is governed by English law. It contained the usual bill of lading clause. It incorporated a clause paramount and an arbitration clause (clause 33). This read:
"It is mutually agreed that should any dispute arise between owners and charterers, the matter in dispute shall be referred to three persons in London for arbitration, one to appointed by each of the parties hereto and the third by the two so chosen. Their decision or that of any two of them shall be final and for the purpose of enforcing any award, this agreement may be made a rule of the Court. The arbitrators shall be shipping men in daily operation or chartering practice.….."
It is accepted that as between the Voyage Charterers and the Timecharterers this is the governing document. It imposes upon the Voyage Charterers an obligation to refer any dispute they may have with the Timecharterers to arbitration in London. This is the contractual provision upon which the Timecharterers rely in seeking the injunction to restrain the proceedings against them in Brazil. As I have previously stated, at the time of shipment at San Sebastiao shipowners' bills of lading on the Congenbill form were issued. These bills of lading were governed by English law. ( The Njegos [1936] P 90) Under English law, they do not vary the contract between the Timecharterers and the Voyage Charterers; the voyage charterparty is still the contract by which both parties remain bound. ( The Dunelmia [1970] 1 QB 289)
The relevant consignments of steel bars had, through the agency of Arby Trading SA, been bought FOB a Brazilian port by the Voyage Charterers from another company. The Voyage Charterers on-sold the consignments on CIF terms to the two Thai receivers. The Voyage Charterers had an open cover with the Insurance Company. The consignments were declared under that open cover and insurance certificates issued. They were made out to order and provided for claims to be paid in Bangkok.
There was considerable delay in the Thai receivers opening letters of credit in favour of the Voyage Charterers. When opened they were in a form which did not allow the San Sebastiao bills of lading to be tendered under them. Accordingly on about 25th August the Voyage Charterers asked the Timecharterers to issue fresh bills of lading in a form that would comply in substitution for the original bills of lading which would be cancelled. Accordingly new bills of lading were issued in Hamburg and they so stated. They were back-dated to 5th July 1991. They named the Voyage Charterers as the shippers and consigned the goods to the order of the banks which had opened the relevant letters of credit. Otherwise the bills of lading were in the same terms as previously. These were the bills of lading which were then used by the Voyage Charterers to perform their CIF contracts with the Thai receivers.
In early March of the following year the consignments arrived in Bangkok and a meeting took place there between representatives of the receivers, Voyage Charterers and Insurance company. The amount of the payments to be made by the Insurance Company to the receivers was agreed; it was also agreed that the payment should be made to the Voyage Charterers who would forward the relevant sum to each of the receivers. At this meeting each of the receivers signed a declaration in favour of the Insurance Company dated 9th March 1992. They read:
"In consideration of your paying us for a partial loss of the under-mentioned cargo (in virtue of which payment you will become subrogated to all our rights and interests in the cargo and in any monies recoverable in respect thereof on account of general average, salvage or otherwise howsoever), we hereby authorize you to make use of our name for purpose of any proceedings of measures, legal or otherwise which you may think fit to take in respect of the cargo or for the recovery of any...
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