Seismic Shipping Inc. v Total E & P Uk Plc (The Western Regent)
| Jurisdiction | England & Wales |
| Judge | Clarke,Rix L JJ,Sir Martin Nourse |
| Judgment Date | 29 July 2005 |
| Court | Court of Appeal (Civil Division) |
| Date | 29 July 2005 |
Court of Appeal (Civil Division).
Clarke and Rix L JJ and Sir Martin Nourse.
Nigel Meeson QC (instructed by Holman Fenwick & Willan) for the claimants.
Nigel Teare QC and Nigel Jacobs (instructed by Ince & Co) for the defendant.
The following cases were referred to in the judgments:
Akai Pty Ltd v People's Insurance Co Ltd [1997] CLC 1508.
Blue Nile Shipping Co Ltd v Iguana Shipping & Finance Inc (The Happy Fellow) [1997] CLC 1391.
Bristow Helicopters Ltd v Sikorsky Aircraft CorpUNK [2004] EWHC 401 (Comm).
Caltex Singapore Pte Ltd v BP Shipping LtdUNK [1996] 1 Ll Rep 286.
Carron Iron Co Proprietors v MaclarenENR (1855) 5 HLC 416.
Caspian Basin Specialised Emergency Salvage Administration v Bouygues Offshore SA [1997] CLC 1463.
DSV Silo und Verwaltungsgesellschaft mbH v Owners of the Sennar (The Sennar) (No. 2)WLR [1985] 1 WLR 490.
Harding v WealandsUNK [2004] EWCA Civ 1735; [2005] 1 WLR 1539.
Herceg Novi v Ming Galaxy [1998] CLC 1487.
ICL Vikraman, TheUNK [2003] EWHC 2320 (Comm).
Mackinnon v Donaldson, Lufkin and Jenrette Securities CorpELR [1986] Ch 482.
Messier-Dowty Ltd v Sabena SA [2000] CLC 889; [2000] 1 WLR 2040.
Royal Bank of Canada v Co-operatieve Centrale Raiffeisen-Boerenleenbank [2004] 1 CLC 170.
Sherbro, The (20 December 1996, Dutch Supreme Court).
Sylt, The (28 February 1992, Dutch Supreme Court).
Tatry v Maciej RatajECAS (Case C-406/92) [1995] CLC 275.
Turner v Grovit [2002] CLC 463; [2002] 1 WLR 107.
Turner v GrovitECAS (Case C-159/02) [2004] 1 CLC 864; [2005] 1 AC 101.
Vessel SA v CP Ships (UK) Ltd (The Denise) (unreported, 3 December 2004, David Steel J).
Shipping — Limitation of liability — Anti-suit injunction — Claimants' seismic survey vessel damaged defendant's well-head installation — Claimant owners admitted liability and sought limitation decree against English registered defendant — Defendant brought proceedings for damages in Texas — Convention permitted shipowner to make pre-emptive limitation application in England — Constitution of limitation fund not pre-condition to bringing limitation claim — Continuation of proceedings in Texas not unconscionable despite limitation decree — As a matter of comity it was for Texas court to decide effect of limitation decree — Anti-suit injunction refused — Merchant Shipping Act 1995, Sch. 7 — Convention on Limitation of Liability for Maritime Claims 1976, art. 10, 11 — Supreme Court Act 1981, s. 20 — Civil Procedure Rules 1998, r. 61.11.
This was an appeal by the defendant (Total) from the judgment of Julian Flaux QC [2005] EWHC 460(Comm) granting a limitation decree in favour of the claimant shipowners, and an appeal by the claimants from the judge's refusal to grant an injunction to prevent Total pursuing liability proceedings against the shipowners in Texas.
The claimants' seismic survey vessel damaged a well-head installation belonging to Total in the North Sea. The claimants admitted liability and brought an action in order to obtain a decree limiting their liability under the Merchant Shipping Act 1995. Only Total had a claim arising out of the collision. The claim form was served on Total as an English registered company.
The deputy judge granted the limitation decree sought. In the same order he refused the owners' application for an injunction restraining Total from continuing liability proceedings which it had begun against the owners in Texas.
Total submitted that the court had no subject matter jurisdiction because the only circumstances in which a party in the position of a shipowner or demise charterer (such as the claimants) could launch limitation proceedings was when underlying legal proceedings or arbitration proceedings had been instituted in the jurisdiction. Total relied on art. 11 of the Convention for Limitation of Liability for Maritime Claims 1976 as set out in Sch. 7 to the 1995 Act, on the basis that the Convention conferred jurisdiction to commence a limitation claim only in circumstances where the claimant could constitute a limitation fund under art. 11.1, which contemplated the setting up of a fund only in a state in which legal proceedings had been instituted in respect of the claim which was the subject of limitation. The owners relied on art. 10.1 the first sentence of which provided that limitation could be invoked notwithstanding that a limitation fund had not been constituted under art. 11 and on the second sentence which permitted a state party to provide in its national law that where an action was brought in its courts to enforce a claim subject to limitation, a person liable could only invoke the right to limit liability if a limitation fund had been constituted. The UK had not introduced such a provision and had accordingly not included the second sentence from art. 10.1 in Sch. 7 to the 1995 Act.
The owners submitted to the judge that, having granted a limitation decree, proceedings in Texas designed to obtain judgment for more than the limited amount decreed was unconscionable and he should grant an injunction to restrain the further conduct of those proceedings.
Held, dismissing the appeals:
1. There was no general jurisdiction provision in the Convention stating where the right of limitation had to be invoked. It appeared that in principle the Convention permitted a party to seek to limit its liability in any contracting state which had personal jurisdiction over the defendant. Since there was no express restriction in the Convention restricting the invocation of the right to limit in any way, if there was such a restriction it had to be implied in the Convention, and there was nothing in the Convention to lead to the implication of such a restriction. Neither art. 10 nor art. 11 contains such a restriction, either expressly or by necessary implication. Article 10 contained a clear statement that limitation of liability could be invoked notwithstanding that a limitation fund had not been constituted. It thus appeared on the face of the Convention that the shipowners' right to limit was stated in art. 1.1 and that, by art. 10.1, the right to invoke that right to limit did not depend upon the constitution of a limitation fund. That was entirely unsurprising because there might only be one claim arising out of a particular casualty. The second sentence of art. 10.1 indicated that where a state had not introduced such a provision limitation could be invoked even where an action had not been brought by a claimant to enforce a claim subject to limitation. The second sentence of art. 10.1 was entirely consistent with the express provision in the first sentence that the limitation could be invoked without the constitution of a fund and with the conclusion that a limitation action could be brought in such a case in the absence of an action to enforce a claim subject to limitation. Article 11 simply conferred a right on a person invoking limitation to constitute the fund if he wished. It did not require him to do so. The right to invoke limitation where no fund had been constituted was expressly conferred by art. 10.1 without any limitation or restriction and, by art. 10.3, questions of procedure were to be decided by the lex fori. Section 20 of the Supreme Court Act 1981 and CPR, r. 61.11 permitted a limitation action to be brought and served on a person within the jurisdiction in such a case. Neither the constitution of a limitation fund nor the ability to constitute a fund was a pre-condition to either the jurisdiction itself or the grant of a limitation decree. (Vessel SA v CP Ships (UK) Ltd (The Denise)UNKunreported, 3 December 2004, approved.)
2. The essential touchstone where the court was asked to grant an anti-suit injunction was whether there had been unconscionable conduct or the threat of unconscionable conduct. This was not a case in which, in commencing or continuing proceedings in Texas, Total was in breach of contract. The question was simply whether, in continuing to proceed in Texas after the English court had granted a decree limiting the owners' liability to it under a Convention which had the force of law in England, Total was acting unconscionably so that the Texas proceedings are vexatious and oppressive. The purpose of an injunction was not to ensure that an English judgment was recognised by a friendly foreign state but to prevent unconscionable conduct. As a matter of comity the English court should leave the Texas court to consider what steps to take in the light of the decree and whether or not to recognise and enforce it. In the circumstances it was not possible to say that liability proceedings in the US were unconscionable. The limitation decree did not qualify Total's substantive right to damages in Texas, so that it was not unconscionable for Total to proceed in Texas. Even assuming that in England Total could not enforce a judgment obtained against the owners in Texas for a larger amount than the amount of the decree, it did not follow that the court should restrain Total from proceeding against the owners in Texas. The judge was right to refuse an anti-suit injunction. (Royal Bank of Canada v Centrale Raiffeisen-Boerenleenbank[2004] 1 CLC 170applied.)
Clarke LJ:
1. On 2 October 2004, a purpose built seismic survey vessel called the WESTERN REGENT (“the vessel”) was operating in the North Sea towing six streamers each 3,600 metres long and with 100 metres separation between them. At about 0130 hours on that day two of the streamers came into contact with a marker buoy which was positioned at a well head in the Total Dunbar oilfield, located about 70 miles east of the Shetlands in the Scottish sector of the North Sea oilfields. As a result it is said that the buoy was dragged from its position and that the well head installation was damaged.
2. In this action the first and second claimants are the owners and demise...
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