Sennar, The (No. 2) (Merawi)

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Fraser of Tullybelton,Lord Diplock,Lord Roskill,Lord Bridge of Harwich,Lord Brandon of Oakbrook
Judgment Date21 March 1985
Judgment citation (vLex)[1985] UKHL J0321-4

[1985] UKHL J0321-4

HOUSE OF LORDS

Lord Fraser of Tullybelton

Lord Diplock

Lord Roskill

Lord Bridge of Harwich

Lord Brandon of Oakbrook

D.S.V. Silo-und Verwaltungsgesellschaft mbH
(Appellants)
and
Owners of the Ship “Sennar” and 13 Other Ships
(Respondents) (England)
Lord Fraser of Tullybelton

My Lords,

1

I have had the advantage of reading in draft the speeches of my noble and learned friends, Lord Diplock and Lord Brandon of Oakbrook. I agree with them, and for the reasons given by them I would dismiss this appeal.

Lord Diplock

My Lords,

2

The facts that have given rise to this appeal are set out in the speech to be delivered by my noble and learned friend, Lord Brandon of Oakbrook, with whose conclusions and reasons for them I agree. His speech, in which he refers to the three issues that have been argued before this House as Issue 1, Issue 2 and Issue 3, should be read before these few more general comments of my own on Issue 2 which I venture to add because the ability to found jurisidiction in many different countries, by arrest of a ship belonging to proposed defendants which enters their territorial waters, makes maritime claims particularly vulnerable to forum shopping, of which the instant case provides what is, in my view, a particularly blatant example.

3

In English law when a plaintiff, who, basing his claim on a particular set of facts, has already sued the defendant to final judgment in a foreign court of competent jurisdiction and lost, then seeks to enforce a cause of action in an English court against the same defendant based on the same set of facts, the defendant's remedy against such double jeopardy is provided by the doctrine of issue estoppel.

4

It is far too late, at this stage of the development of the doctrine, to question that issue estoppel can be created by the judgment of a foreign court if that court is recognised in English private international law as being a court of competent jurisdiction. Issue estoppel operates regardless of whether or not an English court would regard the reasoning of the foreign judgment as open to criticism. Although in the instant case some 15 days were taken up by oral argument in the courts below, together with voluminous citation of authorities, nevertheless the facts appear to me to present a case which the now well-established doctrine of issue estoppel resulting from a foreign judgment incontestably applies.

5

To make available an issue estoppel to a defendant to an action brought against him in an English court upon a cause of action to which the plaintiff alleges a particular set of facts give rise, the defendant must be able to show: (1) that the same set of acts has previously been relied upon as constituting a cause of action in proceedings brought by that plaintiff against that defendant in a foreign court of competent jurisdiction; and (2) that a final judgment has been given by that foreign court in those proceedings.

6

It is often said that the final judgment of the foreign court must be “on the merits.” The moral overtones which this expression tends to conjure up may make it misleading. What it means in the context of judgments delivered by courts of justice is that the court has held that it has jurisdiction to adjudicate upon an issue raised in the cause of action to which the particular set of facts give rise; and that its judgment on that cause of action is one that cannot be varied, re-opened or set aside by the court that delivered it or any other court of co-ordinate jurisdiction although it may be subject to appeal to a court of higher jurisdiction.

7

My Lords, misdated bills of lading are regrettably not unknown in the commodity markets in which prices are liable to large and rapid changes. What takes the instant case out of the general run of cases where there has been a string of contracts of sale between dealers in the market in the form of GAFTA 100 and it is discovered after the documents have been accepted that a false date of shipment has been inserted in the bill of lading is that a buyer lower in the string returns the documents to his immediate seller and recovers from him the price that he had paid and so on up the string. The shipowner who signed the misdated bill of lading (usually at the request of the shipper) is not normally brought into the proceedings between the parties to the string at all. It was only because the appellants' (whom I refer to hereafter as “the dealers”) immediate seller, Pagco, became insolvent that they decided to bring proceedings against the respondents (“the shipowners”) for damages for fraudulent misrepresentation contained in the bill of lading and consisting of the statement that the Sudanese ground-nut expellers covered by the bill of lading no. 7 were received on board the Sennar on 30 August 1973.

8

The jurisdiction of the Dutch courts was invoked by the dealers by their arrest at Rotterdam of a sister ship of the Sennar. The particular set of facts relied upon by the dealers as constituting a cause of action against the shipowners in the Dutch proceedings was identical with the facts upon which the dealers sought to rely in the English proceedings which the Court of Appeal has ordered to be stayed.

9

At the hearing of the appeal from that stay it was repeatedly urged upon your Lordships that all that the judgment of the Dutch Court of Appeal had done was no more than to hold that it had no jurisdiction over the dealers' claim against the shipowners and so did not fall into the category of a judgment on the merits. But this is to confuse issue estoppel with cause of action estoppel.

10

I ventured in the course of the hearing to summarise in a single sentence what the Dutch Court of Appeal had decided by its judgment of 21 March 1980.

“Upon the particular set of facts on which the dealers relied in the Dutch action their only claim against the shipowners is for breach of the contract of carriage which, as a result of the Sudanese jurisdiction clause that it contains, is enforceable in the courts of the Sudan and nowhere else.”

11

In my view that constitutes a final judgment “on the merits” (as I have interpreted that term) upon two issues: the first is that the dealers have no claim against the shipowners for their wrongful act of inserting a false date upon the bill of lading, other than a claim for breach of the contract of carriage; the second is that the effect of the jurisdiction clause in the contract of carriage is to make any remedy for breach of that contract enforceable only in a Sudanese court unless the shipowners elect otherwise.

12

So much for what has been referred to in this appeal as Issue 2. On Issue 3, discretion, I have nothing to add to what is said by my noble and learned friend, Lord Brandon of Oakbrook. This results in its being unnecessary to decide Issue 1: whether in English law the dealers have a cause of action against the shipowners for the tort of fraudulent or negligent misrepresentation. I cannot, however, resist the temptation to point out that the misrepresentation was in writing and was made when the bill of lading was examined by the dealers or their bankers on their behalf. This occurred on 2 October 1973 in Germany and the damage caused by the misrepresentation was incurred upon the same date when the bankers paid for the shipping documents which included in the bill of lading the price under a June contract for goods shipped on board on or before the end of August 1973 instead of the lesser price obtainable under a contract made on 6 September 1973 for goods that had not been shipped on board until that date. This was more than six years before 21 May 1980 when the writ was issued in the English proceedings and any claim in those proceedings based upon the misrepresentation made in Germany on this occasion would have been time-barred in any proceedings brought in England. On any subsequent occasion when the bill of lading with its misrepresentation about the date of shipment came into the possession of the dealers, this was after the GAFTA arbitration and the dealers knew that the date of shipment appearing on it was false. They were not deceived by it and so it gave rise to no fresh cause of action in English law.

Lord Roskill

My Lords,

13

I have had the advantage of reading in draft the speeches of my noble and learned friends Lord Diplock and Lord Brandon of Oakbrook. I agree with both speeches, and for the reasons they give I would dismiss this appeal.

Lord Bridge of Harwich

My Lords,

14

For the reasons given in the speeches of my noble and learned friends Lord Diplock and Lord Brandon of Oakbrook, with both of which I agree, I would dismiss this appeal.

Lord Brandon of Oakbrook

My Lords,

15

The appellants in this case are D.S.V. Silo-und Verwaltungsgesellschaft m.b.H, a company incorporated in the Federal Republic of Germany. They are the successors in title, as regards both rights and obligations, of Gesellschaft für Getreidehandel A.G., another company incorporated in the same country, which I shall call “GfG.” The respondents are the owners of the Sudanese ship, the Sennar, and also of 13 sister ships of hers, including the El Gezira and the Merawi.

16

By a writ issued on 21 May 1980 the appellants began in the Admiralty Court an action in rem against the Sennar and her 13 sister ships. The claim endorsed on the back of the writ was in these terms:

“The plaintiffs' claim is for an indemnity and/or damages for fraud and/or breach of duty and/or negligence in connection with the shipment of a cargo of Sudanese groundnut expellers in the vessel Sennar at Port Sudan during August/September 1973. The plaintiffs sue as successors in title to Gesellschaft für Getreidehandel m.b.H, which company incurred liabilities to third parties pursuant to an arbitration award and an appeal therefrom dated 22 May 1974 and has further incurred costs and other incidental expenses...

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