Sierra Leone (Government of) v Marmaro Shipping Company Ltd (Amazona, Yayamaria)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PARKER,SIR DENYS BUCKLEY,LORD JUSTICE FOX |
| Judgment Date | 15 March 1989 |
| Judgment citation (vLex) | [1989] EWCA Civ J0315-7 |
| Docket Number | 89/0283 1988 Folio 1256 1988 Folio 1253 1988 Folio 1254 1988 Folio 1255 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 March 1989 |
[1989] EWCA Civ J0315-7
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 LEGGATT)
Royal Courts of Justice,
Lord Justice Fox
Lord Justice Parker
Sir Denys Buckley
89/0283
1988 Folio 1251
1988 Folio 1256
1988 Folio 1253
1988 Folio 1254
1988 Folio 1255
and
MR ANTHONY DIAMOND, Q.C. (instructed by Messrs. Holman Fenwick & Willan) appeared on behalf of the Appellants.
MR J. HIRST (instructed by Messrs. Clyde & Co.) appeared on behalf of the Respondents.
This is an appeal from the judgment of Leggatt J. given on 13th April 1987 on the hearing of two summonses, one issued by the plaintiffs and the other by the defendants in each of six actions. In each of such actions the plaintiffs claim damages for short delivery of oil cargoes carried from Nigeria to Sierra Leone under bills of lading issued by or on behalf of the owners of the carrying vessel. In five cases this was the vessel "Amazona". In the sixth it was the vessel "Yayamaria". "Amazona" was owned by the defendants, Marmaro Shipping Co. Ltd. "Yayamaria" was owned by the defendants, Margaritis Marine Co. Ltd.
The bills of lading were all in the same terms. Clause 7(1) expressly incorporated the Hague-Visby Rules ("the Rules"), and Clause 7(3) provided that if any term of the bill of lading was repugnant to the Rules, it should be void to that extent, but no further.
Article III, Rules 6 and 8 of the Rules, so far as immediately material provide:
" Rule 6..…the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods unless suit is brought within one year of their delivery or the date when they should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen.
"Rule 8. Any clause, covenant or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with goods arising from negligence, fault or failure in the duties and obligations provided in this article or lessening such liability otherwise than is provided in these rules shall be null and void and of no effect". In five cases the Writ was issued very shortly before the expiry of the period provided by Rule 6, and in one case very shortly before the expiry of an agreed extension. In no case, however, was the Writ served or sought to be served until much later.
There are differences between the material dates in the six cases, but such differences are not and were not suggested to be material. I shall therefore set out the facts in relation to one case only, namely that relating to the first shipment on "Amazona".
The relevant dates up to service of the Writ are: 31st August 1984, Bill of Lading; 9th September 1984, Final discharge; 27th August 1985, Request for extension of time; 6th September 1985, Request refused. Writ Issued. 4th August 1986, Plaintiffs request defendants to appoint solicitors; 4th September 1986, Writ served.
It will be seen from the foregoing that not only was the Writ not issued until very shortly before the expiry of the one-year period, but also that it was not served until very shortly before its own expiry date.
Before continuing with the history, it is necessary to set out Clause 10 of the bill of lading, in so far as relevant for present purposes. It provides:
"(A) The contract contained in or evidenced by this Bill of Lading shall, notwithstanding any other term set out or incorporated herein, be construed and the relations between the parties determined in accordance with the law of England.
"(B) Any dispute arising out of this Bill of Lading shall be decided by the English Courts to whose jurisdiction the parties hereby agree.
"Notwithstanding the foregoing, but without prejudice to any party's right to arrest or maintain the arrest of any maritime property, either party may, by giving written notice of election to the other party, elect to have any such dispute referred to the arbitration of a single arbitrator in London in accordance with the provisions of the Arbitration Act 1950, or any statutory modification or re-enactment thereof for the time being in force.
"A party shall lose its right to make such an election only if—
(a) it receives from the other party a written notice of dispute which—
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(i) states expressly that a dispute has arisen out of this Bill of Lading;
(ii) specifies the nature of the dispute; and
(iii) refers expressly to this Clause 10(B) and
(b) it fails to give notice of the election to have the dispute referred to arbitration not later than 30 days from the date of receipt of the notice of dispute".
It is the foregoing clause which has led to the present dispute between the parties.
Points of Claim were delivered in each action on 10th October 1986. Receipt was acknowledged by the defendants' solicitors on 23rd October 1986 in a telex in which they stated, inter alia:
"We are also actively considering with our clients whether they wish to elect for arbitration on any of the cases in accordance with the bill of lading terms.…"
"We shall also be grateful for your confirmation that, if our clients elect for arbitration on any of the cases, you will consent to a stay of the corresponding action".
To this the plaintiffs' solicitors replied on 27th October. Without prejudice to a contention that the plaintiffs were entitled to proceed with the High Court action, they gave formal notice in accordance with Clause 10(B) in all cases.
On 26th November the defendants' solicitors on their behalf elected for arbitration in all six cases. This election was expressed to be without prejudice to the defendants' contention that the plaintiffs had no title to sue.
After some further exchanges, the defendants, on 11th December, issued a summons in each action seeking an order:
"…that all further proceedings against the defendants in this matter be stayed pursuant to Section 1 of the Arbitration Act 1975, the plaintiffs having brought this action under a Bill of Lading dated the 31st August 1984 which by its written terms provides for reference to arbitration for all disputes arising thereunder".
To this the plaintiffs responded by summons dated 19th December, seeking an extension of time for commencement of arbitration under Section 27 of the Arbitration Act 1950.
Before these summonses were heard, however (or possibly during the hearing) the defendants amended theirs by adding an application for an order:
"…that all proceedings be stayed under s.49(3) of the Supreme Court Act 1981 and/or the inherent jurisdiction of the Court on the grounds that in the particular circumstances of this case it is just and convenient to grant such a stay pending the outcome of separate proceedings to be commenced by the defendants raising the question whether the plaintiffs were parties to a contract with the defendants on the terms of the Bill of Lading referred to in the Points of Claim".
In the amended summons this application was put first, the original order sought being placed second. This application was for a stay of the actions and for a stay or adjournment of the defendants' own application for a stay in aid of arbitration.
On the hearing of the summonses before Leggatt J. the plaintiffs accepted that, by virtue of the decision of this Court in Kenya Railways v. Antares Company PTE (1987) 1 Lloyds Reports 424, their applications for extensions of time could not succeed short of the House of Lords. Whilst reserving the question against such a possibility, they did not therefore pursue such applications and they were accordingly dismissed. We are not concerned, even formally, with such applications.
On the defendants' applications, the learned Judge (i) refused the application under Section 49(3) of the Supreme Court Act 1981; (ii) granted a stay of the pending arbitration upon the defendants' undertaking by Counsel, in the form set out in the Schedule to his order. Such undertaking was an undertaking, subject to reservations and qualifications Which I need not mention, not, in the arbitrations, to take a time-bar defence based on Article III Rule 6 of the Hague-Visby Rules.
From the learned Judge's judgment the defendants now appeal by leave of this Court seeking, in the alternative, either a stay or adjournment of all proceedings, including their own application for a stay, pending the determination by separate action of the question of title to sue or a stay pending arbitration without conditions.
The first issue is whether Clause 10(B) of the bill of lading is rendered null and void and of no effect by virtue of Article III Rule 8 of the Rules. The submission that it is depends upon the question whether, if the actions were stayed and the plaintiffs left to pursue their claims in arbitration, they would be successfully met by the Rule 6 time-bar. If they would not, the Clause could not possibly be affected by Rule 8. If they would, it is said that the clause clearly relieves the defendants from liability or lessens their liability otherwise than is provided by the Rules because (i) it supplants proceedings properly brought within the time limit by proceedings outside the time limit and thus wholly relieves the defendants of liability otherwise than as provided by the Rules; (ii) it...
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