The Rewia
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE LEGGATT,LORD JUSTICE NICHOLLS,LORD JUSTICE DILLON |
| Judgment Date | 20 June 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J0620-4 |
| Docket Number | 91/0639 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 June 1991 |
[1991] EWCA Civ J0620-4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMIRALTY COURT
(MR JUSTICE SHEEN)
Royal Courts of Justice
Lord Justice Dillon
Lord Justice Nicholls
Lord Justice Leggatt
91/0639
MR JONATHAN GAISMAN and MR CHRISTOPHER BUTCHER, instructed by Messrs Richards Butler, appeared for the Appellant (Third Defendant).
MR TIMOTHY SALOMAN and MR RICHARD SOUTHERN, instructed by Messrs Holmes Hardingham Walser Johnston Winter, appeared for the Respondent (Plaintiff).
The third defendants, Rewia Shipping Company, appeal from the order of Sheen J. of 25th July 1990. By that order he dismissed the third defendants' applications under Order 12, rule 8 for orders that the order of the Admiralty Registrar, giving leave to the plaintiffs to issue and serve a concurrent writ on the third defendants out of the jurisdiction, be set aside and that the issue of the writ and service of it on the third defendants be set aside. As their title indicates, the plaintiffs are the Owners of the Cargo lately laden on the Ship "Rewia". The grounds of the application were:
(a) There is no real issue to be tried between the plaintiffs and the first defendants;
(b) The third defendants are not necessary or proper parties to these proceedings;
(c) This is not a proper case for service out of the jurisdiction:
(i) by reason of an exclusive jurisdiction agreement between the plaintiffs and the third defendants, and
(ii) because the plaintiffs have not shown that England is the more appropriate forum than that provided for in the exclusive jurisdiction agreement between the parties;
(d) The third defendants are domiciled in Germany, and must be sued there pursuant to Article 2 of the Schedule 1 to the Civil Jurisdiction and Judgments Act 1982;
(e) The first plaintiffs and the second defendants are domiciled in a Contracting State and the third defendants are and the first plaintiffs claim to be party to an agreement that a court of a Contracting State, the Federal Republic of Germany, is to have jurisdiction to settle disputes arising in connection therewith under Article 17 of Schedule 1 of the Civil Jurisdiction and Judgment Act 1982.
The plaintiffs claim as cargo interests for loss and damage to a cargo of nutmegs and mace shipped in July 1988 aboard the vessel "Rewia" at Granada for carriage to Felixstowe, Rotterdam and Hamburg. The third defendants then were the Owners, the fourth defendants were intermediate charterers, and the first defendants were sub-charterers of the vessel. The claim is made against the "first and/or third defendants" under contracts of carriage contained in or evidenced by bills of lading. The claim is also made against those defendants for breach of their duties as bailees or carriers for reward in failing to deliver the cargo and to deliver it in the like good order and condition as when shipped. The third defendants claim that they were, but the first defendants were not, parties to the bills of lading contracts, and that they therefore were carriers under the bills of lading, on which they are entitled to rely. Clause 3 of the bills of lading provides:
"3. Jurisdiction
Any dispute arising under this Bill of Lading shall be decided in the country where the carrier has its principal place of business, and the law of such country shall apply except as provided elsewhere herein."
According to the third defendants, their principal place of business is Hamburg. On that footing they contend that the court is obliged by Article 17 of the Brussels Convention 1968 ('the Convention') to decline jurisdiction.
The plaintiffs contend that the judge was right to find that, even though the third defendants' domicile was in West Germany, their principal place of business was in Hong Kong. They argue that it was in those circumstances within the judge's discretion to refuse to set aside the proceedings, and that there are now no grounds for interfering with that exercise of discretion.
Section 42 of the Civil Jurisdiction and Judgments Act 1982 ('The Act') provides (so far as material) as follows:
"(1) For the purposes of this Act the seat of a corporation…shall be treated as its domicile.
(2) The following provisions of this section determine where a corporation or association has its seat—
(a) For the purpose of Article 53 (which for the purposes of the 1968 Convention equates the domicile of such a body with its seat)…
(6) Subject to subsection (7), a corporation or association has its seat in a state other than the United Kingdom if and only if—
(a) it was incorporated or formed under the law of that State and has its registered office or some other official address there; or
(b) its central management and control is exercised in that state."
It was disputed before the judge, but is now common ground, that the seat, and therefore the domicile, of the third defendants is in West Germany, because its central management and control is exercised in that State. The judge came to that conclusion on account of the facts which he recapitulated at page 17 of the transcript of his judgment in this way:
"First, all the directors were German and resident in West Germany. Second, the shares in Rewia are all beneficially owned or controlled by German companies. Third, major policy decisions are made in Hamburg. Fourth, such meetings of directors as were held were in Hamburg. In the agreement with Turbata drawn up on the 15th June 1987 certain major policy decisions were reserved by the directors of Rewia, and that agreement is specifically stated to be governed by German law and the parties thereto agreed to submit to the jurisdiction of the Hamburg courts."
The reference to Turbata is to Turbata Co. Ltd. of Hong Kong who were employed by the third defendants as managers of the vessel.
Article 17 of the Convention (as amended) provides that where parties, one or more of whom is domiciled in a Contracting State, have agreed that the courts of a Contracting State are to have jurisdiction to settle particular disputes, those courts shall have exclusive jurisdiction, and that such an agreement must be in writing or in accordance with international trade practices.
The four principal issues in this appeal are these:
(1) Whether the third defendants were parties to the Bills of Lading;
(2) Whether the third defendant's principal place of business was in West Germany;
(3) To what standard the third defendants are required to prove that clause 3 constitutes a jurisdiction agreement between the third defendants and the plaintiffs to which Article 17 applies; and
(4) Whether clause 3 satisfies the formal requirements of Article 17.
The judge held that the third defendants are domiciled in West Germany. From that there is no appeal. Article 2 of the Convention provides:
"Subject to the provisions of this Convention, persons domiciled in a Contracting State shall, whatever their nationality, be sued in the courts of that State.
Persons who are not nationals of the state in which they are domiciled shall be governed by the rules of jurisdiction applicable to nationals of that State."
It follows that, unless the plaintiffs can show that another Article applies, the third defendants cannot be sued in this country, but must be sued in West Germany.
Article 6 provides (so far as material):
"A person domiciled in a Contracting State may also be sued:
(1) where he is one of a number of defendants, in the courts or the place where any one of them is domiciled;"
This is a provision analogous with R.S.C. Order 11, rule 1(1)(c), which permits a person to be served out of the jurisdiction who is a 'necessary or proper party'. To rely on Article 6 the plaintiffs would have to show that there is a real issue that the plaintiffs may reasonably ask the court to try as to whether the first defendants assumed the obligations of the carriers under the bills of lading. They seek to do that notwithstanding that they have alleged in the alternative, the first defendants have averred, and the third defendants have admitted, that the third defendants were the carriers, because the bills were owners' bills. The judge remarked that the bills of lading are all on the first defendants' standard form with no indication that they were not the carriers; that according to the plaintiffs the contracts of carriage were made orally by the second plaintiffs with the first defendants' local agents in Grenada at time when the second plaintiffs were unaware that the Rewia was on charter; that in October 1989 the third defendants' solicitors contended by telex to the plaintiffs' solicitors that the bills of lading were charterers' bills; and that under German law it would be held that the third defendants are not parties to the contract of affreightment and are not liable in contract to the cargo interests under the bills of lading. The judge concluded that:
"It is…clearly arguable that the shippers entered into a contract with the first defendants and that the first defendants assumed the responsibilities of 'the carrier' under the bills of lading."
The time charter was made in Hamburg 8th January 1988 in NYPE form. By clause 8 it was provided that the captain is "to sign Bills of Lading for cargo as presented in conformity with Mates' or Tally Clerks' receipts." By clause 53:
"It is understood that the Master will authorize Charterers, or their Agents, to...
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