Ultisol Transport Contractors Ltd v Bouygues Offshore SA ('The Bos 400')
| Jurisdiction | England & Wales |
| Judge | Evans,Mummery L JJ,Sir John Knox |
| Judgment Date | 24 July 1998 |
| Court | Court of Appeal (Civil Division) |
| Date | 24 July 1998 |
Court of Appeal (Civil Division).
Evans and Mummery L JJ and Sir John Knox.
Angus Glennie QC and Clare Ambrose (instructed by Thomas Cooper & Stibbard) for Ultisol.
Nigel Teare QC and Simon Gault (instructed by Clyde & Co) for Bouygues.
Stephen Tomlinson QC and Richard Southern (instructed by Middleton Potts) for Portnet.
Nicholas Hamblen QC (instructed by Edwin Coe) for Caspian.
The following cases were referred to in the judgments:
Aratra Potato Co Ltd v Egyptian Navigation Co (“The El Amria”)UNK [1981] 2 Ll Rep 119.
Citi-March Ltd v Neptune Orient Lines LtdWLR [1996] 1 WLR 1367.
Continental Bank NA v Aeakos Compania Naviera SAWLR [1994] 1 WLR 588.
Falstria, TheUNK [1988] 1 Ll Rep 495.
Hadmor Productions Ltd v HamiltonELR [1983] 1 AC 191.
Hill v AudusENR (1855) 1 K & J 263.
James v London and South Western Railway CoELR (1872) LR 7 Ex 187.
Polish Steam Ship Co v Atlantic Maritime CoELR [1985] QB 41.
Saipem SpA v Dredging VO2 BV (“The Volvox Hollandia”)UNK [1988] 2 Ll Rep 361.
Spiliada Maritime Corp v Cansulex Ltd (“The Spiliada”)ELR [1987] AC 460.
Tojo Maru, TheELR [1972] AC 242.
Shipping — Conflict of laws — Shipowner's right to limit liability — Anti-suit injunction — Exclusive jurisdiction clause in towage contract — Whether clause should be upheld when natural forum was elsewhere — Whether position of parties not bound by clause should be considered — Whether shipowner entitled to limit before liability decided — Whether limitation proceedings should be stayed on forum grounds.
These were applications for leave to appeal against orders of Clarke J, Colman J and Timothy Walker J ([1997] CLC 1497) and appeals against two limitation decrees made by Rix J ([1997] CLC 1463).
A barge, the Bos 400, owned by a French company, Bouygues, was being towed from the Congo to Cape Town by the tug, Tigr, owned by Caspian and time-chartered to Ultisol, under a towage contract between Bouygues and Ultisol governed by English law and containing an exclusive English jurisdiction clause. The tow line parted in stormy conditions off Cape Town and the barge was lost. Bouygues claimed damages from Ultisol and Caspian and also from the Cape Town harbour authority, Portnet. Bouygues claimed that the master and crew of Tigr were negligent and that Caspian was vicariously liable. Ultisol and Caspian had also misrepresented the capacity of the tug giving Bouygues the right to rescind as well as claim damages. Portnet was allegedly negligent in allowing the tug and tow to come too close to the shore in the prevailing conditions. Bouygues took proceedings in South Africa against Ultisol and Caspian and separately against Portnet. Clarke J granted Ultisol an anti-suit injunction ([1996] 2 Ll Rep 140) upholding the jurisdiction clause in the towage contract and restraining Bouygues' South African proceedings against Ultisol. However Caspian was refused a similar injunction by Morison J ([1997] 2 Ll Rep 485) on the basis that it could not rely on the jurisdiction clause in the towage contract and that South Africa was the natural forum. Portnet claimed against Ultisol and Caspian as third parties in Bouygues' South African proceedings against it and the South African court upheld its right to do so. On the basis of Clarke J's decision, Colman J ([1997] CLC 1443) refused to set aside service on Portnet of third party notices by Ultisol and Caspian in the English proceedings. Timothy Walker J ([1997] CLC 1497) refused to set aside the injunction granted by Clarke J.
Ultisol and Caspian as charterers and shipowners obtained declarations of limitation from Rix J ([1997] CLC 1463) under the 1976 convention applying in England. South Africa applied the 1957 convention where the limit was lower but easier to break.
Bouygues appealed out of time against Clarke J's judgment and against the judgments of Colman J and Timothy Walker J and the limitation decrees of Rix J.
Held, allowing the appeals against the orders of Clarke J, Colman J and Timothy Walker J and dismissing the appeal against the limitation decrees of Rix J:
1. Where all four parties were involved in South African proceedings in which the same issues arose (apart from the right to limit under English law) it seemed obvious that the disadvantages of multiplicity of proceedings and the risk of inconsistent findings meant that Bouygues ought not to be restrained from pursuing its claims against Ultisol in South Africa. Bouygues could withdraw its claims against Ultisol and Caspian in South Africa but might have more difficulty disengaging from its proceedings against Portnet. In considering the jurisdiction clause between Bouygues and Ultisol the court could consider the position of Caspian and Portnet. South Africa was the natural forum and notwithstanding the conclusive effect of the jurisdiction clause as between Bouygues and Ultisol the injunction if properly granted should be discharged. Ultisol had established its right to limit in England and Bouygues undertook to enforce any South African judgment only against the English fund. In the circumstances Ultisol's contractual right to the English limitation regime could not possibly outweigh the other considerations in favour of not continuing the injunction granted by Clarke J against Bouygues.
2. The Court of Appeal was entitled to take a global view of the interlocutory position. The judgment of Clarke J had been undermined by later events, in particular the refusal by Morison J to grant an injunction to Caspian and the evolution of the position of Portnet. Clarke J considered a number of future possibilities but he did not make his order in the light of and notwithstanding those possibilities. In the circumstances the appeal against Clarke J's judgment should be allowed.
3. Colman J's refusal to set aside the joinder of Portnet as a third party was founded on Clarke J's injunction and once that was removed the argument against allowing Portnet to be joined became very strong and would have prevailed. The appeal against Colman J's judgment was allowed. The question whether Caspian's entitlement to limit in England should have effect in South Africa was a matter for the South African court. It was not necessary to decide the appeal against the judgment of Timothy Walker J.
4. Rix J was correct to hold that Ultisol and Caspian were entitled to limit even in the absence of findings of liability against them. The 1976 convention permitted a period to elapse between the grant of a limitation decree and the establishment by admission or determination of the shipowner's liability.
5. The loss and damage claimed by Bouygues was the same in respect of its causes of action including the misrepresentation claim against Ultisol which was within art. 2.1 of the 1976 convention, as Rix J held.
6. If Ultisol had a contractual right to limit its liability in accordance with English law then that could be given effect to in South Africa by a claim for breach of the exclusive jurisdiction clause, so no purpose would be served by staying the limitation proceedings against Ultisol. The right to limit was quite separate from the issue of liability and it was the shipowner who had the right to apply to limit and that right could not properly be restrained by seeking a negative declaration of non-entitlement to limit. Further there was no issue to be decided on limitation. Therefore Rix J's judgment would be upheld and the appeal dismissed in relation to Caspian's limitation proceedings, although it was not clear what the South African court's attitude would be to Caspian's claim to limit its liability by reference to English law.
Evans LJ: 1. These are applications for leave to appeal against orders made by three judges in the Commercial Court, Clarke, Colman and Timothy Walker JJ. Their orders were all concerned with questions as to the exercise of the jurisdiction of the English court in a case where all or most of the relevant events took place in South Africa. There are also appeals against two final orders in the form of limitation decrees made by Rix J in proceedings commenced by the two respondents, who were the owners and time charterers of the ocean going tug Tigr, respectively.
2. We heard submissions from leading counsel for each of the four parties, which were directed to issues raised by the appeals for which leave is sought. Although it was not conceded by the respondents that leave to appeal should be given, it is clear in my view that substantial issues are raised and that leave should be given, together with the necessary extension of time as regards the judgment of Clarke J in 1996. This enables us to consider the issues in the context of appeals rather than applications for leave to appeal.
3. On 26 June 1994 the barge Bos 400 was under tow from Pointe Noire in the Congo to Capetown. The tow line parted in stormy conditions as the vessels were approaching Cape Town and the barge was driven ashore onto the rocks at Oude Schip, a little to the south. The barge became a total loss.
4. The barge was registered in France and owned by a French company, Bouygues Offshore SA (“Bouygues”). The tug Tigr was registered in Azerbaijan. Her owners who are Russian or Azerbaijani are known as Caspian, and she was time-chartered to Ultisol Transport Contractors Ltd (“Ultisol”). She was managed by a Dutch company, Marine Management Group BV (“Marine Management”) based in Holland. The towage contract was made between Ultisol and Bouygues and was dated 26 May 1994.
5. Bouygues claims damages from Ultisol (towage contractors) and from Caspian (owners) and also from the Cape Town harbour authority, known as Portnet. The latter is alleged to have been negligent in permitting the tug and tow to approach the shore in the prevailing conditions.
6. The procedural history is complicated and the issues raised by the...
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