Union de Remorquage et de Sauvetage SA v Lake Avery Inc. ('The Lake Avery') [QBD (Admiralty)]
| Jurisdiction | England & Wales |
| Judge | Clarke J. |
| Judgment Date | 04 November 1996 |
| Court | Queen's Bench Division (Admiralty) |
| Date | 04 November 1996 |
Queen's Bench Division (Admiralty Court)
Clarke J.
Vasanti Selvaratnam (instructed by Hewett & Co) for the plaintiffs.
Simon Kverndal (instructed by Eversheds) for the defendant.
The following cases were referred to in the judgment:
Arab Business Consortium v Banque Franco-TunisienneUNK [1996] 1 L1 Rep 485.
Atlantic Emperor, The (No. 2) [1992] 1 L1 Rep 624.
Choko Star, TheUNK [1987] 1 L1 Rep 508.
Heidberg, TheUNK [1994] 2 L1 Rep 287.
Parouth, TheUNK [1982] 2 L1 Rep 351.
Rich (Marc) Rich & Co AG v Società Italiana Impianti PA (“The Atlantic Emperor”)UNK [1989] 1 L1 Rep 548 (Hirst J and CA); (Case C-190/89) [1991] ECR I-3855; [1991] 2 CEC 358 (ECJ).
Spiliada Maritime Corp v Cansulex LtdELR [1987] AC 460.
Tatry v Maciej RatajECAS (Case C-406/92) [1994] ECR I-5439; [1995] CLC 275.
Toepfer International GmbH v Molino Boschi SRL [1996] CLC 738.
Xing Su Hai, TheUNK [1995] 2 L1 Rep 15.
Arbitration — Lis alibi pendens — Forum conveniens — Service out of jurisdiction — Plaintiffs claimed salvage agreed on LOF 95 and sought to arbitrate — Defendants had taken action in Holland and argued that English court should, decline jurisdiction under Brussels convention — Whether case fell within arbitration exception to application of convention — Whether England was the appropriate forum — Civil Jurisdiction and Judgments Act 1982, Sch. 1 (Brussels Convention), art. 1(4).
This was an action in which the plaintiffs claimed a declaration that a valid and binding agreement for salvage services on the terms of Lloyd's Open Form 95 was made between the parties. They wished to have their claim for salvage remuneration assessed by a Lloyd's arbitrator in London in accordance with cl. 1(c) of LOF 95. The defendants argued that the court should decline jurisdiction under art. 21 or art. 22 of the Brussels Convention, because the defendants had commenced proceedings against the plaintiffs in Holland which it was accepted at first instance involved the same cause of action and were between the same parties; alternatively the defendants argued that the court should stay the action on the ground of lis alibi pendens or forum non conveniens. The plaintiffs said that the convention did not apply because the action related to arbitration and the convention did not apply to arbitration (art. 1(4)). They relied on The Atlantic Emperor[1991] ECR I-3855, [1991] 2 CEC 358 (ECJ) as having held that the exclusion in art. 1(4) extended to litigation concerning the appointment of an arbitrator. The defendants relied on the same case and submitted that in the instant case the subject matter of the dispute was not the appointment of an arbitrator but the determination of the question whether an agreement was made on LOF 95 or not.
The plaintiffs said that the master orally agreed LOF 95. The defendants” case was that the master agreed that the plaintiffs should render services to his vessel but that no agreement was ever made on the terms of LOF 95.
Held, declining to set aside the order giving leave to serve out of the jurisdiction or to stay the action on the grounds of forum conveniens or lis alibi pendens:
1. It was arguable that the master agreed that the plaintiffs” services were rendered on the terms of LOF 95, but it was also arguable that he did not. Whether he did or not was the very question for determination at a trial, whether that trial took place in England or in Holland.
2. The proceedings were ancillary to the arbitration proceedings and there was no significant distinction between this case and The Atlantic Emperor. The case was outside the Brussels Convention because it fell within the arbitration exception in art. 1(4).
3. In all the circumstances and having regard in particular to the fact that if LOF 95 was agreed the court in Holland might not enforce the arbitration clause, England was clearly the more appropriate forum for the determination of the issue whether LOF 95 was agreed, both for the interests of the parties and the ends of justice.
Clarke J:
The plaintiffs say that they rendered salvage services to the defendants” vessel “Lake Avery” and her cargo on 2 July 1996. They further say that they did so pursuant to a contract on the terms of LOF 95 which was made orally by the master on that day. The defendants admit that some services were rendered by the plaintiffs. As I understand it they also admit and aver that the services were rendered pursuant to a contract but they deny that they were rendered pursuant to a contract on the terms of LOF 95. They further deny that the services rendered were salvage services.
In this action the plaintiffs claim a declaration that a valid and binding agreement on the terms of LOF 95 was made between the parties on 2 July 1996. The plaintiffs wish to have their claim for salvage remuneration assessed by a Lloyd's arbitrator in London in accordance with cl. 1(c) of LOF 95. By the express terms of cl. 1(g) LOF 95 is governed by English law.
The defendants say that this court should decline jurisdiction under art. 21 or art. 22 of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 as amended (“the Brussels Convention” or “the convention”). Alternatively they say that this court could stay the action on the ground of lis alibi pendens or forum non conveniens.
Article 21 provides as follows:
“Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Contracting States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.
Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court.”
The writ in this action was issued on 20 August 1996. The defendants say that by that time proceedings involving the same cause of action had already been brought by them against the plaintiff in the District Court of Middleburg in Holland, either on 5 or on 11 July 1996. The defendants say that that court has jurisdiction under art. 5.1 of the convention. It is a matter for the Dutch court to decide whether or not that is so, but in the meantime the defendants seek a stay of this action under art. 21. In these circumstances I shall assume for present purposes that the Dutch court does indeed have jurisdiction under art. 5.1. It is, as I understand it, common ground at first instance that on that assumption the Dutch proceedings involve the same cause of action and are between the same parties as these proceedings: Tatry v Maciej RatajECAS (Case C-406/92) [1994] ECR I-5439; [1995] CLC 275.
It follows that this court is bound to stay these proceedings under art. 21 unless there is some provision of the convention which excludes them from its operation. The plaintiffs say that there is such a provision, namely art. 1(4). Article 1 provides, so far as material, as follows:
“The Convention shall not apply to—
…
4 Arbitration.”
The plaintiffs say that the convention (including of course art. 21 and 22) does not apply at all because this action relates to arbitration. They say that the sole purpose of the declaration which they seek is to enable them to pursue their claim before a Lloyd's arbitrator in London so that this action is ancillary to the arbitration process. The declaration sought in the indorsement on the writ is in these terms:
“that a valid and binding…LOF 95 was made between the plaintiffs and the defendants on 2 July 1996 on board the LAKE AVERY in the River Schelde off Terneuzen and further or other relief and costs.”
The plaintiffs further say that by the terms of LOF 95 the parties have agreed (by cl. 1(b)) that the services shall be accepted as salvage services and (by cl. 1(c)) that the remuneration and any other difference arising out of the agreement or the operations thereunder shall be determined by arbitration in London. The defendants say that the arbitration exception in art. 1(4) of the convention has no application to this action.
Before considering the extent of the exception in art. 1(4), it is appropriate to say a little more about the facts. At about 0505 hours on 2 July the Lake Avery anchored to her port anchor in anchorage C in the Put van Terneuzen in the River Scheldt. She had been assisted to the anchorage not only by her pilot but also by tugs owned or operated by the plaintiffs, including the tug “Fighter”. That assistance had been given pursuant to a contract between the plaintiffs and the time-charterers of the Lake Avery. It cannot be seriously suggested that any of the services which were subsequently rendered by the plaintiffs were rendered pursuant to that contract. The purpose of the vessel being anchored was to enable her cargo to be partly lightened. To that end a floating crane was made fast to the starboard side at about 0530 hours and a lightening barge was made fast to the crane shortly thereafter. Lightening began from number 3 hold about 0600 hours. The Fighter remained in the vicinity and the pilot remained on the bridge.
The evidence which is at present available from the defendants is contained in two affidavits of Mr Hilton of the defendants” solicitors. It is fair to say that, while they have some evidence from the master of the vessel, they do not at present have a full statement from him because he is at sea. According to Mr Hilton, at about 0920 hours the officer of the watch noticed that the vessel appeared to be dragging her anchor and he called the master and pilot, who had by then left the bridge. Both of them came to the bridge immediately. It is common ground that at about this time the plaintiffs” tug Fighter approached the vessel. The plaintiffs” case is summarised in the affidavits of Mr...
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