Union Transport Plc v Continental Lines SA and Another
| Jurisdiction | England & Wales |
| Judge | Lord Keith of Kinkel,Lord Ackner,Lord Goff of Chieveley,Lord Jauncey of Tullichettle,Lord Lowry |
| Judgment Date | 12 December 1991 |
| Judgment citation (vLex) | [1991] UKHL J1212-2 |
| Date | 12 December 1991 |
| Court | House of Lords |
[1991] UKHL J1212-2
Lord Keith of Kinkel
Lord Ackner
Lord Goff of Chieveley
Lord Jauncey of Tullichettle
Lord Lowry
House of Lords
My Lords,
I have had the opportunity of considering in draft the speech to be delivered by my noble and learned friend Lord Goff of Chieveley. I agree with it, and for the reasons he gives would dismiss this appeal.
My Lords,
I have had the opportunity of considering in draft the speech to be delivered by my noble and learned friend Lord Goff of Chieveley. I agree with it, and for the reasons he gives I, too, would dismiss this appeal.
My Lords,
This appeal raises a question of jurisdiction, to be decided with reference to the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (the Brussels Convention), implemented in this country by the Civil Jurisdiction and Judgments Act 1982 (the Act of 1982).
The matter has arisen as follows. The appellants are shipowners and are, for the purposes of the Brussels Convention, domiciled in Belgium. The respondents claim that, by virtue of telex, fax and telephone exchanges which took place in December 1988 in London between the respondents and brokers acting on behalf of the appellants, a fixture was concluded between the parties for a voyage charter of a vessel to be nominated by the appellants, for the carriage of a cargo of telegraph poles from Fernandina in Florida to Chalna in Bangladesh. The most relevant provisions read as follows:
"Crossam Line vessel to be nominated - geared max 15 years - single decker or twin decker in owner's option but always suitable to load telegraph poles. …"
"Laycan 1/30 Jan to be narrowed to 14 days Laycan with 5 working days definite arrival notice. …"
It was the respondents' contention that the fixture messages incorporated by reference the terms of a previous charterparty between the parties, which included a provision requiring payment of commission in London, a London general average clause, and a London arbitration clause; and it is the respondents' case that the resulting charter was expressly or impliedly governed by English law.
A dispute arose between the parties in January 1989, as a result of which the appellants intimated that they were no longer interested in lifting the cargo. In February 1989, the respondents commenced arbitration proceedings in London against the appellants. They served their points of claim on 8 March, claiming damages on the ground that the appellants had failed to nominate a vessel. The appellants appointed an arbitrator, but did so without prejudice to their contention that there was no concluded contract between the parties.
Now, when an issue arises as to the existence of a charterparty containing a London arbitration clause, the party claiming that there is such a charterparty will usually commence proceedings in the Commercial Court in London claiming a declaration to that effect. In the present case, however, the Burssels Convention applied: and the appellants, being domiciled in Belgium which is of course a Contracting State, invoked article 2 of the Convention. This provides that, subject to the provisions of the Convention, persons domiciled in a Contracting State shall, whatever their nationality, be sued in the courts of that state. It is provided in article 1 that the Convention shall not apply, inter alia, to arbitration. But the dispute in the present case arose under the shadow of the Marc Rich litigation ( Marc Rich & Co. A.G. v. Societa Italian Impianti P.A.) [1989] 1 Lloyd's Rep. 548. That case was concerned with a contract for the sale of crude oil. The buyers claimed that the oil delivered was seriously contaminated. They commenced arbitration proceedings in London, in reliance upon a clause which provided both for English law as the governing law and for London arbitration. The sellers, an Italian company, disputed the incorporation of the clause in the sale contract, and commenced proceedings in Italy. The buyers then commenced proceedings in the Commercial Court in London, asking for the appointment of an arbitrator; and the court gave leave for service of the proceedings on the sellers in Italy. The sellers then asked for the leave for service outside the jurisdiction to be set aside, on the ground that the real dispute between the parties was whether the contract incorporated the London arbitration clause: they contended that that dispute fell within the scope of the Brussels Convention and should therefore be tried by the Italian courts, as the courts of the country where they were domiciled. Hirst J. held that the Convention was not applicable; but the sellers appealed to the Court of Appeal, which referred the matter to the European Court of Justice. Under section 3 of the Act of 1982, reference is made to reports by Mr. P. Jenard and Professor Peter Schlosser; and the contention of the sellers received support from opinions by them, though (as the Advocate General was later to observe) the opinion of Professor Schlosser put forward a view "which in every respect contradicts the official report signed by him concerning application of the Convention to disputes relating to arbitration before national courts." Faced with this situation, the respondents in the present case decided to commence fresh proceedings in the Commercial Court, claiming damages for breach of charterparty, relying upon article 5(1) of the Convention, which provides that:
"A person domiciled in a Contracting State may, in another Contracting State, be sued:
(1) in matters relating to a contract, in the courts of the place of performance of the obligation in question…"
It was the contention of the respondents that the place for performance of the obligation to nominate a vessel was London, and therefore that, in accordance with article 5(1), the appellants could be sued in this country.
In point of fact, in the Marc Rich case the European Court of Justice, following the powerful opinion of Advocate General Marco Damon, and rejecting the opinions of Mr. Jenard and Professor Schlosser, held on 25 July 1991, The Times, 20 September 1991, that the contracting parties, by excluding arbitration from the scope of the Convention, intended to exclude arbitration in its entirety, including proceedings brought before national courts; and the court therefore ruled, in the case before it, that article 1(4) of the Convention must be interpreted as meaning that the exclusion of arbitration therein provided for extends to litigation pending before a national court concerning the appointment of an arbitrator, even if the existence or validity of an arbitration agreement is a preliminary issue in that litigation. It seems unlikely therefore that parties to arbitrations or putative arbitrations in London will in future find themselves in the same predicament as the respondents found themselves in at the beginning of 1989.
I return to the present appeal. When the respondents commenced proceedings against the appellants by action in the Commercial Court, they claimed damages from the appellants on the grounds that, in breach of contract, the appellants failed to nominate or to provide a vessel. The addition of the second ground of claim gave the appellants an opportunity to argue that, since the obligation to provide a vessel was not to be performed in England, the respondents were unable to found jurisdiction under article 5(1) of the Convention. They therefore applied to the Commercial Court for an order setting aside the writ and service of the writ. That application was dismissed by Evans J. on 16 February 1990; and an appeal by the appellants from that decision was dismissed by the Court of Appeal on 3 October 1990, leave to appeal to the House of Lords being then refused [1991] 2 Lloyd's Rep. 48. It is from that decision of the Court of Appeal that the appellants now appeal, with the leave of your Lordships' House.
Section 3(1) of the Act of 1982 provides that any question as to the meaning and effect of any provision of the Convention shall be determined in accordance with the principles laid down by the European Court. Accordingly your Lordships, like the courts below, turn to the judgments of the European Court for guidance. Applying the principles laid down by that court, in particular in Shenevai v. Kreischer [1987] E.C.R. 239 at p. 256, both Evans J, and the Court of Appeal [1991] 2 Lloyd's Rep. 48, 51-52, found no difficulty in concluding that, in the present case, the obligation in question was the obligation to nominate a vessel, and further that (as is now no longer in dispute) the place for the performance of that...
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