Union Transport Plc v Continental Lines SA and Another
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE LLOYD,MR JUSTICE EWBANK |
| Judgment Date | 03 October 1990 |
| Judgment citation (vLex) | [1990] EWCA Civ J1003-4 |
| Docket Number | 90/0822 |
| Court | Court of Appeal (Civil Division) |
| Date | 03 October 1990 |
[1990] EWCA Civ J1003-4
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 EVANS)
Royal Courts of Justice
Lord Justice Lloyd
Mr Justice Ewbank
90/0822
MR MICHAEL DEAN Q.C. and MR ADAM FENTON, instructed by Messrs Holman, Fenwick & Willan, appeared for the Appellants (Defendants).
MR V.V. VEEDER Q.C. and MR JOSEPH SMOUHA, instructed by Messrs Waltons & Morse, appeared for the Respondents (Plaintiffs).
In this case we are concerned again with Article 5(1) of the Convention on Jurisdiction, which is to be found in Schedule 1 of the Civil Jurisdiction and Judgments Act 1982. Article 5(1) provides:
"A person domiciled in a Contracting State may, in another Contracting State, be sued:
(1) in matters relating to a contract, in the courts for the place of performance of the obligation in question".
This is the second time that Article 5(1) has been considered by the Court of Appeal this year. In Medway Packaging Limited v. Meurer Maschinen GmbH [1990] 2 Lloyds Rep. 112 the court referred at length to the three decisions of the European Court in which Article 5(1) has been discussed. That makes it unnecessary for me to refer to those decisions in detail, or indeed at all, except to quote two paragraphs from the most recent of the three decisions.
The claim arises out of a telex exchange between the parties or their agents in December 1988. The plaintiffs say that a fixture was concluded in London for the charter of a vessel to be nominated by the defendants to load a cargo of 3,800 metric tonnes of telegraph poles at Fernandina, Florida for carriage to Chalna in Bangladesh. The defendants say that there was no concluded contract between the parties. The parties have done business before and the fixture telex on which the plaintiffs rely incorporates the terms of a previous charter dated 11th September 1986, with logical alterations. Those terms include an arbitration clause. The laydays specified in the fixture telex were lst-30th January 1989.
By telex dated 10th January 1989 the defendants intimated that they were no longer interested in loading the cargo for reasons which need not concern us. In February 1989 the plaintiffs commenced arbitration against the defendants. They served their points of claim on 8th March. Meanwhile the defendants had also appointed Mr Kazantzis as their arbitrator, but without prejudice to their contention that there is no concluded contract between the parties.
The questions which arise where one party relies on an arbitration clause and the other party denies that there is a contract in existence, or denies that the contract includes an arbitration clause, and in particular the question whether proceedings to determine the validity of the arbitration clause in those circumstances are subject to the Convention or are excluded by Article 1(4) of the Convention, are currently the subject of a reference to the European Court: see " The Atlantic Emperor" [1989] 1 Lloyds Rep. 548. That reference is due to be heard very shortly, but for reasons which no doubt seem good to the plaintiffs, they decided not to rely on the arbitration clause and to await the outcome of the reference in the Atlantic Emperor case, but instead to commence fresh proceedings in the Commercial Court, which they were of course perfectly entitled to do.
The statement of claim sets out the terms of the fixture telex on which the plaintiffs rely. The vessel to be nominated was to be a singledecker or a tween decker in owner's option, not more than 15 years old and always suitable for loading telegraph poles.
Paragraph 4 of the statement of claim is as follows:
"Wrongfully and in clear breach of the charterparty the owners failed to nominate or provide a vessel at the loading port in accordance with the charterparty".
There is then a claim for damages based on the cost of chartering in. The sum claimed for additional freight is US$201,495 and there is a claim for additional storage charges amounting to US$12,413.
On 4th December 1989 the defendants issued a summons to set aside service, on the ground that the court has no jurisdiction. Their case is that the proceedings ought to have been brought in Belgium, where the defendants are domiciled. They rely on Article 2 of the Convention, which 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…"
They say that Article 5(1) has no application.
The summons came before Mr Justice Evans on 16th February 1990. He decided in favour of the plaintiffs. He held that the obligation to nominate a vessel was an obligation to be performed in London, where the plaintiffs are located, and that the English court has therefore jurisdiction under Article 5(1) to determine whether the defendants are in breach of that obligation and if so, what are the consequences. There is now an appeal to this court.
Logically, the first question is whether the obligation to nominate a vessel was an obligation to be performed in England. If not, cadit quaestio. As to that, the judge said this:
"There was some issue as to whether the failure to nominate involved an obligation which called for performance in England. That is no longer, I think, a live issue, but in case it is live, the obligation to nominate in my view is clearly one calling for performance in England. The Charterers were here and I am in no doubt but that communication to them in England was provided for in the Charter Party even without the reference to brokers, through whom it might have been made."
Mr Dean, for the defendants, referred us to his skeleton argument in which it is contended that the act of nomination involves an election by the defendants, which would be dependent on a decision by their management in Belgium, and that therefore the place of performance of the obligation to nominate was Belgium, not England. Mr Dean, while not abandoning that point, did not seek to develop it. It is sufficient to say that I agree entirely with the view of the judge and regard the contrary as being unarguable.
That leads to the main question in the case. It turns on the language of paragraph 4 of the statement of claim, which I have already read. Mr Dean argues that the plaintiffs are asserting not one obligation but two, that is to say, the obligation to...
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