Verity Shipping SA and Another v NV Norexa and Others (The "Skier Star")

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeMr. Justice Teare:
Judgment Date13 February 2008
Neutral Citation[2008] EWHC 213 (Comm)
Date13 February 2008
Docket NumberCase No: 2008 Folio 7

[2008] EWHC 213 (Comm)

IN THE HIGH COURT OF JUSTICE

COMMERCIAL COURT

QUEEN'S BENCH DIVISION

Before:

Mr. Justice Teare

Case No: 2008 Folio 7

Between
(1) Verity Shipping S.A. (“Owners”)
(2) Chartworld Shipping Corporation (“Managers”)
Claimants
and
N.V. Norexa and Others
Defendants

Andrew Baker QC (instructed by Jackson Parton) for the Claimants

Robert Thomas (instructed by Holmes Hardingham) for the Defendants

Hearing dates: 5 February 2008

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic

MR.JUSTICE TEARE

Mr. Justice Teare:
1

The Claimants have applied to continue an anti-suit injunction granted ex parte by Tomlinson J. on 21 December 2007 and continued on 10 January 2008 by Flaux J. The injunction prohibits the Defendants from prosecuting proceedings commenced in Antwerp on 21 January 2005. The Defendants oppose the further continuation of the injunction. Both parties are agreed that it is very desirable that my judgment be given upon the Claimants' application before 15 February 2008.

The parties

2

The Claimants are the Owners and Managers of the vessel SKIER STAR. By a voyage charterparty dated 12 December 2004 the vessel was chartered to Expofrut SA, an Argentinian company, on the 1994 Gencon form for the carriage of fresh fruit, vegetables or other compatible refrigerated cargoes from Campana to Antwerp. Bills of lading were issued in Campana dated 3 January 2005 on the Congenbill 1994 form in respect of a cargo of palletised cartons of fresh grapes and plums.

3

The Defendants claim to be the holders of the bills of lading at the discharge port and the insurers of the cargo. I shall refer to the holders of the bills as the Cargo Interests.

The contract of carriage

4

The bills of lading (headed “to be used with charterparties”) stated on their face that freight was payable as per charterparty dated December 12, 200On their reverse they stated:

“All terms and conditions, liberties and exceptions of the Charter Party dated as overleaf, including the Law and Arbitration Clause, are hereby incorporated.”

5

The voyage charterparty dated 12 December 2004 contained a Law and Arbitration clause which provided:

“This Charter Party shall be governed by and construed in accordance with English law and any dispute arising out of this Charter Party shall be referred to arbitration in London…………..”

6

There was no dispute that the time limit of one year provided by the Hague Rules or the Hague Visby Rules applied to the contracts of carriage contained in or evidenced by the bills of lading.

The discharge of the cargo

7

The cargo was discharged at Antwerp on 20 and 21 January 2005. The Belgian Federal Agency for Food Safety (“FAVV”) condemned the cargo, alleging oil vapour contamination. The cargo is said to have been worth about Euros 2.3m.

The proceedings in Antwerp

8

On 21 January 2005 a surveyor, Captain Desmet of the Nautical Commission, was appointed by the Antwerp Court at the request of the Cargo Interests. On the same day the Antwerp Court Bailiff, Guido Dupont, at the request of the Cargo Interests, served a summons on the Owners alleging that they were liable for the loss of the cargo. Also on that day the vessel was arrested and the Owners' P&I Club secured the Cargo Interests' claim.

9

On 8 February 2005 the claim was introduced before the Antwerp Court and adjourned sine die which is usual, pending the production of the surveyor's report.

10

In February and/or March 2005 the Owners started proceedings in Antwerp against FAVV seeking an indemnity in respect of any liability the Owners may have to the Cargo Interests.

11

On 28 February 2005 the Owners' Belgian lawyer Mr. De Paep sent a fax to the Cargo Interests' Belgian lawyer informing him that a writ would be served on FAVV. A copy of the writ was not served on the Cargo Interests and so they were not made aware that the writ stated that Owners

“positively dispute the jurisdiction of the Antwerp Commercial Court as well as the admissibility and the basis of the aforementioned claim, nevertheless in as far as any decision against [the Owners] would be rendered, [FAVV] should indemnify [the Owners].”

12

On 2 May 2005 the Owners' claim against FAVV was introduced before the Antwerp Court and adjourned sine die. At some stage this claim was consolidated with the Cargo Interests' claim against the Owners.

13

In December 2005 the insurers of the cargo were joined in the Antwerp proceedings as co-claimants.

14

The one year limitation period provided by Article III r.6 expired on 21 January 2006.

15

On 18 April 2006 the surveyor published his preliminary report. All parties were given permission to make comments and/or to raise questions in relation to the report by 13 June 2006.

16

By a written request dated 7 June 2006 the Owners sought an extension of time and the surveyor extended the deadline until 11 August 2006. Following a second request by the Owners the deadline was further extended until 14 September 2006.

17

On 31 August 2006 the Owners submitted their comments, asked questions and submitted further documents.

18

On 10 October 2006 the Owners requested a reply to their comments and on 20 October 2006 the court surveyor replied in part and said that other matters would be referred to Professor Van Peteghem of the University of Ghent.

19

On 7 November and 12 December 2006 the Owners reminded the court surveyor that they awaited a reply. On 18 December 2006 the court surveyor replied saying that the professor had indicated that his comments would be available by the end of January 2007.

20

On 7 March 2007 the surveyor disclosed the reply of the professor and closed his file. He submitted his report to the Antwerp Court on 13 March 2007. His report consists of 5 volumes. I was shown a translation of his conclusions which show that he considered such issues as the nature and degree of the contamination, the source of the HFO components which contaminated the cargo, the mechanism by which those components escaped from the bunker tank (a corrosion hole) and the Class history of the vessel including thickness measurements of the vessel's structures.

21

There followed a period of negotiation between representatives of the Owners and Cargo interests which did not result in agreement.

22

On 17 October 2007 the Cargo Interests' Belgian lawyer Mr. De Cocker requested the Court to set down a procedural calendar.

23

On 19 October 2007 the Owners' Belgian lawyer Mr. De Paep wrote to the Court referring to Mr. De Cocker's request for a time table for the submission of briefs and a date for the presentation of oral arguments to be fixed. He said that his clients did not object to “such procedural schedule” but asked the Court to take into account that his clients had issued a third party notice against FAVV and that the procedural time table should therefore also allow for pleadings by FAVV.

24

On 27 November 2007 Jackson Parton, the Owners' English solicitors, informed the Cargo Interests that they would seek an anti-suit injunction in England unless the Cargo Interests agreed to withdraw their claim in the Antwerp Court.

25

On 6 December 2007 the Antwerp Court fixed a time table providing for the Owners' defence to be served by 15 January 2008. Further steps in the proceedings were fixed culminating in an oral hearing on 2 December 2008.

26

On 17 December 2007 the Claimant submitted their written points of claim.

The proceedings in London

27

On 21 December 2007 the Owners sought and obtained from the Commercial Court in London an injunction restraining the Cargo Interests from taking any further steps in the Antwerp proceedings and ordering them to discontinue those proceedings on or before 15 January 2008. That date was extended until 15 February 2008 by an order dated 10 January 2008.

The basis of the claim for an anti-suit injunction

28

As a matter of English law disputes arising out of the contracts of carriage contained in or evidenced by the bills of lading in this case are required to be referred to arbitration in London.

29

At present the position in English law is that the Court has jurisdiction to grant an anti-suit injunction to enforce an arbitration clause notwithstanding that the respondent to that application has commenced proceedings in a country in the EU; see Through Transport v New India [2005] 1 Lloyds Rep. 67 and The Front Comor [2005] 2 Lloyds Rep. 257. However, the question whether such a jurisdiction is compatible with the Brussels Regulation has been referred to the European Court of Justice by the House of Lords; see The Front Comor [2007] 1 Lloyds Rep. 391.

30

The grounds on which the Court's discretion to grant an anti-suit injunction to enforce an arbitration clause are to be exercised are clear. Unless the party seeking to proceed elsewhere than in arbitration can demonstrate strong cause or good reason why it should be permitted to break its contract an injunction should issue; see The El Amria [1981] 2 Lloyds Rep. 119 and The Angelic Grace [1995] 1 Lloyds Rep. 87.

The Cargo Interests' Submissions

The risk of inconsistent decisions

31

The first “strong cause or good reason” suggested by counsel for the Cargo Interests is that there is a risk of inconsistent decisions between the arbitration in London and the Antwerp Court. That is because there are proceedings between the Owners and FAVV in Antwerp in which the Owners effectively seek an indemnity in respect of any liability they might have to the Cargo Interests. FAVV cannot be a party to the London arbitration.

32

The Owners' response to that argument is that if there is such a risk that is a risk that the Owners are willing to take as the...

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