Whitesea Shipping and Trading Corporation and Another v El Paso Rio Clara Ltda and Others (the Marielle Bolten)

JurisdictionEngland & Wales
JudgeThe Honourable Mr Justice Flaux
Judgment Date21 October 2009
Neutral Citation[2009] EWHC 2552 (Comm)
Docket NumberCase No: 2007 FOLIO 721
CourtQueen's Bench Division (Commercial Court)
Date21 October 2009

[2009] EWHC 2552 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

The Honourable Mr Justice Flaux

Case No: 2007 FOLIO 721

Between:
Whitesea Shipping and Trading Corporation and Another
Claimants
and
El Paso Rio Clara Ltda and Others
Defendants

Michael Ashcroft (instructed by Ince & Co) for the Claimants

Nigel Jacobs QC (instructed by Waltons & Morse) for the First, Second and Fourth to Sixteenth Defendants

Hearing date: 16 October 2009

The Honourable Mr Justice Flaux

The Honourable Mr Justice Flaux

Introduction

1

The Claimants seek an anti-suit injunction against the Fifth, Ninth and Fourteenth Defendants in respect of proceedings commenced by those Defendants (to whom I will refer in this judgment simply as "the insurer Defendants") against the Claimants and certain third parties in Brazil. They also seek a similar injunction against the proposed Nineteenth Defendant, another insurer which has commenced such proceedings in Brazil. So far as the application against the insurer Defendants is concerned, that was contested, at least in so far as the injunction sought would restrain the insurer Defendants from pursuing the third parties. All the current Defendants (apart from the Third Defendants, a Cayman Islands law firm named on one of the bills, against which the proceedings have been discontinued) were represented at the hearing on Friday 16 October 2009 by Mr Nigel Jacobs QC.

2

At the end of the hearing I indicated that I would grant the injunction sought against the insurer Defendants and give my reasons for doing so later. This judgment sets out those reasons. The proposed Nineteenth Defendant is another insurer which is yet to be served with the proceedings, so that the application against it was necessarily on a without notice basis. For the same reasons as set out in this judgment, the Claimants are entitled to an anti-suit injunction against it.

Factual background

3

The Second Claimant is the registered owner of the vessel MARIELLE BOLTEN ("the vessel") and the First Claimant is the demise charterer of the vessel from the Second Claimant. Together they can be regarded as the owners of the vessel, without any need for present purposes to distinguish between them. The Claimants were members, with other shipowners, of the so-called Fantasy Shipping Pool. That Pool was regulated by a Pool Agreement dated 27 October 1997. The Agreement provided that Clipper Agency AG were Pool Managers whose authority extended to concluding charterparties on behalf of members of the Pool, on terms which were based on the New York Produce Exchange form of time charter. The Agreement also provided that a company called Fantasy Shipping Pool Limited (a Bahamian company) should appear as owner in any charterparty. It is clear that that company was the vehicle through which pool vessels operated and that the company entered such charters as agent for the actual owners of the relevant vessel.

4

As contemplated by the Pool Agreement, a time charterparty of the vessel dated 2 September 2004 was entered into between Fantasy Shipping Pool Limited as owners and VOC Steel Services BV ("VOC"). That charter was for a period of 23/25 months in the charterers' option. VOC sub-chartered the vessel to Bossclip BV for a time charter trip pursuant to a fixture note dated 21 November 2005 on essentially the same terms as the head charters.

5

Pursuant to orders given by the charterers/sub-charterers, the vessel proceeded to Rio de Janiero, Brazil and loaded cargoes in respect of which four bills of lading were issued, one dated 31 December 2005 (bill 001) for discharge at Puerto Plata in the Dominican Republic and three dated 8 January 2006 (bills 002, 004 and 005) for discharge at Houston, Texas. The bills were issued on behalf of the Master by Pennant Services Maritimos Ltda (who were in fact agents in Brazil for both the Claimants and VOC) as contemplated by clause 30 of the head charter. As a matter of English law, by which all the bills were expressly governed, the bills were thus clearly owners' bills, not charterers' bills, as indeed was not challenged by Mr Jacobs on behalf of the Defendants.

6

The current Defendants are all cargo interests under the three bills issued on 8 January 2006 or (in the case of the Fifth, Ninth and Fourteenth Defendants who are the insurer Defendants) the subrogated insurers of those cargo interests. Similarly, the proposed Seventeenth and Eighteenth Defendants are the cargo interests under bill 001, and the proposed Nineteenth Defendant is the subrogated insurer of those cargo interests. It is not entirely clear from the materials before the court, but it seems likely that the trip charter between VOC and Bossclip was entered in order to fulfil shipping commitments with the cargo interests.

7

As well as being expressly governed by English law, each of the bills contained an exclusive English jurisdiction clause. So far as relevant for the purposes of the present dispute, the bills also each contained the following clauses:

"1. DEFINITIONS

f. "Subcontractor" includes stevedores, longshoremen, lighters, terminal operators, warehousemen, truckers, agents, servants, any person, firm, corporation or other legal entity who performs services incidental to the goods and/or the carriage of the goods, including direct and indirect subcontractors and their servants and agents.

3. SUBCONTRACTING

a. The carrier shall be entitled to subcontract on any terms the whole or any part of the carriage, loading, unloading, storing, warehousing, handling and any and all duties whatsoever undertaken by the carrier in relation to the goods.

b. [1] The merchant undertakes that no claims or allegations shall be made against any servant, agent, stevedore or subcontractor of the carrier which imposes or attempts to impose upon any of them or any vessel owned or chartered by any of them any liability whatsoever in connection with the goods, [2] and if such claim or allegation should nevertheless be made, to indemnify the carrier against all consequences thereof. [3] Without prejudice to the foregoing, every servant, agent, stevedore and subcontractor shall have the benefit of all provisions herein benefiting the carrier as if such provisions were expressly for their benefit, and all limitations of and exonerations from liability provided to the carrier by law and by the terms hereof shall be available to them, and in entering into this contract the carrier, to the extent of those provisions, does so not only on its own behalf, but also as agent and trustee for such servants, agents, stevedores and subcontractors.

c. The defences and limits of liability provided for in this bill of lading shall apply in any action whether the action be founded in contract or in tort."

I have retained the division of clause 3b into three numbered parts suggested by Mr Jacobs for the purposes of argument.

8

The bills also all contained a clause paramount, by virtue of which the Hague Rules applied in relation to bill 001 and the US Carriage of Goods by Sea Act 1936 (incorporating the Hague Rules) applied in relation to bills 002, 004 and 005, because the carriage was to the United States.

9

The vessel grounded off Puerto Plata in the Dominican Republic. The Claimants contend that this was due either to perils of the sea, constituted by poor weather at the time, or to error in navigation by the Master of the vessel. Either way, the Claimants contend that they have a complete defence to any claim by cargo interests by virtue of Article IV rule 2 (c) or (a) respectively of the Hague Rules. Following the grounding, joint salvors were appointed under Lloyd's Open Form and the vessel was refloated. The cargo under bill 001 was discharged at Manzanillo in the Dominican Republic and the vessel was then towed to Freeport in Grand Bahama, where she arrived on 22 February 2006. Discharge of the cargoes under bills of lading 002, 004 and 005 then commenced and was completed on 23 March 2006. Those cargoes were on-carried to the United States on other vessels in the same management as the vessel. There was no damage to any of the cargo carried under bills of lading 002, 004 and 005.

10

The Claimants had declared general average on 26 January 2006. Average Bonds were subsequently agreed with the various cargo interests and general average guarantees were provided by the cargo insurers. All those further contracts were governed by English law and were subject to the exclusive jurisdiction of the English courts. The general average adjustment took place in Hamburg and the average adjustment was issued on 30 June 2009.

11

The present proceedings were issued against the First to Sixteenth Defendants in May 2007, seeking general average and salvage charges and declarations in relation to liability against the Defendants, on the basis that as a matter of English law the Defendants have no defence to claims for general average or salvage if the cause of the incident was perils of the sea or the fault of the Master. As is accepted by the Claimants, the position would only be different if the vessel was unseaworthy and the Claimants had failed to exercise due diligence before and at the beginning of the voyage.

12

At the time that the present proceedings were issued, the current Defendants had commenced substantive proceedings against the Claimants in the Dominican Republic which the Claimants considered to be in breach of the exclusive jurisdiction clause in each of the bills of lading. Accordingly, in the Claim Form, they also sought injunctive and declaratory relief. However, after Waltons & Morse, solicitors for the current Defendants had acknowledged service on their behalf, it was no longer necessary for the Claimants to seek an anti-suit injunction at that stage, because, in February 2008,...

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