In the "GOLDEN ENDURANCE", the court held that it was at least seriously arguable that an English law clause contained in an unsigned charterparty was incorporated into bills of lading, thus allowing for English proceedings to continue where there were associated foreign proceedings.
Facts
The Claimant was the owner of the "GOLDEN ENDURANCE"1 (the Vessel), which had been chartered to ship a cargo of wheat bran pellets to Morocco from three locations in Gabon (Owendo), Togo (Lomé), and Ghana (Takoradi) in June and July 2013. It became apparent, upon the Vessel's arrival at Casablanca, on 2 August 2013, that the cargo was damaged due to the presence of live insects and wet, black mould.
Each shipment was subject to its own individual bill of lading, and all provided for "freight payable as per Charter- Party dated 11 June 2013". However, the charterparty dated 11 June 2013, which was attached to an email recap, was both unsigned and only partly completed. Both, the email recap and the unsigned charterparty provided for arbitration in London and for English law.
Each of the bills of lading cited the 1978 edition of the conditions of carriage on their front pages, and then set them out on the reverse page, except for the Lomé bill, which cited the 1978 edition on its front page, but set out the conditions of the 1994 edition on the reverse.
The claim
The first, second and third defendants (subrogated insurers of the fourth defendant, the buyer) commenced proceedings against the shipowners (Claimant) in the court in Morocco, seeking a recovery in respect of the cargo damage. The claimant obtained an interim anti-suit injunction from the English Court, restraining all defendants from continuing the Moroccan proceedings. The claimant also sought a declaration of non-liability, damages for breach of the contracts of carriage resulting from the fourth defendant's failure to discharge the cargo, and a final anti-suit injunction.
In addition, the claimant commenced London arbitration in respect of the Lomé bill of lading. The arbitration was contested by the defendants who sought, before the English court, to rely on the bill's reference, on its front side, to the 1978 edition which they said did not incorporate an English law and London arbitration clause.
The defendants also challenged the English Court's jurisdiction.
Issues
Several issues were identified by the court, including (but not limited to):
- Were the defendants' correct to submit that the 1994 edition terms were not incorporated into the Lomé bill of lading, and hence, that the arbitration provisions in the email recap/unsigned charterparty could not be incorporated?
- Did the email recap and unsigned charterparty, which provided for arbitration in London and English law, govern the bills of lading?
- Could the claimant show that England and Wales was clearly the more appropriate forum to deal with the claims, and not Morocco?
Decision
Lomé bill of lading
The court held that the conditions on the Lomé bill of lading were set out clearly on its reverse. The Judge held that, if construing the bill in a business sense, the conditions incorporated were those set out in the bill itself (1994 edition), rather than those incorporated by a reference on the front page (1978 edition).
Despite there being a number of blank sections within the charterparty, it was held that none of these were significant enough to suggest insufficient consensus for there to be a contract. The Judge was satisfied that the charterparty was the document to which the conditions of carriage, on the reverse of the bills, referred. The charterparty was said to have been documented in such a way that its terms were deemed to be "readily ascertainable". This is a reference to the "EPSILON ROSA"2 which held that, in the event a bill of lading includes incorporating words, then it suffices that the charterparty has been documented in such a way that its terms are "readily ascertainable", even if no formal charterparty has been drawn up.
The court granted a final anti-suit injunction with regard to the Lomé bill of lading (1994 edition) which incorporated a London arbitration agreement.
Owendo and Takoradi bills of lading
With regard to the two remaining bills of lading (1978 edition) which were governed by English law, but which contained no choice of forum (i.e. in respect of which the London arbitration clause was not incorporated), the anti-suit injunction was denied, because the court would not restrain a party from bringing foreign proceedings on the sole ground that the foreign court would not apply the proper English law of the contract. Following the approach adopted in the "LUCKY LADY"3 and the "CHANNEL RANGER"4, the court held that England was the natural forum because the Moroccan Courts would apply the Hamburg Rules whereas the English Court would apply English law (as the law governing the contracts of carriage chosen by the parties) which would be more favourable to the owners, if it led to the application of the Hague Rules.
The court stated that the statutory incorporation of the Hague Visby Rules, by virtue of the Carriage of Goods by Sea Act 1971, had not created a separate matter of public policy (the claimant's counsel submitted that there was a public policy that the English Court should protect its jurisdiction, where a foreign court would not apply the English proper law of the contract, by reference to Lord Goff in Airbus Industrie G.I.E v Patel5), nor incorporated those rules into a kind of contractual provision which created an exception to the principles that an English law clause, unaccompanied by an English jurisdiction clause, did not ensure an English forum. Neither did it turn a choice of another appropriate forum into unconscionable conduct, or conduct evasive of English public policy.
Comment
Several points arise from the decision in this matter. Firstly, in relation to the Lomé bill, the court was not prevented from incorporating the arbitration clause of the charterparty despite the conflicting references to the 1978 conditions and the 1994 conditions. It would therefore appear that, so long as the relevant clause is set out clearly, then any potentially conflicting references to another set of conditions will not take precedence.
Secondly, the anti-suit injunction was discharged for the Owendo and Takoradi bills, but maintained for the Lomé bill of lading in support of the London arbitration agreement. The court refused to uphold the anti-suit injunction for the first two bills merely on the grounds that the foreign court would not apply the English law, being the proper law of the contract.
Finally, in relation to the Owendo and Takoradi bills, although the anti-suit injunction was discharged, it was nevertheless held that the English Court had jurisdiction and was the natural forum (not Morocco) because it would apply English law (specifically, the Hague Rules) whereas the Moroccan Court would apply Moroccan law (i.e. the Hamburg Rules), which would be less favourable to owners, and would deprive them from the benefit of their bargain. Mr Justice Burton declined to uphold the anti-suit injunction, but also refused to set aside the English proceedings in relation to those two bills, leaving the door open for both the English and the Moroccan proceedings to continue.
Footnotes
1 Golden Endurance Shipping SA v (1) RMA Watanya SA (2) AXA Assurance Maroc SA (3) WAFA Assurance SA (4) Dalia Comedex SA [2014]
2 [2003] 2 Lloyds Rep 509
3 [2013] 2 Lloyd's Rep. 104
4 [2014] 1 Lloyd's Rep. 2014
5 [1999] 1 AC 119
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