UK: Commercial Court Rules On Scope Of London Arbitration Clause In Bill Of Lading

Last Updated: 7 October 2010
Article by Daniel Jones and Jo Stephens

Louis Dreyfus Commodities Kenya Limited v Bolster Shipping Company Limited (Giorgis Carras)
[2010] EWHC 1732 (Comm)


Louis Dreyfus Commodities Kenya Limited ("LDCK") were named as the shipper of 5,000 tonnes of grain under a bill of lading dated 10 March 2007 ("the Bill of Lading"). The carriers under the Bill of Lading were Bolster Shipping Company Limited ("Owners"), who were the registered owners of the vessel, the Giorgis Carras, in which the grain was carried. There was a chain of sale of the grain from LDCK downwards. The consignee of the cargo in the Bill of Lading was identified as a Mexican company, Suministros de Maiz del Mayab S.A. de CV ("Suministros").

The vessel was chartered from Owners by a company in the same group as LDCK on an amended New York Produce Exchange Form. That time charter contained an arbitration provision as follows:-

"17. That should any dispute arise between the Owners and the Charterers, the matter in dispute shall be referred to Arbitration in London in accordance with Arbitration Act 1994 (sic) and any subsequent alterations (see Clause No. 64).


Clause 64

With reference to Clause 17, it is agreed that all disputes or differences arising out of this contract which cannot be amicably resolved should be referred to Arbitration in London.


This contract is governed by English law and there shall apply to all proceedings under this Clause the terms of the "London Maritime Arbitrators Association" current at the time when the Arbitration Proceedings were commenced".

It was common ground between the parties that the Bill of Lading successfully incorporated the charterparty arbitration clauses set out above.

When the vessel arrived at the discharge port in Mexico, samples were taken from the cargo holds for analysis. The consignees, Suministros, asserted that there was a "quality cargo damage". They alleged a difference between the quality of the samples drawn at the discharge port and the description of the cargo on an SGS Certificate of Quality from the loadport. Suministros then commenced proceedings in Mexico ("the Mexican proceedings") against a number of parties, namely: the sellers directly above them in the chain (not LDCK); the insurers of the cargo; Owners (as the owners of the vessel which carried the cargo); and the managers of the vessel. Suministros claimed damages of just over US$800,000 on the basis that the cargo was unfit for human consumption.

Owners then joined LDCK as a party to the Mexican proceedings, and alleged that they were not liable under the contract evidenced by the bill of lading for pre-shipment damage. LDCK stored the cargo pre-shipment.

LDCK applied to the English court for an anti-suit injunction restraining LDCK from being joined into the Mexican proceedings on the grounds that such joinder constituted a breach of the arbitration clause contained in the Bill of Lading to which both Owners and LDCK were a party, because London arbitration was the correct forum for the relevant disputes arising out of the Bill of Lading.

Arguments and considerations by the Court

The English court looked in some detail at the purpose of the Mexican proceedings. Expert evidence was presented on Mexican law by both parties. Mexican law evidence was heard on the apparent differences between a "mere third party" and an "interested third party". Owners submitted that LDCK being joined into the proceedings did not necessarily mean they would be bound by a judgment. The English court looked at Owners' purpose in seeking to involve LDCK in the Mexican proceedings. One aim of Owners was to ensure that information and documents which would enable Owners "to make good their case as to the condition of the cargo on shipment" were available to the Mexican court.

LDCK argued that their being joined in the Mexican proceedings meant that Owners were essentially asking the Mexican court to render a judgment against LDCK, or at the very least that LDCK would be bound by the Mexican court's judgment.

Owners pointed out that they made no claim against LDCK and, whilst they accepted that they were seeking to deflect liability from themselves, they denied that they were seeking to deflect responsibility onto LDCK. Owners did not assert that LDCK were liable to Suministros for the damage to the cargo. There was no claim by Owners against LDCK in the Mexican proceedings. Owners did not accept that they were inviting Suministros to bring a claim against LDCK and pointed out that there is no obvious cause of action upon which Suministros could rely against LDCK.


In his judgment, Mr Justice Tomlinson stated that, even if Owners had been suggesting that Suministros should claim against LDCK, "[a] party to an arbitration clause does not undertake to his contractual partner that he will not, if sued by a third party, suggest that it is to the contractual partner that a third party should rather look for recompense". Mr. Justice Tomlinson found that Owners were not inviting the Mexican court to resolve a dispute between themselves and LDCK; Owners did not assert a claim against LDCK; and they did not identify any dispute between themselves and LDCK arising out of the contract. There was therefore no issue arising between the two parties "as to which the judgment of the Mexican court could in any real sense be binding as between them".

Accordingly, Mr. Justice Tomlinson did not consider that the conduct of Owners amounted to a breach of the arbitration clause under the bill of lading and therefore he refused LDCK's application for an anti-suit injunction.


This case suggests that the English court will carefully consider the nature and purpose of the foreign proceedings in question in order to consider whether there has been a breach of an arbitration clause in a contract. The judgment shows that the presence of a London arbitration clause does not automatically mean that a party bound by the arbitration clause in a contract may not in certain circumstances find themselves involved in foreign proceedings arising out of the contract in question. It depends on the nature of the foreign proceedings, and the reason for the party being joined into those proceedings. In some circumstances, such as where the other party is not actually asserting a claim against them and there is therefore no dispute between the two parties who have made the arbitration agreement, an anti-suit injunction may not be granted.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.