UK: When An English Jurisdiction Clause In A Bill Of Lading Will Be Deemed Exclusive

Last Updated: 13 February 2015
Article by Max Cross and Reema Shour

Compania Sud Americana de Vapores SA v. Hin-Pro International Logistics [2014] EWHC 3632 (Comm)

The facts of the underlying dispute in this case are less interesting than the Court's findings that the English law and jurisdiction clause in the bills of lading was an exclusive jurisdiction clause and consequently that a permanent anti-suit injunction should be granted in relation to proceedings brought by cargo interests in China under the bills. Of particular relevance in the Court's opinion was the fact that, in agreeing to English law as the governing law of the bills, the parties should also be taken to have intended that the English courts should have exclusive jurisdiction. This is a particularly interesting decision, given that the jurisdiction clause in question provided for other courts to have jurisdiction in certain circumstances.

The background facts

The original claim was one for mis-delivery of goods. Hin-Pro, a Hong Kong freight forwarder, alleged that the carrier, CSAV, wrongly delivered cargo without production of original bills of lading in various ports in Venezuela. The shipments in question were all from China to Venezuela and on CSAV bills. The bills were straight bills naming CSAV's Venezuelan agents, Raselca, as consignee. Only some, not all, the bills named Hin-Pro asshippers. Nonetheless, Hin-Pro claimed to be an original party to the contract of carriage contained in each bill (which numbered about 70 in total).

In Chinese proceedings brought by Hin-Pro, CSAV contended that, under Venezuelan law, cargo had to be delivered to the storage provider authorised by the Venezuelan Government in almost all cases and that CSAV were therefore legally obliged under Venezuelan law to deliver the goods to the authority which then had sole control over the goods. The bills they issued specifically provided for this eventuality and CSAV said that the goods had all eventually been on-delivered to the buyers by their local agents. Indeed, no claim had been brought by any of those buyers.

CSAV subsequently sought and obtained both an anti-suit injunction and a worldwide freezing order against Hin-Pro from the English Commercial Court. The matter then came back before the Court, which was asked to make the anti-suit injunction permanent and to award CSAV damages in respect of Hin-Pro's breaches of the jurisdiction clause in the bills.

Clause 23 of the CSAV bills provided as follows:

"Law and jurisdiction.

This Bill of Lading and any claim or dispute arising hereunder shall be subject to English law and the jurisdiction of the English High Court of Justice in London. If, notwithstanding the foregoing, any proceedings are commenced in another jurisdiction, such proceedings shall be referred to ordinary courts of law. In the case of Chile, arbitrators shall not be competent to deal with any such disputes and proceedings shall be referred to the Chilean Ordinary Courts."

The Commercial Court decision

The Judge considered whether or not, by this clause, the parties had agreed to the exclusive jurisdiction of the English Court, with the result that the proceedings in China amounted to a breach of contract. He decided that they did, because English law was the mandatory governing law of the bills and the parties must therefore also have intended that the English courts should have exclusive jurisdiction. In his view, the English courts would be seen by the parties as best able to apply the provisions of English law which the parties agreed to be applicable in the circumstances. On the Judge's interpretation of the clause, it was not simply an agreement to submit to the English Court's jurisdiction, which could be read as allowing proceedings to be brought elsewhere, but actually required that claims and disputes arising under the bills be determined in accordance with English law by the English Court.

The Judge also commented on the fact that the second and third sentences of the clause provided for different courts to have jurisdiction in different circumstances. He said that the clause as a whole had to be seen in light of the clause paramount in the bills, which provided for the application of the Hague Rules, save in three situations:

  1. Where, as a matter of English law and the English COGSA 1971, the Hague-Visby Rules are compulsorily applicable;
  2. Where there are shipments to and from the US, in which case US COGSA is to apply; and
  3. Where the bill of lading is subject to legislation which makes the Hamburg Rules compulsorily applicable.

The Judge concluded that the second and third sentences of the jurisdiction clause were intended to provide for the situation where proceedings are brought elsewhere than in England. Notwithstanding the choice of English law and English jurisdiction, therefore, US COGSA or the Hamburg Rules might apply in certain circumstances (e.g. Chile, where CSAV is incorporated, applies the Hamburg Rules, which contain their own jurisdiction provision). The second and third sentences of the clause provided, therefore, a fall-back defence, in the event that the English law and jurisdiction clause proved ineffective in some foreign courts. The third sentence was, however, (based on evidence put before the Court) ineffective as a matter of Chilean law. So any proceedings begun in Chile against CSAV would have been in breach of clause 23 and, similarly, the Chinese proceedings were also in breach of the exclusive English jurisdiction clause.

The Judge held that there was a good arguable case that fraud was being perpetrated in relation to the Chinese proceedings and he made the anti-suit injunction permanent. He also awarded CSAV damages for breach of the exclusive jurisdiction clause in the amount of any sums awarded to Hin-Pro in China.

Comment

Although the word "exclusive" did not appear anywhere in the English law and jurisdiction clause in the bills of lading, the Court still came down in favour of exclusive English Court jurisdiction. This was not a foregone conclusion, however, and, for the avoidance of doubt, it is always worth specifying expressly that a particular jurisdiction should be "exclusive" if that is what the parties want.

It should be noted that Hin Pro did not participate in the proceedings and the Court did not therefore have the benefit of any submissions which they might otherwise have made.

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 Mondaq.com.

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

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (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 www.mondaq.com

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 Mondaq.com’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.

Disclaimer

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.

Registration

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 unsubscribe@mondaq.com 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.

Cookies

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.

Links

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.

Mail-A-Friend

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.

Security

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 webmaster@mondaq.com.

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 EditorialAdvisor@mondaq.com.

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 enquiries@mondaq.com.

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