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.


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.

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