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):

  1. 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?
  2. Did the email recap and unsigned charterparty, which provided for arbitration in London and  English law, govern the bills of lading?
  3. 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 LADY3 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 antisuit 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.