Court of Appeal confirms jurisdiction clause in bills of lading confers exclusive English jurisdiction - Hin-Pro International Logistics Ltd v Compania Sud Americana De Vapores SA [23.04.15]

Hin-Pro, a freight forwarder, entered into several contracts for the carriage of goods from China to Venezuela on the terms of bills of lading issued by Compania Sud Americana De Vapores SA (CSAV). Each bill of lading contained the following clause:

“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”.

Hin-Pro commenced several proceedings in China, alleging that CSAV had incorrectly delivered goods without production of the original bills of lading. CSAV contended that no mis-delivery had taken place, as Venezuelan law required delivery to the storage provider authorised by the Venezuelan Government.

CSAV obtained a worldwide freezing order and an anti-suit injunction against Hin- Pro. CSAV brought the present claim for damages for Hin-Pro’s breach of the jurisdiction clause in the bills of lading. The Commercial Court found against Hin- Pro. Hin-Pro appealed, contending that the clause was a non-exclusive jurisdiction clause.

Decision

The Court of Appeal unanimously dismissed the appeal, holding that:

  1. The words “shall be subject to” were imperative and directory, they did not simply provide an option. A wide number of courts might have jurisdiction over a dispute between the bill of lading holder and the carrier. It therefore made commercial sense to provide certainty by giving the English courts exclusive jurisdiction. England was the best forum for the application of its own law. In this case, the additional sentences covered situations where the first sentence is ineffective because of the application of the Hamburg  Rules (as in Chile and elsewhere) or the intended effect of an exclusive jurisdiction clause is not recognised.
  2. Use of the word “exclusive” was not essential. While in this case the clause bound and benefitted the parties in the same way, even if there were a hint of an advantage to CSAV, this would not be a good enough reason to treat the clause as non-exclusive. There was no ambiguity in the clause.

Comment

This is an important decision for carriers and cargo interests alike. It confirms the English courts will give a purposive commercial construction to split jurisdiction clauses in contracts of carriage. Cargo interests who seek to ignore such provisions run the risk of freezing orders, anti-suit injunctions, adverse judgments for damages and costs and being held to be in contempt of court.