June 12 2002 The Validity of Jurisdiction Clauses in Bills of Lading Meana Green Maura & Co | Shipping & Transport - Spain Shipping & Transport Legal Background The Case Comment Legal BackgroundTraditionally in Spanish law jurisdiction clauses submitting a case to a foreign jurisdiction were only permitted when expressly accepted by both contracting parties. When referring to bills of lading, where this type of clause is usually inserted on the reverse side of the document, the clause was only considered valid if the shipper had signed the reverse side of the document. In practice this meant that jurisdiction clauses inserted or contained within bills of lading were normally not considered valid by Spanish courts.However, over the past few years jurisdiction clauses that refer specifically to European jurisdictions have started to become acceptable to Spanish courts. This is the result of the European Court of Justice's (ECJ) interpretation of Article 17 of the 1968 Brussels Convention.(1)This change in jurisprudence has recently been confirmed once more by the Provincial Court of Vizcaya in its judgment of April 16 2002.The CaseIn this case the cargo insurers sued the maritime carrier and the forwarder. The cargo forwarder responded to the claim, thus implicitly admitting the jurisdiction of the court where the claim was presented. However, the carrier filed a motion to dismiss the case for lack of jurisdiction based on the jurisdiction clause in the bill of lading, which invoked the jurisdiction of the court of the carriers' principal place of business unless the carrier were to present a claim elsewhere. The plaintiff opposed the motion based on the following main arguments: The document presented was not the original bill of lading but a non-negotiable copy that could have been drafted at any time; The parties were jointly and severally liable, and thus if one of the parties implicitly admitted the jurisdiction of a court the other parties were bound by this action; and The jurisdiction clause was not valid because it left the choice of jurisdiction to the carrier's discretion.The Provincial Court of Vizcaya rejected all of the plaintiff's arguments, basing its decision on ECJ case law. Referring to the first argument, the court ruled that there was sufficient evidence in the file to prove that the non-negotiable bill of lading was a true copy of the bill of lading, especially as it had been recognized by the shipper. The judge ruled that the contracting parties' consent to the jurisdiction clause is presumed to exist where their conduct is consistent with a usage that governs the area of international trade or commerce in which they operate and of which they are, or ought to have been, aware.As for the second argument about joint and several liability, the court ruled that the forwarder was not party to the maritime transport contract because it did not appear as shipper in the bill of lading. Therefore, it was not bound by the jurisdiction clause. As far as maritime transport is concerned, the freight forwarder acted merely as an agent of the shipper. The Vizcaya court had jurisdiction over the contract between the freight forwarder and the shipper, except for the part that referred to the maritime transport. Although Article 22 of the 1968 Brussels Convention establishes that when two actions are related consolidation is possible if the court first seized has jurisdiction over both actions, this could not be applied to this case because the courts of Vizcaya did not have jurisdiction over the carrier in this dispute. Therefore, each proceeding had to be followed in different courts.Finally, regarding the third argument the court ruled that the jurisdiction clause was valid and that there was no problem with this clause, as it merely recognized the carrier's right to present a claim in another court which did not have jurisdiction according to the disputed bill of lading. This clause was also binding on the plaintiff-insurer, as the insurer succeeded to the shipper's rights and obligations by virtue of the applicable national law.CommentThis ruling confirms others by the provincial courts of Las Palmas, Cantabria, Pontevedra, Barcelona, Valencia and Cadiz. Despite the fact that the Spanish courts have been quite slow in applying the ECJ rulings, it is clear that this change in jurisprudence, allowing the validity of jurisdiction clauses in bills of lading which defer to a European jurisdiction, is unstoppable. It is only a matter of time before the Spanish Supreme Court confirms this trend. Perhaps the only remaining issue, once the Supreme Court has taken this matter on board, will be whether the same principles can be used in a case where the Brussels Convention does not apply. For further information on this topic please contact Pedro Maura or Veronica Meana at Fernando Meana Green & Co Abogados by telephone (+34 91 432 3875) or by fax (+34 91 432 3876) or by email ([email protected]). Endnotes (1) Including judgments such as Tilly Russ, 71/83, June 19 1984, Mainsschiffahrts-Genossenschaft, C-106/95, February 2 1997, Castelletti, C-159/97, March 16 1999 and Coreck Maritime C-387/98, September 11 2000.