In National Navigation Co v Endesa Generacion SA [2009] EWHC 196 (Comm) a shipowner, National Navigation Co (National) made two applications to the English court in relation to a dispute with a Spanish electricity company, Endesa Generacion SA (Endesa). A ship owned by National was contracted to ship coal owned by Endesa to a Spanish port. The agreement was recorded in a bill of lading which stated it incorporated all the terms of the relevant charterparty. There were several charterparties all of which contained London arbitration clauses. The ship became damaged while shipping the coal and Endesa brought proceedings in Spain against National for that loss; at the same time National brought proceedings in the English Commercial Court (the Commercial Court Action) seeking a declaration that it was not liable to Endesa and that the English court was the court first seized of the dispute under the European Judgments Regulation 44/2001 (the Regulation). National subsequently commenced arbitration proceedings (the Arbitration Action) in London and sought: (i) a declaration from the High Court that the London arbitration clause was validly incorporated into the bill of lading; and (ii) an anti-suit injunction against Endesa's Spanish proceedings.
 
In relation to the Commercial Court Action, Mrs Justice Gloster held that the relevant charterparties contained arbitration clauses, and as such the English court had no jurisdiction under Article 23 of the Regulation to hear the claims. She also rejected the argument that the English court had jurisdiction by virtue of Article 5 of the Regulation on the basis that the place of performance of the agreement to arbitrate was England, because, following the ECJ decision in West Tankers (see our blog entry http://www.insurereinsure.com/BlogHome.aspx?entry=1355), such an agreement would fall within the arbitration exception of the Regulation and thus provided no grounds for the English courts to have jurisdiction.
 
Costs were awarded against National on an indemnity basis to reflect the fact that the application's "focus" was solely to establish the English court as the court first seized in circumstances where "it was extremely dubious that this court had any such jurisdiction".
 
In relation to the Arbitration Action, it was common ground that following the ECJ's judgment in West Tankers (which had not been handed down when the application was originally issued), National's application for an anti-suit injunction must fail. However, Mrs Justice Gloster granted a declaration that the arbitration clause was incorporated into the bill of lading. Although the Spanish court had decided to the contrary and this decision was within the scope of the Regulation, the English courts were not bound to recognise them in proceedings which were not themselves within the Regulation, as was the case with the Arbitration Action (which fell within the arbitration exception to the Regulation). Gloster J then proceeded to rule that English law was clearly the proper law to determine the issue as all the relevant charterparties had express or implied English choice of law clauses. According to English law, the bill of lading was clearly subject to an English arbitration clause and the fact National had commenced the Commercial Court Action was not sufficient to waive the agreement to arbitrate. Accordingly Gloster J made the declaration sought, stating that it would not offend principles of comity and commenting that, "the fact that arbitration is excluded from the scope of the Regulation means that, from time to time, there are likely to be conflicting judgments in different Member States in relation to "arbitration" issues...".
 
This case is significant in that it demonstrates that the English courts will not entertain spurious claims seeking to establish the English Court as the court first seized under the Regulation, and that indemnity costs may be awarded against claimants in these circumstances. The case also demonstrates that the English courts will not be bound to recognise European judgments made within the Regulation where the subject matter of the case before them falls outside the scope of the Regulation. In the present case, the result is conflicting decisions from the English and Spanish courts as to the incorporation of an arbitration clause into a contract. This situation raises the possibility of two competing actions on the substantive issues in this case, one in the Spanish courts and another in  arbitration in London.