Caresse Navigation Ltd v Zurich Assurances Maroc & Ors [2014] EWCA Civ 1366

A cargo of coal was carried by the Respondent Owners from Rotterdam to Nador (Morocco). Whilst underway, emergency cooling measures were taken to prevent the cargo combusting which allegedly caused damage to the cargo.

Owners commenced proceedings in the English High Court, seeking a declaration of non-liability. Cargo Insurers (the Appellants in the present proceedings) commenced proceedings in the Commercial Court in Casablanca, Morocco against (i) the Master, in his capacity of representative of the Owners and (ii) the port operating company.

Owners were granted an anti-suit injunction by the English High Court in support of the English proceedings and restraining the Respondents from pursuing the proceedings in Morocco. This was appealed by the Respondents.

Under the governing charterparty – on the AmWelsh 1979 form – it was stated: “This Charter Party shall be governed by English law, and any dispute arising out of or in connection with this charter shall be submitted to the exclusive jurisdiction of the High Court of Justice of England and Wales”.

The Congen 1994 bills of lading stated “…All terms, conditions, liberties and exceptions of the Charter Party, dated as overleaf, including the Law and Arbitration clause are herewith incorporated”.

The question for the Court was whether the wording contained in the bills of lading incorporated the English law and exclusive jurisdiction provision of the Charterparty.

First Instance

The judge granted the anti-suit injunction, finding inter alia:

  1. the question as to whether “arbitration” could be read as referring to “jurisdiction” was one of construction rather than incorporation. The key question was what the parties should reasonably be understood to have meant by the words “law and arbitration clause”;
  2. in this case, “arbitration” in the words printed on the bill of lading should be read as “jurisdiction” because this was the only interpretation which the parties could have intended when transposing this wording into the bills of lading; and
  3. such a finding does not conflict with the need for clarity and certainty when incorporating terms into bills of lading, because the wording incorporated was usual in the trade and reflected the intentions of the parties.

Court of Appeal

The Court of Appeal concurred with the decision reached by the High Court, dismissing the appeal and upholding the anti-suit injunction.

Comment

There has traditionally been a reluctance by the English Court to incorporate charterparty terms into bills of lading on the basis that the bills may come into the hands of parties unaware of such charterparty terms. However, where the intention of both parties is clear – as in this case by the use of industry-standard wording – the Court will be prepared to show flexibility to accommodate this.