Saldanha v Fulton Navigation Inc

The Claimants commenced proceedings and obtained permission to serve the claim form out of the jurisdiction. Before that happened there had been correspondence between the Claimant's solicitor and Gard (UK) Limited ("Gard"), the representatives of the Protection and Indemnity Insurers of the vessel. Gard are based in London. The purpose of the correspondence was to enquire whether the Owners would appoint London solicitors and whether there was any dispute as to the geographical position of the vessel at the time of the Claimant's injury. Gard indicated that service was to be made on the Owners. They did not take exception to the ship's position as proposed.

According to the affidavit of service made by Philip Okney, an attorney licensed to practice in the Marshall Islands, the Claim Form (and other necessary court documents) was served

The documents were then sent to Omega, the ship's managing agents in Piraeus. Apparently Omega had moved office to Athens and there is a question as to whether the documents were received in Greece. There is a receipt for the documents at the Piraeus office dated 6th July 2010 the documents do not appear in the log book of documents received by the Piraeus office. Omega contend that it did not receive the documents. No acknowledgment of service or challenge to the jurisdiction was made and judgment was entered in August 2010. A copy of that default judgment came the attention of the Defendant's P&l insurers on the 8th December 2010. On the 29th December 2010 the Defendant issued the application seeking (i) a declaration that the Court has no jurisdiction to hear the claim; (ii) a declaration that the Court will not exercise its jurisdiction in respect of this claim and (iii) an order that the judgment will be set aside. On the 22nd February 201 1, Thomas Cooper, the Defendant's solicitors in England, signed an acknowledgment of service indicating an intention to defend the claim and an intention to contest the jurisdiction.

The application raises the following issues:

This claim is brought in tort. By Practice Direction 6B paragraph 3. I •

The Claimant's case is that when the injury occurred the vessel was lying in a position

Mr. Weir QC. submitted that is an end of the matter because the accident occurred within the territorial waters of England and Wales and that this fact is not disputed. On the face of the Practice Direction referred to above that appears to be right however Mr. Doherty has drawn attention to the definition of jurisdiction under CPR Part 2.3, which provides:" in these Rules

Mr. Doherty accepted that jurisdiction in the present case is not governed by Brussels I but he submitted that it is desirable that English Common law rules are aligned with European rules. He also submitted that Regulation (EC) No. 864/2007 of the European Parliament of the Council of I l July 2007 ("Rome Il") applies to cases where a choice of law was available. He therefore submitted that, under Brussels l , if an accident wholly internal to a ship was held to have occurred in the flag state of the ship then the same interpretation should hold under Rome Il. Thus he submitted that if the damage happens in the flag state for the choice of law purposes it should also be held to have occurred in the flag state for jurisdictional purposes. It should be noted that, unlike the present case, the Danmark case was concerned with matters arising within the jurisdiction of the European Court. It is also to be noted that it involved a claim in tort against a Swedish trade union in respect of a Danish ship which was trading between England and Sweden. In that case it is not clear where the tortious act or acts took place. A further problem is that Mr. Doherty's argument lacks cohesion. On his own argument Brussels I suggests that the flag state may be taken into account when considering the jurisdictional aspects but it does not rule out other factors. Nor do I think that the same criteria need necessarily be applied to issues of jurisdiction as to the choice of law. In any event the European rules do not apply to the present situation and Mr. Doherty has been unable to point to any English authority which suggests that, in circumstances such as the present, they should. It is also worth noting that principles of international comity apply not only within Europe but also upon a worldwide basis, particularly with respect to maritime law.

Mr. Weir submitted that the authorities and learned books strongly suggest that Mr.Doherty's submissions were not well founded. Thus in Booth v. Phillips [2004] EWHC 1437 it was held by Mr. Nigel Teare Q.C., as he then was and sitting as a Deputy High Court Judge, that where an English seaman died onboard a vessel in Egypt the damage had partially arisen in England because that was where his and estate had suffered some of the damage. It was held that the English Court had jurisdiction. In that case the ship was not registered in the United Kingdom nor was the seaman employed by an English Company but the master (the first Defendant) was domiciled in England. The owners were Liberian and the ship management company was Jordanian. It is to be noted that the court held that there were real issues against the first Defendant and that, therefore, the second, third and fourth defendants were proper parties. In Cooley v. Ramsey [2008] EWHC 129, Tugendhat J. held, citing the judgment in Booth v. Phillips with approval, that the English court did have jurisdiction in a case where an Englishman had been injured in New South Wales but had returned and, being disabled, had continued to suffer financial loss in England.

In MacKinnon v. Iberia Shipping Co. Ltd. [1954] 2 Lloyds Rep 372 (Court of Session) it was held that where a tortious act had occurred on a United Kingdom ship (registered at a Scottish port) within the territorial water of the Dominican Republic the event should be taken to have occurred in the Dominican Republic and not Scotland. The issue was whether solatium, which is a remedy peculiar to Scots law, could be recovered in circumstances where the injury had taken place in the waters of the Dominican Republic. The Courts held

Mr. Doherty submitted that the decision in MacKinnon v. Iberia Shipping Co. Ltd is not binding. It is true that the main issue was the applicable law but it considers a number of aspects which have been raised by the parties in the present case and, since it was a decision of the Inner House which approved and applied the approach of earlier decisions of the Privy Council and of English courts there can be little doubt that it is persuasive. For these purposes I take the ratio of the decision in MacKinnon to be that the law of the flag state is applicable where a ship is in International Waters but not once it has entered territorial waters.

Mr. Weir Q.C. referred to the decision of the New South Wales Court of Appeal in Union Shipping New Zealand v. Morgan [2002] 54 NSWLR 690 in which it was held that where a tort was committed entirely onboard a foreign ship in the process of unloading and whilst moored in the territorial waters of New South Wales then the law of the littoral state (NSW) not the law of the flag applied. At paragraph 55 of his judgment Heydon JA said:

Mr. Weir has also drawn attention to the editions of Dicey, Morris and Collins on the Conflicts of Laws [1 4th Ed., 2006] and Cheshire, North and Fawcett, Private International Law [14th Ed., 2008]. In paragraphs 35-068 to 35-076 of Dicey, Morris and Collins considers Maritime torts and distinguishes between those committed on the high seas and those in territorial waters. With respect to cases which are internal to a single ship, such as an injury occurring onboard a ship, it is said that the relevant law is that of the place at which the vessel is registered. With respect to acts committed in territorial waters the learned authors have recognised there was an argument that, where an act is committed onboard a ship at anchor in or passing through territorial waters which had no connection with the littoral state, the law of the ship's flag should apply. However the learned authors submit that the provisions contained in Part Ill of the Private International Law (Miscellaneous Provisions) Act 1995 c. 42 should apply. Section I I of that Act provides:

Conclusion. For the reasons set out above I consider that Mr. Weir's submission is correct and that CPR Practice Direction 6B Paragraph 3. I (9) requires consideration of the physical location of the ship when the act was committed which gave rise to the damage sustained. That was in Welsh waters. I do not accept Mr. Doherty's argument that the context requires that the law or the jurisdiction of the flag state should be applied and, in my view, for the reasons set out above, the surrounding circumstances entirely support the opposite conclusion.

Further CPR Practice Direction 6B Paragraph 3.1(9) alternatively allows consideration of where the damages was suffered. In my view there can be no doubt that a considerable portion of the continuing pain and suffering occurred when the claimant was hospitalised within the jurisdiction and that following Booth v. Phillips that is sufficient to found jurisdiction. In my judgment both limbs of the paragraph 3.1(9) are applicable. The court therefore has jurisdiction to entertain the claim however there is still the question of whether the court should nonetheless exercise its discretion in accordance with the principles offorum non conveniens.

Mr. Doherty correctly refers to the principles set out in Spiliada Maritime Corp. v. Cansulex Lld [1987] A.C. 460 however he now finds himself in the rather strange position of having initially argued that the appropriate jurisdiction is the Marshall Islands nonetheless submitting that the appropriate forum is India. He gives a number of reasons as to why there are relevant Indian connections including the fact that the employment contract was subject to the law of India. However the claim is made in tort and, for reasons already given above, the relevant law to be applied is the littoral law, namely that of England and Wales. In the event that Indian law does prove to be relevant it may be proved by expert evidence. Similarly with regard to the issue of the Indian witnesses. Mr. Doherty submits that they will all be Indian. With respect to the factual aspects leading up to the accident itself this may, assuming that the present judgment is set aside, be true but it also seems to me that such issues as there may be will be restricted to the situation in which the vessel was when the anchor began to drag, the advisability of sending the claimant forward, whether it should have been avoided, whether the claimant should have been provided with better equipment and other aligned matters. The reality is that these relate to matters of seamanship upon which the ship's master, who I understand to be Indian, might be expected to give evidence but it seems unlikely that there will be other witnesses who will need to give oral evidence. The Admiralty Court is well used to considering matters of seamanship and it is unlikely that it will be faced with any difficulties dealing with the type of issues which might arise in this case. Insofar as there may be issues arising under Indian law Mr. Weir Q.C. has pointed out that the defendant's own expert on Indian law accepts that the claim as presently pleaded could succeed in Indian law. In those circumstances it is difficult to see why there is any greater convenience in having the matter heard in India rather than in England.

Mr. Doherty further submitted that there was no strong connection to England. I disagree. The incident occurred in bad weather conditions off the Welsh coast and the appropriate steps which should have been taken will need to be considered against that background. Furthermore a significant part of the Claimant's medical treatment took place in England. The expert medical evidence which will be necessary is largely available in England and not in India. At present the injuries are not admitted and therefore the medical evidence may be considered to be in dispute. Either the claimant will need to prove his case having instructed new medical experts in India or transport his experts to India. Weighing these matters in the balance I am persuaded that England is the proper forum for the determination of this claim.

The reality is that the Defuldant has raised the issue of jurisdiction in the sense that it has challenged the propriety of permitting the service of the claim form out of the jurisdiction. That has meant that the necessary considerations relating to jurisdiction have, in fact, been considered but decided against the Defendant. In the circumstances further consideration as to whether the Defendant should have been allowed to raise the point when it did would seem pointless. However as a matter of completeness it is to be noted that Mr. Weir Q.C. pointed out that the Defendant should have filed an acknowledgment of service but this had not been done and which, in turn, affected the timing of the application. Mr. Weir Q.C. submitted that, in the circumstances, the Defendant's difficulties were of its own making. In fact I was provided with a copy of a completed form of an acknowledgment of service dated the 22nd February 201 1. I do not know whether that has been filed. However Mr. Weir did not take serious exception to the Defendant being allowed to argue the jurisdiction issue or even the application to set aside judgment. Whether to allow the defendants to do so is a matter of discretion. It seems to me that, although there was proper service, the claim form may not have reached GARD. It is probable that this was caused by defective systems within the Defendant's own organisation. Nonetheless once the Defendant and Gard had become aware that a judgment had been entered the reaction took place within a reasonably short time. Mr. Weir Q.C. also points out that the application should have been to extend time for filing an acknowledgment of service in conjunction with an application under CPR Part l l . Nonetheless I take the view that the Defendant did seek to act promptly within the spirit of CPR Part 13.3(2) and, had it been necessary I would have allowed the Defendant the extra time to take the jurisdiction point as, in fact, occurred. For the purposes of CPR Part 13.3(2),

The principles The Defendant must show a reasonable prospect of successfully defending the claim and it is not enough to simply show an arguable defence. In ED&F Man Liquid Products Ltd v. Patel [2003] EWCA Civ 472 Potter L.J. said:

The case pleaded in paragraph 7 of the Particulars of Claim alleges that the injury arose by reason of breaches of the duty of care or negligence by the Defendant, his servants or agents. The Particulars pleaded in paragraphs 7.1 to 7.7 largely relate to the safety of the Claimant whilst he was on deck. The Particulars in paragraphs 7.8 to 7.12 are concerned with the how the difficult or dangerous situation arose, namely allowing the vessel to remain at anchor in weather conditions where there was a real prospect of the anchor dragging. Both Mr Weir

Mr. Doherty submits that there is real prospect of successfully defending the claim. In his skeleton he has submitted:

Mr. Doherty has also submitted that although Mr. Weir Q.C. says that the accident raises an inference of negligence that is disputed. Mr. Doherty then goes on to consider whether the nature of the work to be done on deck raised a potential risk and whether that risk was unreasonable. He says that if the work was to be done was done it is not obvious how harnesses etc. would have prevented the injury and that decisions on these aspects cannot to be made until the evidence has been heard. Mr. Doherty submitted that "The Defendant will say that the activity was not a high risk one and that no risks were run which were not reasonably necessary and proportionate to the importance of the ends to be achieved. This defence is far from fanciful."

Although Mr. Doherty sought to persuade the court that there is a defence with respect to the risks of the claimant going on deck, in my judgment, he failed to persuade me that this is an appropriate case for the default judgment to be set aside. There are two reasons for coming to this conclusion. Firstly for the Defendant to say that such case as he has raised is 'far from fanciful' is akin to saying that he has an 'arguable defence'. That is insufficient to satisfy the test of whether 'the defendant has a real prospect of successfully defending the claim'.

Mr Weir Q.C has submitted that the accident raises an inference of negligence and, in my view, he is correct. The Defendant has admitted that the situation was one where the vessel began to drag. There is a long line of authority which holds that this places the burden of explaining how that came about without negligence on the owners of the dragging vessel. In The Owners the Bowditch v Owners d the Po (The PO) [1991] 1.L.Pr. 245 Mr. Justice Sheen at first instance said (at paragraph 24):

Further in The Pori Victoria.[1902] P. 25 The President (Sir F. H. Jeune) said:

In The Velox [1955] I Lloyd's Rep. 376 two vessels had sheltered in a loch and during a storm of exceptional severity the defendants' vessel had dragged her anchors and collided with the plaintiffs' vessel. Willmer J. held that in the exceptional weather good seamanship required exceptional precautions, which the defendants' vessel had failed to take.

In my judgment it is for the Defendant to provide a rational explanation of how the dangerous situation arose without negligence on the part of the Defendant's servants. Lacking any such explanation the Defendant has totally failed to establish that it has any, let alone a reasonable, prospect of successfully defending the claim.

Conclusion. The present judgment against the Defendant will not be set aside.