Golden Endurance Shipping SA v RMA Watanya SA & Ors

The dispute underlying these proceedings concerns damage to a cargo of 6,489.95 mt of wheat bran pellets shipped to Morocco on the claimant’s vessel, Golden Endurance (“the Vessel”), in June and July 2013. The cargo was loaded at Owendo (in Gabon), Lomé (in Togo) and Takoradi (in Ghana) and was the subject of three separate bills of lading, one issued at each of those ports, each providing that freight was payable “as per Charter-Party dated 11 June 2013”.

On the Vessel’s arrival at Casablanca on 2 August 2013 the cargo was found to be damaged by the presence of live insects and wet and black mould. Discharge commenced on 27 August but stopped on 31 August 2013 when approximately 4,168 mt of the cargo remained on board.

The first to third defendants (“the Insurers”) are the subrogated insurers of the fourth defendant, the cargo receiver (“the Receiver”). On 2 September 2013 the Insurers procured that the Vessel was arrested, seeking security for US$1,010,713.32 in respect of damage to the cargo, security which the claimant duly provided on 30 September 2013 in the form of a guarantee from Moroccan Bank for External Commerce (“MBEC”). The Vessel sailed from Casablanca on 6 October 2013. The remaining cargo was subsequently discharged and sold at Cadiz.

The dispute gave rise to a multiplicity of proceedings. On 25 March 2014 the Insurers brought a cargo claim against the Master of the Vessel and MBEC in the Commercial Court of Casablanca (“the Moroccan proceedings”). On 4 July 2014, the claimant commenced these proceedings against the Insurers and the Receiver, seeking a declaration of non-liability, damages and an anti-suit injunction. On 14 October 2014 the claimant commenced arbitration proceedings in London against the Insurers and the Receiver in respect of the cargo carried under the Lomé bill.

On 25 November 2014 Burton J (i) granted an anti-suit injunction in respect of the cargo carried under the Lomé bill, restraining proceedings other than before arbitrators in London, (ii) dismissed the Insurers’ challenge to the jurisdiction of the English court in respect of the claims relating to the cargo carried under the Owendo and Takoradi bills, but (iii) refused to grant an injunction to restrain the Moroccan proceedings in so far as they related to the cargo carried under those two bills: see The Golden Endurance [2014] 1 Lloyds’ Rep 266. As Burton J recognised, with regret, the result was that all three sets of proceedings remained on foot (see [47]).

On 24 February 2015 judgment was pronounced in the Moroccan proceedings, awarding the Insurers damages of 8,439,943.83 Dirhams in respect of the cargo carried under the Owendo and Takoradi bills (“the Moroccan Judgment”). The Moroccan Judgment was confirmed in writing on 10 April 2015. An appeal by the Master of the Vessel and the claimant was rejected on 17 March 2016 as being out of time (in the case of the Master) and by a non-party (in the case of the claimant).

This judgment determines the following:

The above issues were argued between the claimant, represented by Mr Collett QC, and the Insurers, represented by Ms Wells. The Receiver has not acknowledged service of these proceedings and has played no part in them. The claimant therefore sought permission pursuant to CPR 24.4(1) to include the Receiver in its application for summary judgment. As the Receiver was notified of the application and the hearing but chose not to appear (no doubt because it has transferred its relevant interests to the Insurers) and in any event cannot be in any better position that the Insurers in respect of the application, it is appropriate to grant such permission.

Burton J summarised the relevant provisions of the three bills of lading as follows:

“11.

…, the Lomé Bill is on its front page headed up, in the left hand corner “Code Name: ‘CONGENBILL’: Edition 1978”: but on the reverse page, which sets out the Conditions of Carriage, it is recorded “To be used with charter-parties Code Name ‘CONGENBILL’ Edition 1994”. Those Conditions of Carriage recite:

“(1)

All terms and conditions, liberties and exceptions of the Charter- Party, dated as overleaf, including the Law and Arbitration Clause, are herewith incorporated.

(2)

General Paramount Clause

(a)

The Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels the 25^th August 1924 as enacted in the country of shipment shall apply to this Bill of Lading. When no such enactment is in force in the country of shipment, the corresponding legislation of the country of destination shall apply, but in respect of shipments to which no such enactments are compulsorily applicable, the terms of the said Convention shall apply.

(b)

Trades where Hague-Visby Rules apply. . . ”

12.

The Owendo and Takoradi Bills are in identical form. They both provide similarly in the top left hand corner of the first page by reference to the 1978 Edition and on the reverse page recite the Conditions of Carriage (by reference to the 1978 Edition). The Conditions of Carriage record:

“All terms and conditions, liberties and exceptions of the Charter-Party, dated as overleaf, are herewith incorporated. The Carrier shall in no case be responsible for loss of or damage to cargo arisen prior to loading and after discharging.”

The General Paramount Clause is then recited in identical terms to that set out above, and there is also a provision relating to the application of the Hague-Visby Rules, not relevant in relation to any of these three Bills.”

Burton J found, at least to the standard of a good arguable case, that:

The hearings before me proceeded on the agreed assumption that the Owendo and Takoradi bills are indeed governed by English law and that the Hague Rules are applicable as a matter of that governing law. That is in contrast to the position in the Moroccan proceedings: it is common ground that Moroccan law expressly provides that the Hamburg Rules are automatically incorporated into such contracts of carriage, ousting any contractual provision to different effect.

On 15 July 2014 the claimant filed a Rebuttal Memorandum in the Moroccan proceedings, asserting that each of the three bills of lading incorporated a London arbitration clause so that the court did not have jurisdiction to hear the claim. Consequently, the claimant stated, the claim was not “formally acceptable”. The claimant then raised a number of defences to the claim, each expressed to be “as a precaution”. No mention was made of the fact that the claimant had commenced these proceedings in the Commercial Court in England.

The claimant served its Particulars of Claim in these proceedings on 7 August 2014. In contrast to the position taken in the Moroccan proceedings, the claimant did not assert that the Owendo and Takorado bills incorporated an arbitration clause, making

At the hearing of its application for an anti-suit injunction before Burton J on 11 November 2014 (interim injunctions having been granted on an ex parte basis by Eder J on 2 July 2014), the claimant sought an injunction in respect of the dispute as to the cargo carried under the Lomé bill on the ground that that bill incorporated a London arbitration clause, a contention which was upheld on 24 November 2014 (for the reasons set out above) and an injunction granted. The claimant did not contend that the other two bills incorporated arbitration clauses, but instead sought an injunction to restrain the continuation of the Moroccan proceedings relating to the cargo carried under the Owendo and Takoradi bills on the ground that those proceedings were vexatious and oppressive given that (i) England was clearly the appropriate forum, a forum where the Hague Rules would be applied; (ii) Morocco, in contrast, would apply the Hamburg Rules and (iii) a parallel dispute was proceeding in London arbitration under the Lomé bill.

Burton J accepted that England was clearly the more appropriate forum for the disputes arising under the Owendo and Takoradi bills as English law was assumed to govern them [36], rejecting the Insurers’ challenge to the English jurisdiction, but also rejected the contention that the Moroccan proceedings were vexatious or oppressive in the absence of an exclusive English jurisdiction clause, in so doing dismissing the suggestion that there is a public policy in favour of the Hague or the Hague-Visby rules which requires protection against proceedings in jurisdictions where those rules are dis-applied by local law [46].

The Insurers duly complied with the anti-suit injunction, withdrawing their claim in the Morocco proceedings in so far as it related to the cargo carried under the Lomé bill.

On 28 November 2014, with leave of Burton J, the claimant served Amended Particulars of Claim in these proceedings, adding the assertion that the claimant is discharged from liability by reason of the time-bar in Article III Rule 6 of the Hague Rules. On 23 December 2014 the Insurers, having served a fresh acknowledgment of service following the rejection of their challenge to the jurisdiction, served a Partial Defence, addressing solely the time-bar issue.

By application notice dated 8 January 2015 the claimant sought summary determination of its contention that its liability for cargo damage had been extinguished. That application was argued before me on 23 February 2015, following which I reserved judgment.

The following day the Moroccan Judgment was pronounced. The Commercial Court of Casablanca first determined that, as the Owendo and Takoradi bills of lading did not contain a special annotation providing for arbitration, the claimant could not rely on the arbitration clause in the charterparty as against parties who had acquired the bills in good faith, applying Article 22(2) of the Hamburg Rules. Having rejected the claimant’s primary complaints as to the “form” of the proceedings, the Casablanca court dealt with the “substance”, finding in the Insurers’ favour.

The Insurers, by letter to this court dated 27 February 2015, asserted that the Moroccan Judgment provided a defence to the claim in these proceedings: the claimant disputed that assertion, but accepted that the existence of the Moroccan Judgment provided an arguable defence to its claim unless and until the issue of recognition of the Moroccan Judgment was determined.

On 6 May 2015 the claimant filed an appeal against the Moroccan Judgment, reiterating its position that the Insurers’ claim should not have been “accepted” on the grounds that the Owendo and Takoradi bills incorporated arbitration clauses and, in the alternative, challenging the substantive findings of the Casablanca Commercial Court. In support of the appeal the claimant made the following incorrect statements:

At a further hearing in these proceedings on 27 July 2015, and in the light of further evidence served by the parties, I gave directions for the determination of a preliminary issue as to the effect of the Moroccan proceedings and the Moroccan Judgement on the claimant’s claims in these proceedings, permitting the Insurers to amend their Partial Defence to set out their case in that regard and the claimant to serve a Reply.

Pursuant to those directions, on 14 September 2015 the Insurers amended their Partial Defence to plead that the Moroccan Judgment was a judgment of a court of competent jurisdiction, was made between the same parties as the parties to these proceedings and decided the same issues. The pleading continued:

“6.

It is further averred that the Owners have submitted to the jurisdiction of the Casablanca Commercial Court by reason of, inter alia, the fact that:

(a)

The Owners failed to bring any challenge to the jurisdiction of the Casablanca Commercial Court in accordance with the requirements of Moroccan procedural law, and in particular failed to comply with the requirements of Article 16 of the Moroccan Code of Civil Procedure by:

(i)

Not making any challenge to the jurisdiction of the court seised prior to making any other procedural or substantive challenges;

(ii)

not identifying the court, if not the Casablanca Commercial Court, which does have jurisdiction; and/or

(iii)

not requesting that the case file be transferred to that court;

(b)

The only challenge which the Owners did make – that is their submission that the writ filed by the Insurers in the Casablanca Proceedings was not “formally acceptable” – constituted a procedural defence and not a jurisdictional challenge;

(c)

The Owners pleaded a substantive defence to the merits of the Insurers’ claim in circumstances where this was not required by Moroccan law;

(d)

The Owners’ appeal against the Casablanca Commercial Court’s judgment also fails to challenge the jurisdiction of Moroccan courts but merely reiterates the procedural and substantive defences previously advanced before the first instance court and that consequently the Owners’ appeal constitutes a further submission to the jurisdiction of the Moroccan courts, in addition to its submission to the jurisdiction at first instance.

7.

In the premises, the Moroccan Judgment is entitled to recognition by the English court and the Owners are consequently estopped per rem judicatam from asserting this claim against the Insurers.”

In its Reply the claimant admitted that the Moroccan Judgment was between the claimant and the Insurers (taking no point that the Moroccan proceedings were expressed to be against the Master of the Vessel) and that the Moroccan Judgment determined the issue of liability for the alleged damage to the cargo, which is also an issue in these proceedings. The claimant denied, however, that the Moroccan court was a court of competent jurisdiction, rejecting the allegation that the claimant had submitted to its jurisdiction, asserting that:

On 26 October 2015 the Insurers issued an application to strike out the claimant’s case that it did not submit to the jurisdiction of the Moroccan courts (as summarised in paragraph 24 above) on the grounds that the first assertion was an abuse of the court’s process given the stance adopted by the claimant in these proceedings and that the second assertion was not arguable.

The Insurers’ pleaded case, as set out above, was that the claimant had voluntarily submitted to the jurisdiction of the Moroccan courts by appearing in those proceedings (the “Third Case” of a foreign court having jurisdiction to give a judgment in personam identified by Dicey, Morris & Collins, The Conflicts of Laws, 15^th Ed. (“Dicey”) atpara. 14R-054).

However, in her skeleton argument for the hearing of the preliminary issue, Ms Wells sought to introduce a further contention, in the alternative, that the claimant had impliedly agreed to submit disputes relating to the cargo to the Moroccan courts (the “Fourth Case” identified by Dicey at para. 14R-054) by agreeing to carry the cargo to Morocco. Ms Wells argued that such an agreement was to be implied from the fact that Morocco is known to be a signatory to the Hamburg Rules and that those rules provide (i) that they are applicable to a contract of carriage if, inter alia, the port of discharge is in a Contracting State (Article 2(1)) and (ii) that a claimant may institute action in the court of a State where, inter alia, the port of discharge is situated (Article 21(1)). However, this argument was not pleaded in the Amended Partial Defence and was plainly an afterthought, not least because (if the argument had any validity) it would have been a complete answer, in respect of all three bills of lading, to the claimant’s application for an anti-suit injunction. The argument further appeared to be contrary to the agreed position that the Owendo and Taoradi bills of lading are subject to the Hague Rules. For those reasons, and in the absence of any application to amend, I refused Ms Wells permission to rely on this new contention.

It is a principle of the common law (described by Dicey at para 14-69 as “simple and universally admitted”) that a litigant who has voluntarily submitted himself to the jurisdiction of the court by appearing before it cannot afterwards dispute its jurisdiction. Briggs, Civil Jurisdiction and Judgments,6^th Ed. (“Briggs”) at para 7.52, explains that, as a matter of theory, a party who voluntarily appears or participates in proceedings is considered by the common law to have accepted an offer from the opposing party who commenced the proceedings to accept the jurisdiction and be bound by its judgment. The touchstone of submission on this basis is therefore consent, although the question of whether consent has been given is to be judged objectively.

In Henry v Geoprosco International [1976] QB 726 the Court of Appeal decided that, as a matter of authority (in particular Harris v Taylor [1915] 2 KB 580 CA), a defendant was to be taken to have submitted to the jurisdiction of a foreign court if he voluntarily appeared to invite that court in its discretion not to exercise jurisdiction it had under its own local law (p.747A). The Court of Appeal further determined that there was a voluntary appearance if the defendant protested against the jurisdiction of the foreign court, but that protest took the form of a conditional appearance which was converted automatically by operation of law into an unconditional appearance if the decision on jurisdiction went against the defendant (p.748G). The court left open the question whether an appearance solely to protest against the jurisdiction of the foreign court would be a voluntary submission to that court (p.747E).

The decision in Henry v Geoprosco was reversed by statute, in the form of s.33 of the Civil Jurisdiction and Judgments Act 1982, which provides exceptions to the common law principle in the following terms:

In providing that a person shall not be taken to have submitted to the jurisdiction of an overseas court by reason only of appearing for one of the specified purposes, s.33 left open the question of which further or other additional steps in the foreign proceedings would result in a finding that the person had, nonetheless submitted. In particular, the question arises as to when defending a case on its merits, at the same time as contesting jurisdiction, would give rise to that conclusion.

That question has been considered in a number of cases, all examined by the Court of Appeal in AES Ust-Kamenogorsk Hydropower Plant LLP v AES Ust-Kamenogorsk Hydropower Plant JSC [2012] 1 WLR 920 (a case in which the submission issue was not considered by the Supreme Court). It was common ground that the “general thrust” of the authorities was accurately summarised in Dicey at para. 14-073 as follows:

“… for so long as the defendant asserted, and is obviously still asserting, as his primary defence that the court has no jurisdiction over him in relation to the merits of the claim, then even if he also takes steps which are purposeful in relation to the merits of the claim, his doing so should not be taken to mean that he has submitted to the jurisdiction for the purposes of the common law of submission, and has abandoned his challenge for the purposes of s.33. The real question for the English court should not be whether the defendant has taken a step in proceedings which prepare for the trial of the merits, but whether he has chosen to abandon his challenge to the jurisdiction. In answering this, the English court is not bound to follow the law of the foreign court on whether a defendant has succumbed to its jurisdiction; and if the defendant had “no

real option but to act as it did”, as it was put in AES Ust-

Kamenogorsk Hydropower Plant LLP v AES UstKamenogorsk Hydropower Plant JSC, the court may be

reluctant to find that it has submitted to the jurisdiction.”

In Rubin v Eurofinance SA [2013] 1 AC 283 the Supreme Court confirmed that the characterisation of whether there has been a submission for the purposes of the enforcement of foreign judgments in England depends on English law. Lord Collins explained at [161] that:

“The courtwill not simply consider whether the steps taken abroad amounted to submission in the English proceedings. The international context requires a broader approach. Nor does it follow from the fact that the foreign court would have regarded steps taken in the foreign proceedings as a submission that the English court will so regard them. Conversely, it does not necessarily follow that because the foreign court would not regard the steps as a submission that they will not be so regarded by the English courts as a submission for the purposes of the enforcement of a judgment of the foreign court. The question whether there has been a

submission is to be inferred from all the facts.”

Ms Wells accepted that the claimant’s stance in the Moroccan proceedings was to ask the Moroccan court to dismiss or stay the proceedings in favour of arbitration, therefore falling within the exception contained in s.33(1)(b).

The Insurers advanced two argument as to why the claimant nevertheless should be taken to have submitted to the jurisdiction of the Moroccan courts:

Ms Wells positioned the abuse of process argument as her primary contention, no doubt due to the difficulties facing the Insurers’ pleaded case as discussed below. However, I agree with Mr Collett that, as a matter of logic, the first question is whether or not the claimant submitted to the Moroccan court despite and in the context of contending that the dispute should be referred to arbitration. The question

Each party served evidence from an expert in Moroccan law and procedure. The Insurers relied on reports from Professor Mounir Tabite, the claimant on a report from Me Kamal Saïgh.

The experts were broadly in agreement on the following:

The one area of disagreement arose from Professor Tabite’s suggestion that a challenge based on an international arbitration agreement (as opposed to a domestic agreement falling within article 327 of the CPC) could be made by way of either a jurisdictional challenge or an admissibility challenge and that, as a matter of Moroccan law, a party who opted for an admissibility challenge would be deemed to have submitted to the jurisdiction of the Moroccan courts.

Based on that suggestion, the Insurers contended that the claimant, in electing to make an admissibility challenge rather than challenging jurisdiction, should be taken to have submitted to the jurisdiction of the Moroccan courts, in particular because the clamant had voluntarily selected a course which entailed submitting a defence to the substantive merits when it need not have done so had it chosen to challenge jurisdiction.

However, it is difficult to reconcile Professor Tabite’s suggestion with his clear explanation that article 16 of the CPC requires a party making a jurisdiction challenge to specify the court (which does not include an arbitral tribunal) to which the case should be transferred. Indeed, even in the context of making his suggestion, Professor Tabite emphasises that the jurisdictional challenge he envisages would be subject to fulfilling the requirements of article 16, a condition which simply could not be satisfied on his own evidence.

I therefore prefer Me Saïgh’s clear and consistent evidence that a challenge based on an arbitration agreement can only be brought by way of an admissibility challenge, even in relation to international arbitration agreements (which Me Saïgh explains would be governed by Article II paragraph 3 of the New York Convention to which Morocco is a signatory). Indeed, Me Saïgh cited several decisions of the Commercial Court of Appeal, dealing with international arbitration agreements, which expressly state that challenges based on arbitration agreements are submissions as to “nonacceptance”.

It follows that the claimant was not only obviously and primarily asking the Moroccan court (at first instance and on appeal) to dismiss the proceedings on the ground that the dispute should be submitted to arbitration (within the meaning of s.33(1)(b)), but did so by the only route open to it, a route which necessitated serving a defence on the merits in the alternative if that defence was to be preserved. In those circumstances it is impossible to view the claimant’s actions in Morocco as amounting to a choice to abandon such challenge or otherwise to succumb to the jurisdiction of the Moroccan courts.

Even if, contrary to my finding above, it was possible for the claimant to mount a jurisdictional challenge instead of an admissibility challenge in Morocco (and even if that amounted to submission as a matter of Moroccan law), I am satisfied that the claimant did not, from an English law perspective, abandon its challenge or succumb to the jurisdiction of the Moroccan courts. The course the claimant took was an appropriate course (one regarded by a respectable body of Moroccan lawyers as the only one open to it) for a party seeking to have a dispute referred to arbitration. Throughout that course the claimant’s objection based on the alleged incorporation of arbitration clauses was its primary contention, and was never abandoned.

Ms Wells contended (although the point was not pleaded) that, notwithstanding the above findings, I could take into account other relevant factors, and exercise a degree of discretion, in considering whether the claimant had submitted in Morocco. She submitted that the following were relevant factors which should lead me to reach the conclusion that the claimant had so submitted:

Whilst it is true that the question of whether a party has submitted is to be inferred from all the facts (see para. 33 above), there is no basis, in my judgment for regarding the determination of that issue as involving an element of discretion. The court has to make a determination as to whether the party has voluntarily appeared in the foreign court (other than as specified in s.33(1)), a question of mixed law and fact to which there is a single answer, not exercise its discretion as between a range of permissible answers. In the present case, having found that the claimant brought a primary challenge which falls within s.33(1)(b) and had no choice but to defend the merits of the case at the same time, the clear inference to be drawn from all the facts is that the claimant did not submit in Morocco. As for the points on which Ms Wells relies:

I therefore find that the claimant, having requested the dismissal of the claim in Morocco in favour of arbitration proceedings and having done so continually and as its primary response, did not voluntarily appear in the Moroccan courts. I turn to the question of whether the claimant should nonetheless be held to have submitted in Morocco on the ground that its reliance for the purposes of the present preliminary issue on its admissibility challenge in Morocco is an abuse of the process of this court.

Ms Wells does not contend that the claimant is estopped from relying on its admissibility challenge in Morocco, nor does she contend that the claimant is bound by some form of election. Her argument is that the claimant’s position is an example of impermissible approbation and reprobation, or “blowing hot and cold”. The complaint is that the claimant commenced these proceedings in England (not suggesting that the Owendo and Takoradi bills of lading incorporated arbitration clauses), took an inconsistent position in Morocco that the dispute should be referred to arbitration and is now seeking to pursue these proceedings by relying on its inconsistent stance in Morocco.

Ms Wells draws the principle upon which she relies from Express Newspapers Plc v News (UK) Ltd [1990] 1 WLR 1320, in which a plaintiff was not permitted to defend a counterclaim which was legally indistinguishable from the plaintiff’s own claim, to which the plaintiff had said there was no defence. Brown-Wilkinson VC stated:

“There is a principle of law of general application that it is not possible to approbate and reprobate. That means that you are not allowed to blow hot and cold in the attitude that you adopt. A man cannot adopt two inconsistent attitudes towards another: he must elect between them and, having elected to adopt one stance, cannot thereafter be permitted to go back and adopt an inconsistent stance …...”

The second case relied upon was Benedictus v Jalaram Ltd (1988) 58 P&CR 330, in which a tenant, having made an application for a new tenancy predicated on being in occupation of the premises, subsequently resisted the landlord’s application for interim rent on the basis that he was not in occupation. The Court of Appeal upheld the striking out of the tenant’s response on the basis that it was an abuse. Bingham LJ stated:

“… We were referred to various textbook passages on election or remedies, waiver and approbation and reprobation. I do not think the present case falls within the letter of any of these doctrines or maxims but each of the doctrines or maxims reflects the unwillingness of the courts to countenance inconsistent conduct by one party where this is prejudicial to the other. It is further to be remembered that in the present case we are concerned not with statements made in the course of commercial dealing or negotiation but formal statements made in the course of invoking the court’s jurisdiction, statements which Jalaram now wish to say were false. It seems to me, as the judge, that whether the rule is founded on public policy or justice between the parties this cannot be permitted.”

However, Express Newspapers and Benedictus are extreme examples of a party adopting diametrically opposite positions within one set of English proceedings, the

It follows, in my judgment, that whilst there is a degree of tension between the claimant’s stance in these proceedings and its position in the Morocco proceedings, it is the type of situation which can arise where disputes are pursued in parallel proceedings in different jurisdictions and governed by different laws. It is certainly not the type of blatant inconsistency which would cause the court to prevent a party from relying on the position it has undoubtedly and properly adopted in foreign proceedings.

The claimant further contended that its participation in the Moroccan proceedings was, in any event, to protect or obtain the release of property seized in the proceedings, namely, the MBEC guarantee (which stood in place of the Vessel). In view of my finding above the claimant’s participation in the Moroccan proceedings did not amount to a submission to that jurisdiction, and as Mr Collett accepted that this point was not at the “forefront” of his case, it is neither necessary nor appropriate for me to decide this further contention.

The fourth paragraph of Article III r.6 of the Hague Rules provides as follows:

“In any event the carrier and the ship shall be discharged from all liability in respect of all loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.”

It is common ground that the relevant date by which the goods should have been delivered was a date not before the end of August 2013, so that the one year time bar (which extinguishes the claim rather than merely barring the remedy: see Aries Tanker v. Total Transport Ltd [1977] 1 WLR 185 HL)arose not before the end of August 2014. Both the Moroccan proceedings and these proceedings had been commenced before that date. The question is whether either of those proceedings constitutes “suit” within the meaning of Article III r.6.

Article III r. 6 is to be given a broad and purposive construction: The Amazona [1989] 2 Lloyd’s Rep 130 CA per Parker LJ at 136, The Finnrose [1994] 1 Lloyd’s Rep 559 per Rix J at 574.

The purpose of the time-bar has been explained in numerous authorities, including as follows:

It is now recognised that proceedings in a foreign court may constitute valid suit for the purposes of Article III r.6, provided that the court is “competent”. In The Nordglimt [1988] 1 QB 183 Hobhouse J, following the provisional view of the Court of Appeal in The Kapetan Markos NL [1986] 1 Lloyd’s Rep 211, held that proceedings before a competent court were sufficient to prevent the liability of the carrier being discharged at the end of the one year period. Accordingly English proceedings in rem were not barred by the time-bar because proceedings had been commenced in personam in Antwerp within the one year period. That reasoning was approved by Parker LJ in The Amazona (above).

Subsequent cases have identified several situations in which a foreign court will not be considered to be competent, but those all relate to the jurisdiction of the court in the context of the relationship and conduct of the parties, not the intrinsic competence of the court. For example, proceedings brought in breach of an exclusive jurisdiction clause (The Havhelt [1993] 1 Lloyd’s Rep 243), proceedings brought in breach of an arbitration agreement (Thyssen v Calypso [2000] 2 Lloyd’s Rep 243) and proceedings which, although initially competent, were struck out for want of prosecution (The Finnrose (above)) have been held not to count as valid suits.

Mr Collett did not dispute that the Moroccan court had jurisdiction to deal with the Insurers’ claim and that there was no impediment to the competence of that court of the nature recognised in previous decisions. Nor did he dispute that those proceedings fulfilled the purpose of the time-bar identified in the authorities referred to above, that is to say, ensuring that the cargo claim against the claimant was pursued promptly within 12 months and was not allowed to become stale.

However, Mr Collett contended that there is a wider purpose behind the time-bar, which has not yet been addressed in the cases or text books, which requires that foreign proceedings should not be regarded being brought in a competent court if they were commenced in a jurisdiction (such as Morocco) which applied the Hamburg Rules rather than the Hague rules. The argument was as follows:

However, in my judgment Mr Collett’s argument overreaches by a considerable margin. The fact that parties have agreed to apply the Hague Rules evidently does not entail that they have agreed that no proceedings will be brought in a state which applies the Hamburg Rules (and Mr Collett has not suggested that it does: such an agreement would have founded a clear entitlement to an anti-suit injunction). Further, Burton J, at [46], rejected the claimant’s contention that commencing proceedings in a Hamburg Rules jurisdiction in such circumstances would be contrary to English public policy or otherwise be regarded as unconscionable conduct. Yet Mr Collett’s proposed interpretation of Article III r.6 is based on the hypothesis that proceedings in a Hamburg State should be discounted by the English court applying the Hague Rules (and in particular the time-bar in Article III r.6), giving rise to an entitlement to a declaration of non-liability and thereafter, no doubt, an anti-suit injunction. It is unclear why a simple-time bar provision should be read as giving rise to draconian consequences not otherwise arising a matter of the rules or the general law, and I see no reason why it should. The true purposes of the rule have been clearly stated in the authorities referred to above and do not include requiring proceedings to be brought under the Hague Rules. In my judgment Mr Collett’s argument, whilst ingenious, is a flawed attempt to re-open, in a different guise, the contention roundly rejected by Burton J at [46] of his judgment.

As I have found above that the Insurers did bring valid suit within one year for the purposes of Article III r.6 in the form of the Moroccan proceedings, it is not strictly necessary for me to decide the further question of whether the claimant’s claim for a negative declaration in these proceedings also constituted valid suit for that purpose. For the sake of completeness, however, I shall briefly set out my view on that further question.

Although there is no direct authority on the point, all of the cases proceed on the assumption that the suit contemplated by Article III r.6 is one brought against the shipowner, alleging liability for breach of duty in relation to the cargo: see in particular the citations from The Pionier and The Kapetan Markos NL set out above.

Ms Wells nevertheless contended that there is nothing in the wording of the rule itself which requires that the suit be brought against the carrier and that the purpose of the rule is equally fulfilled by a claim initiated by the carrier seeking to establish nonliability: the dispute is brought to court promptly and the carrier is able to ascertain its liability and avoid exposure to stale claims. Ms Wells also referred to the following:

However, the nature and operation of a time-bar is well understood. Such a time bar (or limitation period) provides a party alleged to be liable with a defence to the cause of action asserted against him (or extinguishes the cause of action altogether) if the proceedings have not been brought within a specified period. There is no reason to read Article III r. 6 as operating in a different way: the reference to the carrier being discharged from all liability unless suit is brought is, in my judgment, plainly specifying a period in which claims against the carrier must be commenced. I do not consider that the fact that a claim for a declaration of non-liability has the same ‘object’ as a claim alleging such liability entails that either claim will sufficient to stop time running in respect of the latter.

It follows that, had the issue required a decision, I would not have found that the claimant’s claim in these proceedings constituted valid suit for the purposes of Article III r.6.

For the reasons set out above: