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Exclusive English jurisdiction clause in bill of lading leads to anti-suit injunction

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Hin-Pro International Logistics Ltd v. Compania Sud Americana De Vapores SA [2015] EWCA Civ 401

The Court of Appeal has confirmed the Commercial Court’s finding that an English law and jurisdiction clause in a bill of lading was an exclusive jurisdiction clause and upheld the anti-suit injunction granted by the lower court.

The background facts

The original claim was one for mis-delivery of goods. Hin-Pro, a Hong Kong freight forwarder, alleged that the carrier, CSAV, wrongly delivered cargo without production of original bills of lading in various ports in Venezuela. The shipments in question were all from China to Venezuela and on CSAV bills. Hin-Pro commenced multiple sets of proceedings against CSAV in various courts in China under the separate bills (which numbered about 70 in total).

CSAV sought and obtained both an anti-suit injunction and a worldwide freezing order against Hin-Pro from the English Commercial Court. This was obtained on the basis that, by bringing proceedings in China, Hin-Pro had breached the exclusive jurisdiction agreement contained in the bills. The Commercial Court subsequently upheld the anti-suit injunction and awarded CSAV damages in respect of Hin-Pro’s breaches. 

Hin-Pro appealed the decision. The Court of Appeal has now dismissed Hin-Pro’s appeal and ruled that the clause was an exclusive jurisdiction clause. Consequently, the anti-suit injunction was made permanent.

The Court of Appeal decision

Clause 23 of the CSAV bills provided as follows:

“Law and jurisdiction.

This Bill of Lading and any claim or dispute arising hereunder shall be subject to English law and the jurisdiction of the English High Court of Justice in London. If, notwithstanding the foregoing, any proceedings are commenced in another jurisdiction, such proceedings shall be referred to ordinary courts of law. In the case of Chile, arbitrators shall not be competent to deal with any such disputes and proceedings shall be referred to the Chilean Ordinary Courts.”

The Court considered whether or not, by this clause, the parties had agreed to the exclusive jurisdiction of the English Court. It concluded that they had. It based its decision on the following grounds:

  1. The clause used the words “shall be subject to… the jurisdiction of the English High Court”, which were imperative and directory. The parties were agreeing to submit all disputes to the English Court, rather than merely submitting themselves to its jurisdiction if that jurisdiction was invoked.
  2. The natural commercial purpose of the clause was to stipulate the court having jurisdiction. In the present case, there would be only limited benefit in specifying England as an optional jurisdiction without any obligation on either party to litigate there.
  3. There was obvious sense in making both English law and jurisdiction mandatory.  England was the best forum for the application of its own law.
  4. The use of the phrase, "if, notwithstanding the foregoing, any proceedings are commenced in another jurisdiction" in the jurisdiction clause recognized that the first sentence required litigation in England as a matter of contract.
  5. The second and third sentences of the jurisdiction clause covered a situation where an international convention or national law did not recognise the intended effect of an exclusive jurisdiction clause. 
  6. The contra proferentem rule (a rule of English law that states that any ambiguity in a clause should be construed against the party who put the clause forward) was of no assistance in this case. The words used in the jurisdiction clause were sufficiently clear to determine its meaning.
  7. Although ultimately a question of construction of the particular jurisdiction clause, the tenor of previous relevant court decisions was that an agreement for English law and jurisdiction in this form was likely to be interpreted as involving both the mandatory application of English law and the exclusive jurisdiction of the English Court.

Comment 

Although the word “exclusive” did not appear anywhere in the English law and jurisdiction clause in the bills of lading, the Commercial Court, and now Court of Appeal, still interpreted the clause as providing for the exclusive jurisdiction of the English Court.  Although a question of construction (and therefore not binding when interpreting another differently worded clause), this case adds to the guidance on what words will be effective under English law to create an exclusive jurisdiction agreement.

 

Regardless of the decision in this case, however, it is always worth specifying expressly that a particular jurisdiction should be “exclusive” if that is what the parties want.

Max Cross

Max Cross Partner

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