Import Export Metro Ltd. & Anor v Compania Sud Americana De Vapores S.A. [2003] EWHC 11 (Comm)

[2003] EWHC 11 (COMM)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 23 January 2003
Before
THE HONOURABLE MR JUSTICE GROSS
Between
(1) Import Export Metro LtdClaimants(2) Metro ExportsRespondentsCompania Sud Americana De Vapores S.A.Defendants
Nicholas Hamblen QC & Charles Kimmins (instructed by Clifford Chance) for Defendants/ApplicantsLuke Parsons (instructed by Stephenson Harwood) for Claimants/RespondentsHearing Hearing dates : 30 October 2002
Approved JudgmentI direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic..............................Mr Justice Gross

INTRODUCTION

[1]By Application Notice dated 5th July,2002, the Applicants/Defendants (“CSAV”) apply(1) for a declaration that the English Court should not exercise any jurisdiction which it may have over the dispute which has arisen between CSAV and the Respondents/Claimants (“Metro”);(2) for an order that the issue and service of the Claim Form out of the jurisdiction on CSAV, pursuant to the order of Cresswell,J. dated 26th September, 2001, be set aside;(3) for an order staying the proceedings before the English Court. The Application Notice gives as its basis that “Chile is clearly and distinctly the most appropriate forum for the resolution of the dispute, and that in the interests of justice it should be determined there.” As will become apparent, the reference to “Chile” is in fact a reference to arbitration in Chile rather than to the Courts of Chile.[2]In a nutshell as to the parties, Metro is an international trader; CSAV is an international shipping corporation operating a worldwide business, incorporated and with its headquarters in Chile. The underlying dispute between the parties concerns alleged mis-delivery of goods carried from Hong Kong or elsewhere in China to Iquique, Chile on various vessels under 11 bills of lading (“the bills of lading”), issued on behalf of CSAV on its standard form; in essence, Metro alleges that CSAV delivered its goods to Importadora Lucky Crown Ltd. (“Lucky Crown”) without production of original bills of lading, whereby Metro has suffered loss and damage.[3]Metro opposes the CSAV application, relying essentially on the non-exclusive English law and jurisdiction clause (“the EJC”) contained in the bills of lading, as in all standard CSAV bills of lading, in the following terms:
“24. 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 any proceedings shall be referred to the Chilean Ordinary Courts.”
[4]As to evidence on the application, each party adduced Witness Statements from their respective solicitors, Mr. Kaiser for Metro and Ms. Kay for CSAV. In addition, CSAV adduced expert evidence on Chilean law in two Witness Statements from Ms. Uribe and, very late in the day but in circumstances which rendered it appropriate to permit its introduction in (partially) redacted form, Metro likewise produced expert evidence on Chilean law in a Witness Statement from Mr. Sahurie. Unavoidably perhaps, a good deal of all this material went to the merits of the underlying dispute and the nature of the parties’ cases in that dispute. For purposes of the present “jurisdictional” dispute, it suffices in the main to note this evidence (so as to understand the issues which I have to determine) rather than adjudicate on such disagreements as have emerged.[5]Accordingly, for present purposes, the relevant factual background can be very shortly summarised: i) Metro’s case is that it has done business with Lucky Crown for over 15 years. As already foreshadowed, the substantive claim relates to goods shipped under the bills of lading, all of which were issued by CSAV between May and August 2000. The consignee was in each case “to order”. According to Metro, there was a delay in payment and original bills of lading were never released. When, in about December 2000, inquiries were made as to the whereabouts of the goods, Metro was advised by CSAV’s agents that they had already been released to Lucky Crown. Metro’s understanding is that Lucky Crown was able to obtain delivery of the goods by presenting to CSAV(1) faxed copies of the bills of lading, bearing added words including “originalised” and(2) forged letters, purportedly signed by Metro’s Chilean office, to Lucky Crown, confirming that the goods could be released. The quantum of Metro’s claim in the English proceedings is estimated at some US$255,000. ii) CSAV denies that it was in breach of contract or duty. As to 4 of the bills of lading, CSAV contends that the cargo was delivered against original bills of lading. In this regard, the key issues are said to be factual and to turn on evidence emanating from Chile. As to the remaining 7 bills of lading forming the subject of these proceedings, CSAV’s case is that it was obliged under Chilean law – differing in this respect markedly from English law - to deliver the goods to licensed customs warehouse operators at the port of Iquique whether or not original bills of lading had been presented; such delivery terminated CSAV’s obligations and liability under the bills of lading. Here, CSAV goes on to contend that the licensed customs warehouse operators and (so far as relevant) licensed container operators are performing public law functions; accordingly, it is submitted, it was not open to CSAV to enter into private law contracts with these operators (for instance requiring them to insist on presentation of original bills of lading) which amends their public law functions or duties. For these reasons, CSAV suggests that issues of Chilean law are “fundamental” (para. 55 of its skeleton argument) to the claims in contract and tort; moreover, these are issues said to concern the performance of public functions by public or private bodies and as such they are of “great sensitivity and .. public importance” (para. 107 of Ms. Kay’s First Witness Statement). CSAV of course accepts that the bills of lading were governed by English law, as appears from cl.24 of the bills of lading (already set out above). However, Chilean law was relevant (1) as the law of the place of performance, pursuant to Art. 10(2) of the Rome Convention (set out below) and (2) because cl. 5 of the bills of lading provided that CSAV may “comply with any orders, recommendations or directions of any government(s) … or authority/authorities…” which, it is said by CSAV, would include obligations imposed under the local law of Chile. Furthermore, CSAV may seek to rely on a defence based on a course of dealing. iii) It is a further fact, on which CSAV places much emphasis, that Metro currently seeks to pursue claims under 14 other bills of lading against CSAV in Chile (“the Metro Chilean claim”); these claims, amounting to some US$375,000, concern alleged mis-delivery of goods without presentation of original bills of lading, relating to shipments between February and April, 2000. On the material before me, it appears that on the 20th February, 2002, therefore some months after the commencement of these proceedings, Metro filed an application for the appointment of an arbitrator in Chile in respect of the Metro Chilean claim. It further appears that in March 2002, a distinguished arbitrator was appointed to resolve this dispute; it does not appear that any further steps have been taken in this arbitration. It is fair to say that the issues raised, insofar as they go to Chilean law or usual procedures at the port in question, appear to be the same, or at least very similar, to those which arise in the English proceedings; the Metro Chilean claim does not, however, cover the same claims as arise in the English proceedings. Metro’s explanation for bringing the Metro Chilean claim in Chile is that, for reasons which do not matter here, it had missed the one year (Hague/ Hague-Visby Rules) time limit applicable in England and therefore needed to take advantage of the two year Hamburg Rules time limit applicable in Chile. iv) As to proceedings in Chile, the following facts were not in dispute: First, that claims for loss of or damage to cargo are subject to mandatory arbitration; contractual clauses (such as the final sentence of cl.24 of the bills of lading) purporting to provide for the reference of such proceedings to the Chilean Courts have been declared by the Chilean Courts to be void. Secondly, under Chilean law, the provision contained in cl.24 of the bills of lading for English law and jurisdiction will be deemed null and void; the Metro Chilean claim will be determined in accordance with Chilean substantive law. Thirdly, if CSAV’s application succeeded then, if Metro so chose, its claims under the bills of lading could be heard by the same arbitrator already appointed to hear the Metro Chilean claim. v) Reverting to cl.24 of the bills of lading, it was not in dispute that it provided for English law and non-exclusive English jurisdiction. The second sentence recognised that in certain jurisdictions (for example where the Hamburg Rules are applicable), the English jurisdiction clause might be disregarded. On the material before me, it appears that the third sentence represented an ineffective preference for the Chilean Courts over Chilean arbitration; as already noted, such clauses have been held by the Chilean Courts to be null and void.[6]It is a feature of the present (underlying) dispute that the principal defences which CSAV seeks to raise as a matter of Chilean law (see para. 5 ii) above) were considered in detail and rejected by Thomas,J. in East West Corp v DKBS 1912 [2002] EWHC 83 (Comm) [2002] 2 Lloyd’s Rep. 182, esp. at pp. 194 - 206 . CSAV submits that Thomas,J. was wrong and that in any event his decision is distinguishable on the facts pertaining to delivery arrangements applying in Iquique as contrasted with those prevailing in the Chilean port with which Thomas,J. was concerned.

THE RIVAL ARGUMENTS IN OUTLINE

[7]I turn to the rival arguments, in brief outline. For CSAV, Mr. Hamblen QC submitted that this was one of those cases where there was good reason for not giving effect to the EJC. The balance of convenience was overwhelmingly in favour of this dispute being resolved in Chile. All the circumstances of the case, including factors of convenience, were to be taken into account, as demonstrated by a line of authorities and in particular the decision of the Court of Appeal in The El Amria [1981] 2 Lloyd’s Rep. 119. In any event, this case went beyond mere matters of convenience; it was in the interests of justice that a Chilean tribunal should determine this dispute, for three principal reasons:(1) Chilean law was fundamental and the issues of Chilean law which arose were of great sensitivity and public importance;(2) Evidence which would be impossible or difficult to obtain for the English proceedings could be obtained by CSAV for use before a Chilean tribunal;(3) Were the English proceedings to continue, given the Chilean Metro claim, there would be a multiplicity of proceedings carrying the inherent risk that the same issues would be determined differently in England and Chile.[8]Metro’s case, developed by Mr. Parsons, emphasised the EJC. It was accepted that had there been no EJC, then factors of convenience did favour Chile as the forum to resolve the present dispute; however, given the EJC, factors of convenience, foreseeable at the time of entry into the bills of lading contracts, were irrelevant: in this regard, BAe v Dee Howard [1993] 1 Lloyd’s Rep. 368 and a number of other authorities were relied upon. All the issues raised by CSAV were no more than foreseeable matters of convenience. In any event and whatever the precise test, there was no good reason not to give effect to the EJC; it was Metro’s contractual right to have this dispute determined by the English court. Dealing specifically with CSAV’s principal arguments:(1) These were English law contracts; Chilean law was either irrelevant or was, at all events, to be approached within the framework of a contract governed by English law;(2) The difficulties as to evidence suggested by CSAV were foreseeable; if relevant, they were over-stated;(3) There was nothing in the point as to multiplicity; the Chilean Metro claim had been commenced subsequently to these proceedings; if CSAV was truly concerned as to the risk of inconsistent decisions, it could waive the time bar so that the Chilean Metro claim could also be determined in England.

THE PRINCIPAL ISSUES

[9]It will be apparent that two principal issues fall to be determined:(i) (I) The relevant principles with regard to giving or not giving effect to the EJC (“the relevant principles”);(ii) (II) The application of those principles to the facts (“application of the relevant principles”). I take them in turn.

(I) THE RELEVANT PRINCIPLES

[10]Many authorities were canvassed in the course of the argument going to this Issue. As it seems to me, it will be helpful to record the passages suggested as marking the high point of each party’s case before proceeding directly to my conclusions, making then such reference to the authorities as is necessary.[11]As already indicated, CSAV directed attention to the El Amria(supra) and, especially, to the following passage in the judgment of Brandon, LJ, as he then was, at pp. 123-124 (where he re-stated principles which he had originally formulated as Brandon,J. in The Eleftheria [1969] 1 Lloyd’s Rep. 237):
“ (1) Where plaintiffs sue in England in breach of an agreement to refer disputes to a foreign Court, and the defendants apply for a stay, the English Court, assuming the claim to be otherwise within its jurisdiction, is not bound to grant a stay but has a discretion whether to do so or not. (2) The discretion should be exercised by granting a stay unless strong cause for not doing so is shown. (3) The burden of proving such strong cause is on the plaintiffs. (4) In exercising its discretion the Court should take into account all the circumstances of the particular case. (5) In particular, but without prejudice to (4), the following matters, where they arise, may properly be regarded: (a) In what country the evidence on the issues of fact is situated, or more readily available, and the effect of that on the relative convenience and expense of trial as between the English and foreign Courts. (b) Whether the law of the foreign Court applies and, if so, whether it differs from English law in any material respects. (c) With what country either party is connected, and how closely. (d) Whether the defendants genuinely desire trial in the foreign country, or are only seeking procedural advantages. (e) Whether the plaintiffs would be prejudiced by having to sue in the foreign Court because they would: (i) be deprived of security for their claim; (ii) be unable to enforce any judgment obtained; (iii) be faced with a time-bar not applicable in England; or (iv) for political, racial, religious or other reasons be unlikely to get a fair trial. ”
On the basis of this passage (and others in a supporting line of authorities), CSAV argued (1) that factors of convenience were relevant (on Court of Appeal authority) to a consideration of whether or not to give effect to a jurisdiction clause; (2) that in any such consideration, all the circumstances of the case were to be taken into account; (3) that the application of a foreign law was or might be a factor of particular importance in determining where the case should be tried; and (4) that when considering “all the circumstances”, there was a need to keep in mind the “potential disaster” (see at pp. 128-129) of the risk of inconsistent decisions on the same issues inherent in a multiplicity of proceedings.[12]Again as foreshadowed, for its part, Metro underlined the following passage from the judgment of Waller, J. (as he then was), in BAe(supra), at pp. 376-7, in support of the submission that foreseeable factors of convenience are irrelevant to a consideration of whether to give effect to an EJC:
“ … on the language of the clause that I am considering here, it simply should not be open to DHC to start arguing about the relative merits of fighting an action in Texas as compared with fighting an action in London, where the factors relied on would have been eminently foreseeable at the time they entered into the contract…. Surely they must point to some factor which they could not have foreseen on which they can rely for displacing the bargain which they made i.e. that they would not object to the jurisdiction of the English Court. Adopting that approach it seems to me that the inconvenience for witnesses, the location of documents, the timing of a trial, and all such like matters, are aspects which they are simply precluded from raising….. It is thus clear to me that the proper approach to a case of the sort that I am considering is to consider it as equivalent to proceedings commenced as of right, to apply the passage in Lord Goff’s judgment in The Spiliada dealing with such actions, but to add the consideration which he did not have in mind …that there is a clause under which DHC had agreed not to object to the jurisdiction. That being the proper approach, and additionally it being … right only to consider the matters which would not have been foreseeable when that bargain was struck, I would dismiss both summonses of the defendants.”
[13]I turn to my conclusions. First, the general rule is that in the absence of strong reasons for departing from it, a party will ordinarily be held to the bargain struck by the EJC. In a review taking into account many of the authorities cited in the present case, Lord Bingham, giving the leading speech in the House of Lords in Donohue v Armco [2001] UKHL 64 [2002] 1 Lloyd’s Rep. 425, stated the matter authoritatively as follows (at pp. 432-433):
“ 24. If contracting parties agree to give a particular Court exclusive jurisdiction to rule on claims between those parties, and a claim falling within the scope of the agreement is made in proceedings in a forum other than that which the parties have agreed, the English Court will ordinarily exercise its discretion (whether by granting a stay of proceedings in England, or by restraining the prosecution of proceedings in the non-contractual forum abroad, or by such other procedural order as is appropriate in the circumstances) to secure compliance with the contractual bargain, unless the party suing in the non-contractual forum (the burden being upon him) can show strong reasons for suing in that forum. I use the word “ordinarily” to recognise that where an exercise of discretion is called for there can be no absolute or inflexible rule governing that exercise, and also that a party may lose his claim to equitable relief by dilatoriness or other unconscionable conduct. But the general rule is clear: where parties have bound themselves by an exclusive jurisdiction clause effect should ordinarily be given to that obligation in the absence of strong reasons for departing from it. Whether a party can show strong reasons, sufficient to displace the other party’s prima facie entitlement to enforce the contractual bargain, will depend on all the facts and circumstances of the particular case…. 25. Where the dispute is between two contracting parties, A and B, and A sues B in a non-contractual forum, and A’s claims fall within the scope of the exclusive jurisdiction clause in their contract, and the interests of other parties are not involved, effect will in all probability be given to the clause … 26. [but] … this is not an invariable result…. 27. The authorities show that the English Court may well decline to grant an injunction or a stay, as the case may be, where the interests of parties other than the parties bound by the exclusive jurisdiction clause are involved or grounds of claim not the subject of the clause are part of the relevant dispute so that there is a risk of parallel proceedings and inconsistent decisions.”
[14]Secondly, a number of matters are either not in dispute or, in my judgment, plain: i) English law applies the same principles whether the contractual forum is England or another country: Akai v People’s Insce. [1998] 1 Lloyd’s Rep. 90, at p. 104. ii) For present purposes, it makes no difference whether the clause in question is an exclusive or non-exclusive jurisdiction clause. In Mercury v Communication Telesystems [1999] 2 All ER (Comm) 33, at p. 40, Moore-Bick,J. explained the underlying reasoning:
“Although a non-exclusive English jurisdiction clause leaves the parties free to bring proceedings elsewhere without thereby committing any breach of contract, it has generally been regarded as a powerful factor in favour of allowing proceedings brought in this country to continue. There are …two reasons why that should be so. In the first place … a clause of that kind involves a contract by each party to submit to the jurisdiction of the English courts if the other chooses to bring proceedings in this country. Although neither party binds itself to bring any action here, each of them does agree to submit to the jurisdiction if an action is brought against it. Secondly, as part and parcel of agreeing to submit to the jurisdiction each party must be taken to have recognised that this country would be an appropriate forum for the trial of the action. ”
See too, JPMSA v MNI [2001] 2 Lloyd’s Rep. 41, at p.45 See too, JPMSA v MNI [2001] 2 Lloyd’s Rep. 41, at p.45 iii) In BAe(supra), Waller, J. (at p.376) underlined the fact that the EJC there had been “freely negotiated” and was not a standard term. No doubt, where an EJC has been specifically or individually negotiated, that is all the more reason for holding the parties to the bargain thereby struck. However, the force of the “general rule” as stated by Lord Bingham is not in any sense weakened where that is not the case, at least provided it can be said that the party subject to the obligation contained in the EJC acted freely in adopting it: see Mercury(supra), at p.41 and JPMSA(supra), at p.45.

See too, JPMSA v MNI [2001] 2 Lloyd’s Rep. 41, at p.45

[15]Thirdly, in seeking to apply Lord Bingham’s “general rule” and to consider when it is appropriate to depart from it, I respectfully adopt the approach of Waller,J. in BAe(supra), to foreseeable matters of convenience, as explained or qualified in a number of subsequent authorities. While all the circumstances are to be taken into account and it cannot be said that the court will never release a party from a bargain contained in an EJC unless circumstances have arisen which could not have been foreseen at the time the contract was entered into, releases on the ground only of foreseeable matters of convenience are likely to be rare; the approach adopted by Waller,J. may be said to provide the general benchmark. In the nature of things, for the court to exercise its jurisdiction so as not to give effect to an EJC, the “strong reasons” relied on must ordinarily go beyond a mere matter of foreseeable convenience and extend either to some unforeseeable matter of convenience or enter into the interests of justice itself. Even then, it cannot simply be assumed that the court will automatically exercise its discretion so as to release one party from its contractual bargain. Once the interests of justice are engaged, then factors of convenience will be relevant to the exercise by the court of its discretion. These conclusions, in my judgment, recognise the importance to be attached to the parties’ choice of contractual forum (whether exclusive or non-exclusive), accommodate the possible tension between the choice of a neutral forum and factors of convenience and, furthermore, enjoy the support of a weight of observations in the authorities (whether strictly binding or persuasive): i) In Mercury(supra), Moore-Bick,J. having first set out the central passage from the judgment of Waller, J. in BAe(supra) and having noted that the inclusion of a (non-exclusive) EJC in a contract led Waller,J. to approach the issue of forum conveniens as if the plaintiff had founded jurisdiction here as of right, went on to say this:
“ In principle I … agree with that approach. Although I think that the court is entitled to have regard to all the circumstances of the case, particular weight should in my view attach to the fact that the defendant has freely agreed as part of his bargain to submit to the jurisdiction. In principle he should be held to that bargain unless there are overwhelming reasons to the contrary. I would not go so far as to say that the court will never grant a stay unless circumstances have arisen which could not have been foreseen at the time the contract was made, but the cases in which it will do so are likely to be rare…..” ii) In Sinochem v Mobil Sales [2000] 1 Lloyd’s Rep. 670, at pp. 679-680, Rix, J., as he then was, expressed the matter this way: “ … of fundamental importance, it is in my judgment a principle of the Court’s residual discretion to stay even proceedings commenced in the consensual forum of an exclusive jurisdiction clause that the strong cause which needs to be shown if that discretion is to be exercised must go beyond matters of mere convenience and must enter into the interests of justice itself. After all, when parties agree to an exclusive forum for their disputes, they are or must be treated as being mindful both that they have chosen for themselves where such considerations of convenience take them and also that their choice may override pure matters of convenience – as where, typically, a neutral forum is chosen which has nothing whatsoever to do with their transaction or any likely dispute that may arise out of it. As Mr. Justice Waller put it, albeit speaking in the context of a non-exclusive jurisdiction clause, in British Aerospace v Dee Howard … , it is necessary to point to some factor which could not have been foreseen in order to displace the bargain which has been agreed. He was there talking about matters of convenience. It is or may be different, however, where the quality of the consideration is different and goes to a matter of justice, although even in such a case it might be said that the factor in question should be regarded as having been foreseen and encompassed in the bargain struck.” iii) As to the choice of a neutral forum overriding pure matters of convenience, it is to be noted that this is a theme enjoying the approval of other observations in the authorities. In Attock Cement v Romanian Bank [1989] 1 Lloyd’s Rep. 572, at p. 582, Staughton,LJ said this: “ … the parties to large commercial contracts sometimes prefer what they perceive as impartiality to convenience, and if they do there is much to be said for respecting their choice. True there is still a discretion … [but] the choice of a neutral forum is surely a factor to be taken into account…. For my part I think we should also look with favour on a choice of our own jurisdiction, when it appears to have been made in order to find a Court which is neutral rather than one that is convenient.”
It was said, rightly, on behalf of CSAV that these observations in Attock were obiter; nonetheless, for my part, I regard them as most persuasive; I further note that they were referred to with approval by Thomas,J. in Akai(supra), at p. 105, where the learned Judge remarked that in such cases it would only be for “exceptional reasons” that this court would not exercise the jurisdiction that the parties have chosen. iv) In Ace Insce v Zurich Insce [2001] 1 Lloyd’s Rep. 618, at p. 630, Rix, LJ, returned to the present topic, saying this:
“ ….. If a party agrees to submit to the jurisdiction of the Courts of a state, it does not easily lie in its mouth to complain that it is inconvenient to conduct its litigation there (i.e. to assert that the agreed forum is a forum non conveniens). As Mr. Justice Waller pointed out in British Aerospace v Dee Howard … speaking of matters of convenience in the context of a non-exclusive jurisdiction clause, it is necessary to point to some factor which could not have been foreseen in order to displace the bargain which has been agreed. In such a case that party must show some good reason or special cause why it should not be held to its agreement to submit to the agreed jurisdiction; …. In the present case, however, there is no reliance … on anything unforeseen, no suggestion of any strong or special cause, no identification of some matter which lies beyond considerations of convenience and goes to a matter of justice. On the contrary, what this Court has been pressed with … are the usual and straightforward factors of an argument on convenience – the nature of the issues, the relevance of English as against Texan or New York law, the whereabouts and nationality of witnesses of fact or expertise, cost and delay, and such like.” v) Finally here, in JPMSA(supra), at p.46, HH Judge Chambers QC referred to the “general benchmark” as being that set out by Waller, J.: “… because I find it difficult to conceive of circumstances falling short of that test that would relieve a party of the consequences of a bargain freely made.”
[16]Fourthly, notwithstanding the dispute in argument as to the relevant principles, I do not see the authorities as pointing in different directions – one line of authorities including The Fehmarn [1957] 2 Lloyd’s Rep. 551, The Chapparral [1968] 2 Lloyd’s Rep. 158, The Eleftheria(supra) and culminating in The El Amria(supra) in which factors of convenience are relevant and another line of authorities or observations (referred to more immediately above) in which such factors are irrelevant. Instead, to my mind, the authorities are to be explained in accordance with the conclusions already set out; they are substantially consistent, albeit that it is possible to observe a refinement or development in their approach to arguments designed to relieve a party from the consequences of a bargain freely made and contained in an EJC or a foreign jurisdiction clause. In this regard:(1) In The Eleftheria(supra), the first instance decision furnishing at least much of the foundation for the later Court of Appeal decision in The El Amria(supra), Brandon,J. himself said this (at p. 245): “ … I think that it is essential that the Court should give full weight to the prima facie desirability of holding the plaintiffs to their agreement. In this connection … the Court must be careful not just to pay lip service to the principle involved, and then fail to give effect to it because of a mere balance of convenience. ”(2) In BAe(supra), Waller,J. cited the The El Amria immediately prior to the central passage in his judgment to which reference has already frequently been made. It is inconceivable that either Waller, J., or those deciding the subsequent cases which have followed his approach, lost sight of the famous passage from The El Amria.(3) As already foreshadowed, the House of Lords in Donohue v Armco(supra) cited decisions from both suggested lines of authority without suggesting or even hinting at any difference of approach between them.[17]Fifthly, the importance to be attached to the question of governing law “….varies greatly from case to case and depends very much on the nature of the issues to which the action is likely to give rise.”: Mercury(supra), at p. 42. While, accordingly, little more need be said by way of principle in this regard, two matters may conveniently be mentioned at this stage:(1) Ordinarily at least, when a system of law assumes importance, it is because that system of law constitutes the governing law of the contract under consideration, not simply the law of the place of performance of certain obligations thereunder.(2) In any event, this Court is familiar with trying issues of foreign law; the mere fact that such an issue arises is most unlikely to go to the interests of justice whatever impact it may have (depending on the facts of the case and the nature of the issue) on considerations of convenience.[18]Sixthly, while a multiplicity of proceedings is, in general undesirable and very likely to some extent inconvenient, the gravity of the risks to which it gives rise and the weight to be given to this factor will turn on the facts of the individual case. Beyond that, generalisations are, again, unwise save that, typically, this consideration is likely to go to the interests of justice when either(1) the interests of parties other than the parties bound by the jurisdiction clause are involved and/or(2) the jurisdiction clause in question covers some but not all the grounds of claim forming part of the relevant dispute, so that parallel proceedings (concerning the same claim) are unavoidable: see, Donohue v Armco(supra), at pp. 433-434. In The El Amria(supra) itself, the Court declined to give effect to an Egyptian jurisdiction clause; factor (1), albeit not alone, was decisive. Likewise, considerations of this nature determined the outcome in Citi-March v Neptune Orient [1996] 1 WLR 1367.[19]Overview: I turn to the application of the relevant principles. As already seen, Mr. Hamblen QC’s major arguments in support of the application were contained under three broad heads going to(1) the importance of Chilean law;(2) evidence available for proceedings in Chile but unobtainable or only obtainable with difficulty for proceedings here; and(3) a multiplicity of proceedings, given the existence of the Chilean Metro claim. Whatever the position would or might have been as to the centre of gravity of this dispute without an EJC, I must of course determine the application in the light of the presence of the EJC, which indeed provides for both English governing law and (non-exclusive) English jurisdiction. It is plain that the parties have contracted for a neutral forum. Further, there is and can be no suggestion that CSAV, whose standard clause it is, was acting other than freely in agreeing the EJC. Strikingly, the present application involves CSAV resisting enforcement of the EJC which forms part of its own standard form bills of lading and arguing in favour of these proceedings (effectively) being transferred to a forum (Chilean arbitration) which that very clause seeks to treat as incompetent. In my judgment, with respect, neither individually nor cumulatively, do the three major arguments relied on by CSAV disclose “strong reasons” for permitting CSAV to depart from the bargain contained in the EJC. At the most these arguments go essentially to matters of convenience rather than entering into the interests of justice. Further, save perhaps for certain aspects of argument (3) (multiplicity of proceedings), such matters of convenience were eminently foreseeable at the time the bills of lading contracts, containing the EJC, were entered into. Proceeding in accordance with my conclusions on Issue (I) and on the basis (favourable to CSAV) that all three arguments are relevant, I am satisfied that they do not begin to outweigh the importance and desirability of giving effect to the EJC. It follows that I have reached the clear conclusion that the CSAV application must be dismissed. I elaborate on my reasons in the paragraphs which follow, by reference to the individual arguments deployed by CSAV.[20]The importance of Chilean law: This argument may conveniently be considered as follows: i) The starting point is the nature of the issues said to arise under Chilean law, as already summarised, namely:(1) whether CSAV was obliged to deliver the goods without presentation of original bills of lading and(2) whether it was open to CSAV to contract with the various operators in question, who were performing public functions, so as to require them to insist on presentation of original bills of lading. ii) As was common ground, the bills of lading were governed by English law. iii) Again as mentioned earlier, Chilean law was said to be relevant as the law of the place of performance of the contractual obligation (i.e., delivery), by reason of: (1) Art. 10(2) of the Rome Convention, which has the force of law in this country pursuant to s.2 of the Contracts (Applicable Law) Act 1990; (2) cl. 5 of the bills of lading, the provisions of which have been set out above. So far as relevant Art. 10 of the Rome Convention provides as follows:
“ Article 10 Scope of applicable law 1. The law applicable to a contract … shall govern in particular: (a) interpretation; (b) performance; … (d) the various ways of extinguishing obligations … … 2. In relation to the manner of performance ….regard shall be had to the law of the country in which performance takes place.”
Scope of applicable law iv) I accept that Chilean law is or may be relevant for the reasons suggested. However, in my judgment, it is of the first importance that these are English law contracts with a possible Chilean law “carve-out”. As it seems to me, what is involved here is not simply reaching a conclusion as to a question or questions of Chilean law but also determining the true scope of any Chilean law carve-out. For instance, questions may well arise as to where the substance of “performance” (Art. 10.1(b)) ends and “manner of performance” (Art. 10.2) begins: see East West(supra), at paras. 64 and 130-135. Metro has a contractual right under the EJC to have all such matters (i.e. Chilean law and its relevant scope) considered within the framework of an English law contract by this Court. Not only might a Chilean tribunal approach these matters with different “spectacles” but it would also (as already observed) be bound to deem the contracts to be governed by Chilean law. Nothing in this analysis points towards any “strong reasons” for disregarding the EJC; if anything, to the contrary, reflection as to the relationship between the governing law and the law of the place of performance points to the desirability of enforcing the EJC. This inclination is reinforced when regard is had to the Giuliano/Lagarde Report (“the Report”) on the Rome Convention, set out in The European Contracts Convention (2nd ed., 2001), Plender & Wilderspin, at pp. 302 and following; when dealing with Art. 10.2, the Report has this to say (at p.338): “ What is meant … by “manner of performance” of an obligation ? It does not seem that any precise and uniform meaning is given to this concept in the various laws and in the differing views of learned writers. The Group did not for its part wish to give a strict definition of this concept. It will consequently be for the lex fori to determine what is meant by “manner of performance”….. Article 10(2) says that a court may have regard to the law of the place of performance. This means that the court may consider whether such law has any relevance to the manner in which the contract should be performed and has a discretion whether to apply it in whole or in part so as to do justice between the parties.” v) For completeness, my views as to cl.5 of the bills of lading are, mutatis mutandis, the same as those expressed in connection with Art. 10(2) of the Rome Convention. vi) In the course of oral argument and on instructions, Mr. Hamblen QC made it clear that CSAV would undertake, as a condition of the grant of a stay, to confine its case in Chile to the argument that it was obliged as a matter of Chilean law to deliver the goods without presentation of the original bills of lading, as explained in paragraph 49 of the First Witness Statement of Ms. Uribe; CSAV would not contend in Chile that it was permitted to deliver the goods without presentation of the original bills of lading, a possible argument under Chilean law and Art. 4.2(b)(ii) of the Hamburg Rules. Accordingly, submitted Mr. Hamblen, there was no relevant difference between English and Chilean law (as English law would not insist on performance contrary to CSAV’s obligations under Chilean law) and therefore no prejudice to Metro in these proceedings being determined in Chile. With respect to this submission, essentially for the reasons given in the immediately preceding sub-paragraph, I am unable to accept it; absent strong reasons to the contrary, Metro is contractually entitled to have questions as to the scope of a Chilean law carve-out and any resulting questions of Chilean law determined within the framework of a contract governed by English law and by this Court. vii) The English Court is familiar with deciding questions of foreign law. No possible question going to the interests of justice arises in consequence of it doing so in this case. Nor am I swayed from this conclusion by the contention on the part of CSAV (recorded earlier) that as the issues under Chilean law concern the performance of public functions or duties they are of such “sensitivity” that they are better determined by a Chilean tribunal. I am prepared to assume that there may indeed be issues of particular sensitivity (such as, for instance, matters of national security) where considerations such as these may weigh heavily on a decision whether or not to give effect to an EJC. Suffice to say that the issues which arise in this case (as to delivery of goods other than against presentation of original bills of lading) are not of that nature; on any view, they are outweighed by the “general rule” that effect should be given to the EJC. viii) So far as East West(supra) is concerned, CSAV does not suggest and can have no realistic concern that an English Court would not consider fairly and afresh its arguments (should it pursue them) that this case was wrongly decided. In any event, as noted above, CSAV seeks to contend that East West is factually distinguishable; again it is simply unreal to suppose that this Court would find any undue difficulty in entertaining such an argument. ix) Considering this CSAV argument as a whole, I am satisfied that it gives rise at most to matters of “mere” convenience, as distinct from matters entering into the interests of justice. Moreover, such matters of convenience were or must have been foreseeable on entering into the bills of lading contracts. Inherent in the choice of a neutral forum was the risk that issues relating to the law of the place of performance would be decided other than in the courts of that place. In short, this CSAV argument fails to disclose any strong reason for not giving effect to the EJC.

Scope of applicable law

[21]Evidential matters: As already foreshadowed, CSAV submits that evidence which would be impossible or difficult to obtain for the English proceedings could be obtained by CSAV for use before a Chilean tribunal. In summary, CSAV’s concerns here, as expressed in the Witness Statements of Ms. Kay and Ms. Uribe, centre on the following matters:(1) The difficulties of obtaining evidence of fact from various witnesses in Chile, going to such matters as what documents were presented or seen and their usual practices and procedures.(2) The fact that, at present, the state-owned licensed customs warehouse operator at Iquique (“EPI”) is refusing to cooperate with CSAV’s investigation into the matter so that EPI’s documents relating to delivery of goods to Lucky Crown have not been made available to CSAV; it is said that EPI will not release its documents unless authorised to do so by the Chilean customs authorities and, in turn, that the customs authorities will not authorise such release absent an order from a Chilean Court or tribunal; it is further said that CSAV’s interests cannot be assumed to be the same as those of these other Chilean entities.(3) The fact that documents confiscated by the Chilean Customs Court in the course of a continuing criminal investigation into Lucky Crown will only be shown by that Court to another Court or tribunal in Chile.(4) In answer to the obvious retort that evidence for proceedings in this jurisdiction can be sought by way of letters of request from this Court to the judicial authorities in Chile (pursuant to CPR Part 34.13), it is asserted that such letters are less satisfactory and, in effect bluntly, will result in a much lower level of cooperation, than if CSAV was seeking such evidence under the authority of an order from a Chilean Court or tribunal; it is for instance said that whereas principles of confidentiality will result in letters of request proving ineffective to obtain the documents seized by the Chilean Customs Court, there is every chance that inspection of the selfsame documents would be permitted for purposes of proceedings before a Chilean domestic tribunal (Ms. Kay’s second Witness Statement, paragraphs 42-43). In summary, as it is put by CSAV in its skeleton argument (at paragraph 54):
“ The above analysis reveals not only that all the essential evidence is to be found in Chile, and that Chile is clearly and distinctly the most appropriate forum for the resolution of the disputes, but that it is in the interests of justice that the disputes are determined in Chile. There is essential evidence ….. which may never emerge if the case is determined before the English Court. This of itself provides strong reason for a stay. Furthermore, in so far as it is necessary, CSAV contend that the difficulties in obtaining essential evidence in Chile in support of English proceedings was not something which was readily foreseeable at the time of the contract.”
[22]I am, with respect, unable to accept these submissions on the part of CSAV as giving rise to “strong reasons” for not holding the parties to the bargain contained in the EJC. As it seems to me, these are almost paradigm matters of convenience, eminently foreseeable at the time of entry into the bills of lading contracts, containing the EJC as they did. Such difficulties as may arise appear to me to be the price the parties agreed to pay in terms of convenience for the benefit of obtaining a neutral forum. For my part, I do not see such questions as impinging on the interests of justice nor, in any event, that substantial justice cannot be done in these English proceedings – bearing in mind that in determining where “justice” lies the starting point must be the parties’ contractual bargain for a neutral forum. In a little more detail: i) As to factual witnesses, such difficulties as are asserted manifestly go to matters of convenience only. ii) As to the alleged present difficulties of obtaining cooperation from Chilean state entities and the suggested stance of the Chilean Court or customs authorities, I am not attracted to what is essentially a counsel of despair; CSAV’s evidence in this regard is disputed by Metro’s evidence; the alleged present non-cooperation may change; I would require very strong evidence indeed before accepting that the Chilean Court would not afford assistance to this Court pursuant to the letters of request procedure, albeit that the use of that procedure may be time-consuming. iii) In any event, cases of non- or mis-delivery of goods are, unfortunately, everyday matters in maritime disputes. Very likely in such cases, much of the documentary evidence may be located in the discharge port. Where parties choose a neutral forum instead of submitting their disputes to the forum of the place of discharge, they must know or must be taken as knowing that documentary or evidential difficulties might arise in this very regard. If and to the extent that the procedure for obtaining evidence by letters of request should prove more time-consuming or less effective than the order of a domestic court at the port of discharge, that was hardly unforeseeable at the time of entering into the bills of lading contracts, nor is it a strong reason for releasing a party from its contractual bargain.[23]A multiplicity of proceedings: To recap, founding himself on the fact of the Metro Chilean claim proceeding in Chile, Mr. Hamblen QC submitted that to hold CSAV to the EJC in respect of the present claim would result in a multiplicity of proceedings carrying the inherent risk of inconsistent outcomes. The parties were identical and the issues (at least to the extent set out in paragraph 5 iii) above) were the same or similar; this consideration went beyond convenience and to the interests of justice. Moreover, witnesses (or some of them, such as experts) would be required to give evidence twice and additional costs would be incurred. CSAV could not be required to waive the time bar so as to permit the Metro Chilean claim to proceed in England; nor could Metro benefit from having “missed” the time bar (paragraph 5 iii) above). Instead, the EJC should not be enforced against CSAV and Metro would be free to bring the present claim before the same Chilean arbitrator who has been appointed to determine the Metro Chilean claim.[24]I have anxiously weighed this argument but am not persuaded by it to decline to hold CSAV to the bargain contained in the EJC. I proceed here on the basis that CSAV cannot be obliged to waive the (English) time bar in respect of the Metro Chilean claim and on the assumption that it chooses not to do so. My reasons are these: i) I accept that the existence of two sets of proceedings involving the same parties, following relatively closely one upon the other and, to the extent already set out, dealing with the same or similar issues, is likely to result in a measure of inconvenience. I have in mind, in particular, that extra costs may be incurred, insofar as expert witnesses and perhaps others may have to give evidence twice over. ii) I further accept that the timing of the two contemplated sets of proceedings was unforeseeable at the time of entry into the bills of lading contracts containing the EJC; there was simply no reason to suppose in May to August 2000, that these proceedings and the Chilean Metro claim would follow relatively closely one upon the other. Thus far, at least, I see force in this CSAV argument. iii) It is, however, critical to maintain perspective: a) Given the non-exclusive nature of the EJC, it was not unforeseeable that CSAV might face cargo claims giving rise to the same or similar issues in different jurisdictions, possibly involving the same parties. All that is unforeseeable here is the coincidence of timing of the two contemplated sets of proceedings. b) Furthermore, there is no question here of the two sets of proceedings covering the same claims. These English proceedings concern shipments between May and August 2000. The Metro Chilean claim concerns shipments between February and April 2000. The claims are separate and distinct. c) As already observed, the Metro Chilean claim will be determined (wholly) in accordance with Chilean law. By contrast, English law will be applied to these proceedings, save in respect and to the extent of any Chilean law “carve-out”. The importance of such considerations has already been underlined in the context of the earlier discussion as to Chilean law. Here, the fact that, at the very least, the Chilean tribunal and the English Court will be approaching the disputes of which they are seized within different legal frameworks, serves to eliminate or reduce any embarrassment which otherwise might be said to flow from “inconsistent” outcomes. Further, for reasons similar to those discussed earlier, it is important to weigh in the balance Metro’s contractual entitlement under the EJC. d) It is fair to record that the Metro pleaded claim in these proceedings raises allegations of tortious breach of duty in addition to alleged breach of contract. As a matter of English private international law, the applicable law in respect of any such claim in tort is Chilean law: Private International Law (Miscellaneous Provisions) Act 1995, s. 11(1). There is, however, no or no serious suggestion of there being any separate proceedings in respect of Metro’s claim in tort.Realistically, this dispute turns on Metro’s contractual claim, falling squarely within the EJC, both as to governing law and jurisdiction; should CSAV’s contractual defences prevail, Metro’s prospects of success in tort are remote indeed; if Metro succeeds in contract, the tort claim is academic. There is no question of the involvement of third parties, not bound by the EJC. iv) In all the circumstances, I am unable to accept that the risk of “inconsistent” outcomes postulated by CSAV would constitute the “disaster” which proved decisive to the outcome in The El Amria(supra). This argument does not, accordingly, engage the interests of justice. Assuming in CSAV’s favour a degree of inconvenience, including the unforeseeable element, to which I have already referred, this factor is nonetheless outweighed by the importance and desirability of holding CSAV to the bargain contained in the EJC. In summary, the argument of multiplicity does not disclose a strong reason, so as to make it appropriate to exercise the Court’s discretion not to enforce the EJC. v) Put another way, as to the Metro Chilean claim, Metro must “pay” for its lateness in commencing proceedings by giving up its contractual right to have that dispute determined by this Court applying English law. In my judgment, it simply does not follow that Metro must additionally be deprived of its contractual right to have its claim in this earlier action, determined by this Court applying English law.

MISCELLANEOUS

[25]For completeness: i) In the course of argument, Mr. Hamblen QC canvassed but did not press a “via media”, involving a trial of a preliminary issue or issues, as I understood it, of the matter left open by Thomas,J. in para. 135 of his judgment in East West (supra) and (in summary) going to the relationship between and the true scope of “performance” and “manner of performance”. Such a route would entail dismissing the CSAV application to set aside these proceedings but not ruling finally at this stage on the CSAV application for a stay of these proceedings. After careful consideration I am not attracted to such an approach; to my mind, it is not warranted in a claim of this size. The parties’ interests are best served by my ruling finally on the CSAV application, one way or another. ii) I record that Mr. Parsons contended that there was an additional reason for holding the parties to the bargain contained in the EJC, namely that proceedings in this country would in any event continue because in relation to one of the cargoes carried on a ship not owned by CSAV, Metro has a claim in rem against the shipowners. In the event, this point is academic; had it been otherwise, then, in short, having regard to the apparent weakness of the in rem claim, I would not have been inclined to accept this argument of Mr. Parsons.[26]If I may say so, this matter has been excellently argued on both sides and I was most grateful to Mr. Hamblen QC and Mr. Parsons and their respective teams. In the event, for the reasons given, the CSAV application must be dismissed.

Cited in 11 later judgments

and 2 more of the most senior