Navig8 PTE Ltd v Al-Riyadh Co for Vegetable Oil Industry [2013] EWHC 328 (Comm)

Case No 2012-651[2013] EWHC 328 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 22/02/2013
Before
MR JUSTICE ANDREW SMITH
Between
Navig8 Pte LtdClaimantAl-Riyadh Co for Vegetable Oil IndustryDefendant
Luke Pearce (instructed by Holman Fenwick Willan LLP) for Applicant DefendantMichael Collett (instructed by Jackson Parton) for Respondent ClaimantHearing Hearing dates: Friday 25 January 2013
Judgment
[1]This is an application by the defendant, a Jordanian company, to whom I refer as “Al-Riyadh”, to challenge the jurisdiction of the court over these proceedings brought by the claimant, a Singaporean company, whom I call “Navig8”. Navig8 served them in Jordan, having been permitted to do so by Hamblen J on 9 May 2012. Al-Riyadh contend that the court does not have jurisdiction to hear Navig8’s claims and should not exercise it even if it has.[2]The dispute concerns a shipment on the “Lucky Lady” of palm oil and palm olein from Malaysia to Jordan between 19 December 2011 and 22 January 2012, which was apparently delivered in poor condition and was rejected by Al-Riyadh. There is a question whether the complaint is attributable to its condition on shipment or its handling thereafter. Al-Riyadh bought the cargo from the shippers, Pacific Inter-Link SDN BHD (“PIL”), a Malaysian company. The owners of the ship were Ladies Shipping Ltd (“LSL”), a Maltese company, who had time chartered her to Navig8, who in turn sub-chartered her to PIL on a Shelltime 4 form dated 7 March 2008. The sub-charter was governed by English law because of an express provision in clause 21 (“This contract is governed by English law …”) and because it incorporated clause 41(A) of the Shelltime 4 form, providing that “This charter shall be construed and relations between the parties determined in accordance with the laws of England”. It also provided for arbitration in London under the rules of the London Maritime Arbitrators Association.[3]The cargo was carried under five bills of lading, each of which incorporated the terms of the sub-charter by providing that, “This shipment is carried under and pursuant to the terms of the charter dated 7 March 2008 at Kuala Lumpur between [Navig8] as Owners and [PIL] as charterers, and all conditions liberties and exceptions whatsoever of the said Charter apply to and govern the rights of the party concerned in this shipment …”. They also provided (in what I shall call an “exclusion provision”) that, “It is understood and agreed that, other than the said shipowner or demise charterer, no person, firm or corporation or other legal entity whatsoever, is or shall be deemed to be liable with respect to the shipment as carrier, bailee or otherwise in contract or in tort. If, however, it shall be adjudged that any other than said shipowner or demise charterer is carrier or bailee of the said shipment or under any responsibility with respect thereof, all limitations of or exonerations from liability and/or defences provided by law or by the terms of the contract of carriage shall be available to such other”. On or about 2 February 2012 Al-Riyadh issued proceedings for damages before the Aqaba Court of First Instance in Jordan against PIL (as sellers of the cargo) and Navig8 (as carriers under the bills of lading). The basis of the contention that Navig8 are carriers is that the bills do not refer to LSL, but provide that “This shipment is carried under and pursuant to the terms of the Charter dated 07th MARCH 2008 AT KUALA KUMPAR Between [Navig8] SINGPAPORE as Owners and [PIL] as Charterers …. The contract of carriage evidenced by this Bill of Lading is between the shipper, consignee and/or owner of the cargo and the owner or demise charterer of the Vessel named herein to carry the cargo described above” (emphasis added); and Al-Riyadh argue that because of the underlined words the Jordanian court is likely to interpret the bills as evidencing contracts with Navig8 as carriers.[4]At about the same time as they brought the Jordanian proceedings, Al-Riyadh arrested the vessel and obtained security for claims against LSL, but they did not bring proceedings against them. Al-Riyadh contend that, as a matter of Jordanian private international law, the Jordanian court has jurisdiction over their claims against PIL and Navig8 because they concern a shipment to a Jordanian port: Jordanian law has enacted article 21.1(c) of the United Nations Convention on the Carriage of Goods by Sea, 1978 (the “Hamburg Rules”), which provide that: “In judicial proceedings relating to carriage of goods under this Convention the plaintiff, at his option, may institute an action in a court which according to the law of the State where the court is situated, is competent and within the jurisdiction of which is situated one of the following places… (c) the port of loading or the port of discharge…”; The Jordanian Maritime Commerce Act no 12 of 1972 provides that, notwithstanding any provision of any other law, any clause or agreement which purports to make the Jordanian courts incompetent to judge disputes emanating from bills of lading or carriage by sea shall be void. It was common ground before me that as a matter of Jordanian private international law the lex causae of Al-Riyadh’s claim against Navig8 is Jordanian. Further, although Navig8 plead in these proceedings that Al-Riyadh’s claim in the Jordanian action is “hopeless” (and, as I shall explain, Mr Michael Collett, who represented Navig8, made submissions about difficulties facing the claim), it was also not in dispute that under Jordanian law Al-Riyadh’s claims have a real prospect of success, including their contention that Navig8 are carriers under the bills of lading contracts. Indeed, according to a witness statement dated 14 September 2012 of Mr Nicholas Parton of Jackson Parton, Navig8’s solicitor, their Jordanian lawyer considers that because the Jordanian court will apply Jordanian law this “could well lead to a different conclusion on the liability of Navig8 from that which would be reached under English law” (meaning, presumably, that the claim in Jordan could well succeed).[5]These proceedings were issued on 10 May 2012; the day after Hamblen J had given permission for service out of the jurisdiction. At the same hearing on 9 May 2012 he had refused an application for an anti-suit injunction, which had been sought on two bases. First, it was argued that the bills of lading contracts incorporated from the sub-charter the agreement for London arbitration. This (hopeless) contention was rejected because general words of incorporation such as those in the bills do not cover an arbitration agreement, and no attempt has been made to resurrect it in these proceedings. The other argument was that the Jordanian proceedings were in any event (as Mr Parton put it) “vexatious, oppressive and designed to bully [Navig8] into paying a claim without being able to defend themselves in a fair and appropriate manner”. The argument did not succeed before Hamblen J, but Mr Collett submitted before me that the prosecution of the Jordanian proceedings is indeed vexatious and oppressive.[6]The claim form set out both substantive relief and procedural orders sought by Navig8:(i) an anti-suit injunction;(ii) permission to serve the claim form out of the jurisdiction;(iii) permission to serve the claim form by an alternative method;(iv) “damages generally, including, but not limited to, damages for breach of the jurisdiction agreement”; and(v) a “declaration that the Claimant is not a party to the contracts of carriage evidenced by the five bills of lading …”. However, the focus of the application to serve proceedings out of the jurisdiction was wholly on the claim for an injunction: the claims for damages and a declaration were not even mentioned in Mr Parton’s witness statement in support of it. I have no information about what Hamblen J was told about these other claims, except that he saw a draft claim form. (Mr Collett did not appear on the applications: they were made by a solicitor, not counsel.)[7]On 6 June 2012 Al-Riyadh filed an acknowledgment of service indicating their intention to contest jurisdiction. On 19 June 2012 Navig8 served particulars of claim, and the prayer was for this relief: i) declarations that(i) Navig8 are not party to the contracts contained in or evidenced by the bills of lading,(ii) Navig8 were not at any material time bailees of or in possession of the cargo to which they relate, and(iii) Navig8 are under no liability to Al-Riyadh in respect of the cargo; ii) a final injunction restraining Al-Riyadh from maintaining any proceedings in the courts of Jordan against Navig8 or commencing any proceedings in respect of the cargo to which the bills of lading relate otherwise than in England; iii) “equitable damages” on the basis that Navig8 had suffered loss and damage because Al-Riyadh had commenced and continued the Jordanian proceedings; iv) interest under section 35A of the Senior Courts Act 1981 or in the inherent jurisdiction of the court; v) further or other relief; and vi) costs. Thus, the prayer includes claims for declarations that were not in the claim form and for which, it seems and as I conclude, permission to serve proceedings out of the jurisdiction had not been sought or granted.[8]On 27 July 2012 Al-Riyadh brought the application challenging the jurisdiction of this court. It was supported by a witness statement of Ms Alice Marques, a solicitor with Holman, Fenwick Willan LLP, Al-Riyadh’s solicitors. On 14 September 2012, Mr Parton made his further witness statement in response to Ms Marques’ and in support of applications by Navig8 for summary judgment on the claims for declarations and an interim anti-suit injunction. Navig8 made the applications on 14 November 2012, but on 17 December 2012 Popplewell J directed that they should not be heard until after Al-Riyadh’s application and, if it is successful, Al-Riyadh had had 14 days to decide whether to submit to the jurisdiction of this court. Accordingly, Navig8’s applications are not before me.[9]Meanwhile, on 14 May 2012 Navig8, having been refused an anti-suit injunction by Hamblen J, had submitted a full defence on the merits to Al-Riyadh’s claim in Jordan, and also petitioned that the claim should be dismissed for lack of jurisdiction. The basis of the challenge to jurisdiction was that the bills of lading contracts incorporated the arbitration agreement in the sub-charter, the argument that had been rejected as a matter of English law by Hamblen J: it has not been determined by the Jordanian court. Nevertheless, in their “statement in response” in the Jordanian proceedings Navig8 stated that they “[avow] the jurisdiction of your distinguished court”. According to Mr Parton’s second witness statement, that is a typing error, and Navig8 have so stated in a further pleading in the Jordanian proceedings. Mr Parton’s evidence, based on what Navig8’s Jordanian lawyer had said, is that Jordanian procedural law allows such errors to be corrected. Al-Riyadh do not accept that the statement in response was an error and, according to a further statement of Ms Marques, Al-Riyadh’s Jordanian lawyer considers that “there is a real possibility in Jordan that Navig8 have already submitted to the jurisdiction of the Jordanian court”. I am not in a position to determine this question and neither Mr Collett nor Mr Luke Pearce, who represented Al-Riyadh, suggested that I should do so.[10]The English court will only accept jurisdiction if Navig8 can demonstrate in respect of a claim(i) that there is a good arguable case that it is covered by one of the grounds (or passes through one of the so-called “gateways”) stated in paragraph 3.1 of Practice Direction 6B (the “Practice Direction”) to the Civil Procedure Rules (“CPR”) or part 62.5 of the CPR;(ii) that the claim has reasonable prospects of success;(iii) that England and Wales is the proper place to bring it; and(iv) as a matter of discretion permission for service out of the jurisdiction should be given. It is for Navig8 to establish these matters notwithstanding that Al-Riyadh are applying to set aside Hamblen J’s[11]Mr Collett accepted that, if the court does not uphold the permission in relation to the claims (or at least one of the claims) for declaratory relief, it will not uphold it for the other claims. He submitted that the claim for injunctive relief need not be included in the claim form because, if the claims for declarations succeed, the court will have jurisdiction to make an injunction ancillary to them; and he relied for the claim for damages upon section 50 of the Senior Courts Act, which derives from Lord Cairns’ Act, the Chancery Amendment Act, 1852, and provides that, where the court has jurisdiction to order an injunction or specific performance, it may award damages in addition to or in substitution for an injunction. (As I shall explain, during the hearing Mr Collett introduced a further submission that Navig8 have a claim for common law damages for breach of contract, but I shall come to that later.) This formulation of Navig8’s contentions is a marked change from the case presented to Hamblen J when permission to serve in Jordan was granted.[12]Mr Collett’s approach does not mean that the claims for an injunction and equitable damages need not be considered. They are relevant to whether any practical benefit would ensue from negative declaratory relief. In any case, as Mr Pearce said, Al-Riyadh’s application is to set aside the permission to serve out of the jurisdiction the claim form that was issued: it might be that Navig8 could apply to serve a different claim form out of the jurisdiction, but that, Mr Pearce submitted, is not a reason to refuse Al-Riyadh’s application.[13]I shall therefore start with Mr Pearce’s argument about the claim for an injunction. He submitted: i) That Navig8 do not have a good arguable claim that the claim is covered by one of the grounds for granting permission; ii) That they do not have a reasonably arguable case that the claim will succeed; and iii) That the claim for an injunction is not designed to ascertain substantive rights.[14]Navig8 sought permission from Hamblen J under CPR 62.5(b) and under the Practice Direction. CPR 62.5(b) allows the court to permit service out of the jurisdiction of a claim for an order under section 44 of the Arbitration Act, 1996, but no such claim is now made. Their other argument was that the pursuit of the Jordanian proceedings was vexatious and oppressive and the claim was within the paragraph 3.1(6)(c) of the Practice Direction that covers claims made “in respect of a contract where the contract … is governed by English law”. There is no dispute that Navig8 have (at least) a sufficiently strong argument for present purposes that the contracts evidenced by the bills of lading are, under English private international law, governed by English law. The question is whether they have a good arguable case that the claim for an injunction is “in respect of” them. In my judgment they do not. In Alliance Bank JSC v Aquanta, [2012] EWCA Civ 1588, where claims were brought in fraud by claimants who alleged that they were induced to make security contracts governed by English law, Tomlinson LJ, giving the judgment of the court, said (at para 71) that “unless the claimant is suing in order to assert a contractual right or a right which has arisen as a result of non-performance of a contract, his claim is not in this context properly to be regarded as one made in respect of a contract”. When this test is applied, the claim for an injunctive relief on the grounds that foreign proceedings are vexatious or oppressive falls outside paragraph 3.1(6)(c): no contractual right is asserted and no right resulting from any (actual or threatened) non-performance of a contract is asserted.[15]I also accept Al-Riyadh’s submission that Navig8 do not have a reasonably arguable case for an injunction. Leaving aside cases of an anti-suit injunction to restrain breach of contract (usually of an agreement for exclusive English jurisdiction or an arbitration agreement), the court will grant an anti-suit injunction only if the (actual or threatened) conduct of the party to be injuncted is unconscionable: Star Reefers Pool Inc v JFC Group Ltd, [2012] EWCA Civ 14. Navig8’s argument is that the Jordanian proceedings are vexatious and oppressive because: i) The claim in Jordan is brought under Jordanian law, although under English private international law the governing law of the bills of lading contracts is English. ii) Under English law, Al-Riyadh have no claim against Navig8 under the bills of lading contracts because Navig8 are not party to them, and there is not other basis on which they might be liable. iii) Moreover, under English law, Navig8 are entitled to the protection of the exclusion provision and their liability is governed by the Hague Rules, which the bills of lading contracts incorporated, whereas under Jordanian law and in the Jordanian court their liability would be governed by the Hamburg Rules, which would afford them less protection.[16]Thus, Navig8 contend that the Jordanian proceedings would defeat, and are designed to defeat, their rights under English law, the governing law of the bills of lading contracts. Mr Collett emphasised that English law governs the contracts because of the parties’ choice in that they incorporated the terms of the sub-charter, which contained an express choice of English law: see Dicey, Morris & Collins, The Conflict of Laws (15th Ed, 2012) para 32-061. Navig8 also contend that under English law, although they are not party to the bills of lading contracts, they are protected by the exclusion provision because of the Contracts (Rights of Third Parties) Act 1999 (the “1999 Act”), which allows a third party to enforce a contractual term that purports to confer a benefit on him (provided that the third party is sufficiently identified in the contract and subject to and in accordance with the relevant terms of the contract); and by section 1(6), “Where a term of a contract excludes or limits liability in relation to any matter references in this Act to the third party enforcing the term shall be construed as references to his availing himself of the exclusion or limitation”. By section 6 of the 1999 Act, although third parties generally have no such statutory rights in relation to a contract for the carriage of goods by sea (including contracts evidenced by bills of lading), they may avail themselves of an exclusion or limitation of liability in such a contract.[17]Is, therefore, Al-Riyadh’s conduct in bringing the Jordanian proceedings unconscionable, or does it threaten to be so? The proceedings do not have the characteristics of many foreign proceedings that the English court has considered to be brought or prosecuted unconscionably. They were brought comfortably before the English proceedings, which were themselves commenced only a few days before Navig8 pleaded to the merits in Jordan. As I shall explain later, the Jordanian proceedings are relatively advanced. It is pleaded in support of the contention that the Jordanian proceedings against Navig8 are vexatious and oppressive that the security does not respond to a judgment against or settlement with Navig8, but I see nothing in that: proceedings are not oppressive or vexatious because the claimant has no security for them. Navig8 plead that “In all the circumstances, Al-Riyadh’s claim against Navig8 is hopeless”, the circumstances being, as I interpret the pleading, that Al-Riyadh are bound by the agreement to English law in the bills of lading contracts, that Navig8 are not a party to those contracts or bailees under English law, and that English law would give Navig8 the protection of the exclusion provision and the Hague Rules. I do not regard the claim in Jordan as hopeless for any of these reasons, or see a reasonably arguable case that it is: the contention is not available to Navig8, given what their Jordanian lawyer apparently told Mr Parton and that they do not dispute (as it is at least for present purposes) that the Jordanian courts might accept that Navig8 were party to the bills of lading contracts.[18]Mr Collett sought to develop an argument that the complaint about the cargo clearly arises from its pre-shipment condition. He pointed out that Al-Riyadh asserted their claim against PIL in correspondence on the basis that pre-shipment tests show free fat acid content in excess of specification and there was no significant change between samples at the loadport and those taken on discharge; and that this is how LSL answered the complaint. I do not accept Mr Collett’s submission: this point was not pleaded by Navig8 as a reason that the claim against Navig8 is hopeless and the evidence of Ms Marques is that it is “a real possibility” that the cargo was damaged during shipment. Mr Parton complains in response that this statement has not been particularised, but does not explain why this point is not pleaded by Navig8. I consider that I should for present purposes accept Ms Marques’ evidence.[19]Further, whereas it has not been decided whether Navig8 have submitted to the Jordanian jurisdiction, Al-Riyadh have not submitted to this court’s jurisdiction: as Rix LJ said in the Star Reefers Pool case (cit sup at para 30): “… where a foreign defendant, impleaded in England, does not submit to the jurisdiction, and has not agreed to litigate or arbitrate in England, it is not obviously easy to visualise how his foreign proceedings will impede the English proceedings, or why an anti-suit injunction will be necessary to protect the English claimant’s legitimate interest in his English action. Ex hypothesi the English action will not be opposed. … Thus, it has been recognised that the unconscionability of the foreign claimant is often to be found, mainly or substantially, in the very reason that he has first submitted to English jurisdiction as the forum where the parties’ dispute will be resolved and then sought vexatiously to extricate himself from the consequences of that submission, or oppressively to prolong or multiply the litigation by commencing further proceedings abroad.[20]I therefore conclude that Navig8 should not have permission to serve out of the jurisdiction a claim for an injunction as presented to Hamblen J and as pleaded in the Particulars of Claim. It follows that there is no proper basis for permission to serve out of the jurisdiction a claim for equitable damages under section 50 of the Senior Courts Act, 1980.[21]However, at the hearing Mr Collett developed a different case for an injunction, and formulated it in a draft pleading as follows: “By its prosecution of the Jordanian proceedings, Al-Riyadh seeks to prevent Navig8 from availing itself of the exclusions and limitations of liability” in the exclusion provision. His argument is, I think, that the parties to the bills chose English as the governing law, and under English law Navig8 have a right under the 1999 Act to the protection of the exclusion provision. Since the Jordanian proceedings threaten that right, Navig8 are entitled to have them restrained and, in that their right arises from the bills of lading contracts, such a claim for an anti-suit injunction is “in respect of” a contract governed by English law and covered by the Practice Direction. He also formulated a claim for damages for breach of such a right. He submitted that the position is analogous to that in West Tankers Inc v Ras Riunione Adriatica di Sicurta, the “Front Comor”, [2005] EWHC 454 (Comm), in which the claimants had an arbitration agreement with the defendants’ insured and an anti-suit injunction against the defendant insurers to restrain them from pursuing a claim against the claimants was made in order to protect the claimants’ right to have the dispute arbitrated. To put it another way, since Al-Riyadh assert a claim against Navig8 on the basis that they are party to the bills of lading contracts, the matter must be considered on the basis that Al-Riyadh and Navig8 chose English law to govern their relationship: the implication of that choice is that neither party would act so as to defeat the rights of the other or to circumvent their duties under English law.[22]I reject this argument: I do not think that this is a good arguable claim. The 1999 Act does not confer a right comparable to that in the “Front Comor” case, and in any case I cannot accept that by bringing or pursuing the Jordanian proceedings Al-Riyadh are contravening any (contractual or other) duty owed to Navig8. Navig8’s argument assumes that they cannot invoke the exclusion provision in the Jordanian proceedings. Even if so, it is not because the Jordanian courts would not recognise the exclusion provision or rights under the 1999 Act, but, it appears, because Jordanian private international law would hold that the relationship is governed by Jordanian law. (It was common ground before me that the 1999 Act only applies to contracts of which the governing law is English: see Dicey, Morris and Collins, The Conflict of Laws (cit sup) para 12-11.) In effect, therefore, Navig8’s argument asserts a right, deriving apparently from the choice of English law, not to be sued in any jurisdiction that does not give effect to a choice of English law that is recognised by English private international law, at least unless the foreign jurisdiction recognises rights similar to those recognised by English law. There is no proper basis for so wide a proposition. In any case, as Mr Pearce explained, Al-Riyadh’s claim in Jordan does not seek to circumvent any protection that Navig8 would have under the 1999 Act under English law. Their contention is that on the proper interpretation of the bills of lading contracts the expression “Owners” refers to Navig8 and so as a matter of contractual interpretation they are not protected by the exclusion provision. I conclude that Navig8 should not be permitted to serve out of the jurisdiction a claim for an injunction or for damages.[23]I come to the declaration claims. Mr Pearce recognised that the courts can permit service of claims for negative declaratory relief out of the jurisdiction, but contended that permission should not be given in this case. He submitted first that Navig8 have not demonstrated clearly or distinctly that England is the proper forum for such a claim. I must, like Staughton J in the Spiliada case (see Spiliada Maritime Corp v Canulex Ltd, [1987] 1 AC 460, 468G), assume that the dispute will come to trial (in either England or Jordan), and I ignore the possibility that, after expensive jurisdictional battles, Al-Riyadh might succeed in a claim against PIL or the owners and not pursue their claim against Navig8. On this basis have Navig8 demonstrated clearly or distinctly that England is the natural and appropriate forum?[24]It is incumbent upon a defendant who challenges the jurisdiction of the English court “so far as possible to identify the issues concerned and to state as clearly as possible how they arise or may arise in the proceedings”: VTB Capital plc v Nutritek International Corp, (cit sup) para 36, Dicey, Morris & Collins, The Conflict of Laws (15th Ed, 2012) para 11-143. According to Ms Marques, the dispute is “as to the precise cause of the problems with the cargo, and in particular whether the damage was caused during the shipment of the cargo and as such was the responsibility of the carriers, or whether the damages stemmed from the cargo’s pre-shipment condition, in which case responsibility would lie on the sellers”. This embraces both whether the damage was suffered during shipment and whether, if so, the carriers are responsible for it. There is also, of course, the issue about whether Navig8 were carriers under the bills of lading contracts, a question which, as far as appears from the evidence and submissions before me, turns upon the proper interpretation of the bills: there is no suggestion of relevant oral communications about this, or that there would be oral evidence about the contractual circumstances or matrix. Nor is there any real reason to think that there are likely to be issues about whether the cargo was damaged on delivery, the extent of the damage, any diminution in the cargo’s value or other dispute about the quantification of the loss (although Ms Marques does state without giving any particulars that “It will … be necessary to determine the quantum of Al-Riyadh’s loss”). According to Ms Marques, Navig8 contend in Jordan that Al-Riyadh accepted the cargo without reservation and under the Jordanian Civil Code waived any right to complain about it, but there is no indication of such an issue in this action if it proceeds.[25]Al-Riyadh are a Jordanian company: no one connected with the dispute is English. It is about a shipment to Jordan, where the (alleged) damage to the cargo was identified. It was inspected in Jordan by Jordanian residents, from whom, according to Ms Marques, it is “highly likely” that Al-Riyadh will wish to adduce evidence: Mr Nesam Al-Ashqar first investigated the damage, and Captain Isam Al-Shadi did so at the request of the Aqaba Court. But the issue about the cause of the damage will depend at least partly upon sample analysis reports at the load port and the cargo port, and, while some analysis was done in Jordan, there was a joint independent analysis of the load port samples on behalf of LSL and Al-Riyadh in London. (Mr Pearce did not invoke as a reason that Jordan is the proper forum that PIL are party to the proceedings there, and that Al-Riyadh should be able to have heard together their claims about why the cargo was damaged so as to avoid conflicting decisions. It was suggested during the hearing that the Jordanian action is not proceeding against PIL because of an arbitration agreement between Al-Riyadh and PIL, but there was no evidence about this, and counsel did not have complete and reliable instructions. This consideration would not affect any of my conclusions.)[26]Navig8’s argument about the proper forum rests on English being the lex causae because of the parties’ choice of a contractual governing law. The other considerations invoked in support of an English forum are not important. Navig8 belong to an English P&I Club, but the claims handlers are based in Singapore. Navig8 are, according to Mr Parton, “involved in London arbitrations concerning this dispute under(a) its charterparty and(b) its contract of affreightment with PIL”, but no details of them are in evidence.[27]Mr Collett argued that, English law being the lex causae, Navig8 are entitled to vindicate their rights under English law in this court and that they cannot do so elsewhere. An English lex causae can be a powerful indication that England is the natural forum, but its importance depends upon the circumstances of the particular case, and it is not in itself conclusive: as is said in Briggs and Rees, Civil Jurisdiction and Judgments (5th Ed, 2009) para 4-83, “… a claimant who can, in essence, say no more than that he may win in England but will lose if forced to go overseas has not done enough to satisfy the court that England is the proper place to being the claim. Claimants do not have a vested right to win: the fact that they may win in England but not overseas cannot make England the proper place to bring the claim. In the great majority of cases, there will be no more to say about it than that”. The question is still whether Navig8 have shown clearly or distinctly that in all the circumstances England is the natural and appropriate forum. Indeed, in F R Lurssen Werft v Halle, [2009] EWHC 2607 (Comm) Simon J said at para 49, in a passage cited by Mr Pearce, that, “… it is clearly recognised that it is an exceptional course to require a foreigner to litigate in the English court purely on the basis that English law is the governing law of the contract”.[28]However, Mr Collett did not rely simply on the fact that (under English private international law) English law governs the dispute and putative contracts between Al-Riyadh and Navig8: he also relied upon(i) the fact that the putative parties to the bills of lading contracts chose English law and(ii) the apparent differences (relevant to the parties’ dispute) between English and Jordanian law. In VTB Capital plc v Nutritek International Corp, (cit sup) Lord Mance said at para 46:
“The governing law, which is here English, is in general terms a positive factor in favour of trial in England, because it is generally preferable, other things being equal, that a case should be tried in the country whose law applies. However, that factor is of particular force if issues of law are likely to be important and if there is evidence of relevant differences in the legal principles or rules applicable to such issues in the two countries in contention as the appropriate forum …” (The judgments in this case were delivered after the hearing before me, but at my invitation counsel submitted written comments on the judgments.) Lord Mance’s observation was obiter, but Mr Collett submitted that it presents a “synthesis” of the approach of the Court of Appeal in Seashell Shipping Corp v Mutualidad e Seguros del Instituto Nacional de Industria (The “Magnum” ex “Tarraco Augusta”), [1989] 1 Ll L R 47, 53 and the High Court in such cases as Stonebridge Underwriting v Ontario Municipal, [2010] EWHC 2279 at paras 36, 37 and Golden Ocean v Salgaocar, [2011] EWHC 56 at para 143. I agree: these are cases where the parties had (expressly or impliedly) chosen English law and Lord Mance was considering a tort claim in deceit, but the passage that I have cited is, as I understand it, of general application and is, of course, from the leading majority judgment. But the fact that English law is the lex causae as a result of a choice made by Al-Riyadh makes it all the more important in identifying the proper forum. In The “Magnum” (cit sup) Parker LJ said “it would be unjust to the plaintiff to prevent him from proceeding in Courts where the result of his bargain would be to produce success and to force him to proceed in Courts where the result would or might be that the defendants escaped their bargain”
. Indeed, Simon J recognised this in F R Lurssen v Halle: after the sentence cited above, he continued “It may be a less exceptional course … where there has been a choice of law under the Rome Convention”.[29]I conclude that in this case the lex causae outweighs those considerations on which Al-Riyadh rely, and that Navig8 have established that England is the proper place in which to bring the declaration claims (and have done so clearly or distinctly).[30]In reaching this conclusion I do not overlook that Ms Marques stated that the Jordanian proceedings are “relatively advanced”: she said that all the pleadings in the Jordanian proceedings had been served, and two hearings had been held. I was told that since then five or six further hearings have taken place: there is no formal evidence about this, but I assume that it is so. Certainly the proceedings in Jordan were brought some months before the English action, and I accept that they are more advanced, although there is an inconsequential difference between Ms Marques and Mr Parton about whether pleadings in Jordan have been formally closed. According to Mr Parton the Jordanian court will not proceed with the dispute on the merits beyond the submission of defences until any challenge to the jurisdiction has been resolved and that the jurisdictional dispute could go to two levels of appeal. On this basis, he said, Navig8’s Jordanian lawyer considers that it will be two to three years before the jurisdictional dispute is resolved, and another three to four years before the claim is determined on the merits if the Jordanian court holds that it has jurisdiction. I do not give much weight to these predictions: the jurisdictional dispute apparently arises from Navig8’s attempt to re-run the argument that the (English law) bills of lading contracts included by incorporation arbitration agreements, which was rejected by Hamblen J. My conclusion about the proper and appropriate forum does not depend on Mr Parton’s evidence about this.[31]This is not the end of the matter. Mr Pearce also submitted that Nagiv8 should not be permitted to serve out of the jurisdiction the claims for negative declarations because they would serve no useful purpose. He cited Citigroup Global Markets Ltd v Amatra Leveraged Feeder Holding Ltd, [2012] EWHC 1331 (Comm), in which I referred, at para 38, to authorities that (in the words of Mustill LJ in Insurance Corp of Ireland v Strombus International Insurance Co, [1985] 2 Ll L R 138, 144) “the Court should be careful not to bring a foreigner here, unless it can be shown that a solid practical benefit would ensue”. I think that this still represents the law, notwithstanding that, as Dicey, Morris and Collins, The Conflict of Laws (cit sup) put it at para 12-048, “[a previous] attitude of outright hostility has now been replaced by one of neutral caution”, and notwithstanding that the courts are somewhat more willing than previously to grant negative declarations: see Zamir and Woolf, The Declaratory Judgment (cit sup) at paras 3-160 and 4-167. The point is not, I think, simply that a claimant must show a good arguable case that declaratory relief would not be pointless and should be granted, but the court will only exercise its discretion to allow service out of the jurisdiction of a claim for a negative declaration if satisfied “that a solid practical benefit will ensue”.[32]Mr. Parton gave three reasons that Navig8 would benefit from the declarations sought: i) That “once the English court had made such a determination, any party acting properly would not seek to re-litigate in Jordan”; ii) That the ruling might be recognised by the Jordanian court as giving rise to estoppel per rem judicatam or an issue estoppel; and iii) That it would assist Navig8 to resist enforcement of any Jordanian judgment against them. Mr Collett added two further reasons: that, having obtained declaratory relief, Navig8 could apply for an anti-suit injunction to reinforce it; and that, if Al-Riyadh are successful in Jordan against Navig8, a declaration could found a claim for damages to vindicate breach of their rights under the 1999 Act.[33]I have said enough to explain why I am not persuaded of Mr Collett’s second reason. Nor do I accept that declaratory relief would be justified (or arguably justified) by any perceived pressure that a declaration might bring to bear on Al-Riyadh to abandon the proceedings in Jordan (whether or not they submit to this jurisdiction). After all, Al-Riyadh have never made a claim against Navig8 under English law or maintained that Navig8 would be held liable to them if English rules of private international law are applied: the declarations sought by Navig8 in this court do not respond to the claim that they have made. Any declaration would be based upon the fact that English private international law regards English as the law governing the bills of lading contracts, and there is no reason to think that Al-Riyadh would consider that English private international law should command more authority than Jordanian private international law. Mr Collett accepted that the Jordanian court would not regard itself as bound by an estoppel arising from proceedings (again, whether or not Al-Riyadh submit to the jurisdiction). This concession was in accordance with the evidence in Ms Marques’ witness statement that, in the view of Al-Riyadh’s Jordanian lawyer, “a negative declaration of the kind sought by Navig8 will not be recognised and enforced in Jordan …”.[34]I was not immediately attracted to Mr Parton’s third argument, that declaratory relief might help Navig8 to resist enforcement of a judgment of the Jordanian court in a third country (such as Singapore), but on reflection I accept it. My first concern was that it might be inimical to considerations of comity for this court to exercise its discretion to make declarations for such a purpose, still more to grant permission for service in another country of claims made to frustrate the judgment of a court of that country. Often that would be a sufficient reason to refuse permission. As Dicey, Morris and Collins, The Conflict of Laws (cit sup) say at para 12-50 (about permission to serve out of the jurisdiction and applications for proceedings to be stayed on the grounds of forum non conveniens), “If … the court finds that such a declaration would be ignored in foreign legal proceedings between the parties and would therefore serve only to increase the risk of conflicting judgments, … or there is no sensible point in making the declaration, the claimant may be regarded as abusing the process of the court. The court is therefore likely to exercise its discretion to strike out the application or refuse to make the order, or to stay the proceedings, or to refuse to give permission to serve process out of the jurisdiction, as the case may be.”[35]These are important considerations, but what matters here, I think, is that (if Al-Riyadh’s claim against Navig8 has any validity) not only is English the governing law of the putative bills of lading contracts but it was chosen by the parties to them (by implication rather than explicit words, but that cannot be a significant distinction). This brings into play “the fundamental principle of the English rule of conflict of laws that intention is the general test of what law is to apply”, per Lord Wright in Vita Food Products Inc v Unus Shipping Co, [1939] AC 277, 299, and permits what would, in all probability, otherwise unacceptably defy comity. As I understand his judgment, this was the reasoning of Thomas J in Akai Pty Ltd v People’s Insurance Co Ltd, [1998] 1 Ll L R 90, in which a Singaporean insurance company was concerned about the enforcement of an Australian judgment in Singapore and claimed negative declaratory relief in this country. Thomas J said this (at p.106): “Nor in my judgment is it a factor against [the insurance company] that they will seek to use in Singapore any declaration they obtain from this Court. They will be doing no more than using a judgment of the Court that the parties agreed should decide the dispute (applying the proper law upon which the parties agreed) to resist enforcement of a judgment given by a Court that the parties did not agree should decide the dispute and which will not be applying the agreed proper law. Although there is some dispute in the evidence before me as to Singapore law, I consider that such a declaration may well be useful in Singapore and real practical benefits will flow if it is granted. Admittedly in that case there was a contractual choice of English jurisdiction, and so the case for the English court to assume jurisdiction was the stronger. But it does show that considerations of comity do not necessarily answer the argument that the court might properly exercise its discretion to make a declaration in order to assist a party to resist the enforcement of a foreign judgment.[36]My second concern about this argument is the quality of the evidence that declaratory relief might assist Navig8 to resist enforcement. Mr Parton simply stated that a ruling on “the question whether Navig8 is party to the Bill of Lading contracts at all” would be “of assistance to Navig8 in resisting enforcement outside Jordan”, and he observed that Al-Riyadh have no security for a judgment against Navig8 in Jordan. This evidence is, to say the least, vague and I have had to consider whether it is so unsatisfactory that I should disregard it. With some hesitation, given that Navig8 are incorporated in another common law jurisdiction, I infer that Mr Parton is correct, and that this argument does identify a real benefit potentially resulting from a declaration such as Navig8 seek.[37]Mr Collett’s other submission was that Navig 8 should be given permission to serve the declaration claims because, if successful, they could then seek an ancillary anti-suit injunction if they show a sufficient risk that Al-Riyadh might ignore the declarations. He referred to Gee on Commercial Injunctions (5th Ed, 2004) para 14-031, who says that:
“Furthermore if the English court has jurisdiction over the merits against a party and this is invoked by the applicant then this in itself should suffice to make that party amenable to the English jurisdiction for the purpose of granting an anti-suit injunction in an alternative forum case. The injunction is granted ancillary to the exercise of jurisdiction over the merits and is not dependent on there being some formal act of submission to the jurisdiction by the respondent. This is the position for Mareva relief and it should also apply to injunction in alternative forum cases.”
[38]Gee does not refer specifically to the court making an injunction that is ancillary to a declaration. If an injunction is to be sought because it is feared that defendants might disregard a declaratory judgment, the usual practice, I think, is to include the injunction claim in the claim form (by amendment if necessary) and to support it in the particulars of claim: this is contemplated by Zamir & Woolf, The Declaratory Judgment (cit sup) at para 4-235. However, there is authority that the court can make an anti-suit injunction ancillary to support a declaration: see Trafigura Beheer BV v Kokomin Bank Co, [2006] EWHC 1921 (Comm) and Standard Bank Plc v Agrinvest International Inc., [2007] EWHC 2595 (Comm) para 30. What concerned me more is whether, if there is no proper basis for permitting service of a claim for an injunction out of the jurisdiction, Navig8 should be allowed to circumvent this difficulty by serving a claim for declaratory relief out of the jurisdiction with a view to applying later for what Field J called in the Trafigura case a “post-trial anti-suit injunction”. Nevertheless, I have decided that it is sufficiently likely that Navig8 might properly be granted an injunction by way of ancillary relief to permit service in Jordan of their claims for declarations: again, the important point is, to my mind, that the parties to the putative contracts between Al-Riyadh and Navig8 chose (and so evinced an intention) that English law should govern them, and Navig8 have a sufficient case that this choice cannot be vindicated without a declaration and potentially an ancillary anti-suit order, and so cannot be vindicated without permission to serve their claims for declaratory relief on Al-Riyadh in Jordan: see the Akai Pty case (cit sup) at p.106.[39]I conclude that Navig8 have a sufficient case to justify permission to serve out of the jurisdiction claims for declaratory relief. It does not follow that Al-Riyadh’s application to set aside the permission given by Hamblen J is to be dismissed: the ex parte application and the evidence in support of it was really confined to the claim for an injunction; and, moreover, the particulars of claim include prayers for declaratory relief for which permission was not sought or granted. Mr Pearce submitted that therefore the court should not extend its jurisdiction over Al-Riyadh: he contended that Navig8 should not have a further opportunity to apply on a different basis for permission to serve proceedings out of the jurisdiction, and that it is now an abuse of the court’s process to seek it. I do not accept that: despite the history it seems to be that justice requires that Navig8 should have the permission necessary to pursue the declaration claims. I shall invite submissions as to the appropriate orders to give effect to these conclusions.

order

see Briggs and Rees, Civil Jurisdiction and Judgments (5th Ed, 2009) p.490. Mr Collett observed that the first means that Navig8 must have “a much better argument than the foreign defendant”. (I adopt the formulation of the so-called Canada Trust gloss of Lloyd LJ in VTB Capital plc v Nutritek International Corp, [2012] EWCA Civ 808 at para 99, which was not questioned in the Supreme Court and indeed was endorsed in Lord Clarke’s dissenting judgment at [2013] UKSC 5 para 164.) The second requirement has been likened to the test for summary determination of a claim under CPR 24.2: Carvill America Inc v Camperdown UK Ltd, [2005] EWCA Civ 645 at para 24 per Clarke LJ. As for the third, it must be shown clearly or distinctly that England and Wales is the appropriate forum for the resolution of the claims: VTB Capital plc v Nutritek International Corp, (cit sup) paras 5 and 71 per Lord Mance. The fourth is perhaps particularly important where the claim is for a negative declaration.

Cited in 8 later judgments