Bill Of Lading 'Law And Arbitration' Clause Incorporates Charterparty Court Jurisdiction Provision

Caresse Navigation Ltd v. Zurich Assurances MAROC and others (Channel Ranger)

[2014] EWCA Civ 1366

The Court of Appeal in this case has considered whether reference in a bill of lading to the incorporation of a "law and arbitration clause" was effective to incorporate a law and court jurisdiction (not arbitration) clause in a charterparty. This dispute concerns a claim for cargo damage of around US$ 1 million under a bill of lading on the Congenbill 1994 standard form. The appeal was against a Commercial Court decision upholding an anti-suit injunction made on the basis that the bill of lading did incorporate an English law and court jurisdiction clause referred to in the charterparty. The Court of Appeal dismissed the appeal and upheld the Commercial Court's decision.

The Commercial Court decision was reported in the Ince January 2014 Shipping E-Brief.

The background facts

The Respondent Owners commenced proceedings in the English Commercial Court seeking a declaration of non-liability regarding salt-water damage to the cargo at the discharge port in Morocco. The cargo insurers (appellants in the current proceedings) challenged the English Court's jurisdiction and commenced proceedings in Morocco against the Owners in relation to the cargo damage.

The Owners were granted an anti-suit injunction by the Commercial Court restraining pursuit of the Moroccan proceedings by the cargo insurers.

The Congenbill 1994 bill of lading contained the following typed clause: "All terms, conditions, liberties and exemptions including the law and arbitration clause, are herewith incorporated." The terms of the governing voyage charterparty, however, provided that it would be governed by the exclusive jurisdiction of the English courts and did not provide for arbitration.

The Commercial Court decision

The Commercial Court held that the provision in the bill of lading expressly seeking to incorporate an arbitration clause from the charterparty was sufficient to incorporate the English High Court jurisdiction clause in that charterparty. The Court took the view that this issue was one of construction of the terms of the contract, rather than one of incorporation, and that the real question was what the parties reasonably understood by the words "law and arbitration clause". The Court held that the only clause that the parties could have intended to refer to by the words "law and arbitration clause" was the court jurisdiction clause in the relevant...