Incorporation Of Charterparty Clause Into Bill Of Lading: Arbitration Or Court Jurisdiction?

Caresse Navigation Ltd v. Office National de L'Electricite and others (Channel Ranger) [2013] EWHC 3081 (Comm)

In this case, the bill of lading incorporated the "law and arbitration clause" (our emphasis) of a charterparty identified in the bill of lading. The dispute resolution clause in that charterparty, however, provided for English law and court jurisdiction, rather than arbitration. The Court held that although a mistake had been made in the words of incorporation used in the bill of lading, this mistake could be rectified to give effect to the parties' intentions. The Court's view was that the parties had intended for the words "law and arbitration" in the bill of lading to incorporate the law and court jurisdiction clause from the charterparty, despite the reference to "arbitration".

The background facts

The Claimants (Owners of the vessel) sought a declaration of non-liability from the English Commercial Court regarding salt-water damage to the cargo at the discharge port in Morocco. The Defendants (cargo receivers and their insurers) challenged the English Court's jurisdiction under the English Civil Procedure Rules, Part 11. The insurers also commenced proceedings in the Moroccan Court against the Owners in relation to the cargo damage. The Owners applied for an anti-suit injunction from the English Court to restrain pursuit of the Moroccan proceedings on the ground that this was a breach of the exclusive jurisdiction clause in the charterparty which the Owners argued was incorporated into the bill of lading.

The Owners chartered the vessel to U-Sea Bulk A/S (U-Sea) for a one time charter trip with a cargo of coal in bulk. In turn, U-Sea had concluded a voyage charterparty with Glencore International AG. The voyage charterparty contained the following clause:

"This Charter Party shall be governed by English law, and any dispute arising out of or in connection with this Charter shall be submitted to the exclusive jurisdiction of the High Court of Justice of England and Wales."

The vessel loaded the cargo at Rotterdam and the local agents signed a bill of lading on behalf of the master. The bill of lading was negotiable, naming Glencore as the shipper but consigned to the order of the first defendant.

The bill of lading was concluded on the Congenbill 1994 standard form. The front of the form included the following typed clause: "Freight payable as per Charter Party. All terms, conditions, liberties and exemptions including the law...