European Court of Justice considers enforceability of jurisdiction clause against third party bill of lading holder
Maersk AS -v- Allianz Seguros y Reaseguros SA, C-345/22 and C-347/22
Mapfre Espana Compania de Seguros y Reaseguros SA -v- MACS Maritime Carrier Shipping GmbH & Co, C-346/22
The Court of Justice of the European Union (CJEU) has made a preliminary ruling in response to three requests that raised the same issue: the enforceability of an exclusive English jurisdiction clause in a bill of lading as against a third-party holder, in circumstances in which that bill of lading holder has commenced proceedings in a non-contractual member state forum and the domestic law of that forum does not recognise the validity of the jurisdiction clause against the consignee.
Brussels I Regulation
The claims arose at a time when the Brussels I Regulation (recast Brussels Regulation) still applied in the UK.
The recast Regulation deals with jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
Article 23 sets out the requirements for a valid agreement conferring jurisdiction, namely that:
- the agreement is in writing or evidenced in writing;
- it is in a form that accords with the parties’ established practices; or
- it is in a form that accords with trade custom or usage.
Article 25 governs jurisdiction clauses in agreements and provides at subsection (1) that in addition to satisfying the requirements of Article 23, a valid contractual jurisdiction clause must also not be “null and void as to its substantive validity” under the law of the courts to which it gives jurisdiction. Therefore, it is necessary to consider both EU law and also domestic law to decide whether the jurisdiction clause is effective.
Case law
Past authority from the CJEU confirms that the validity of a jurisdiction clause in a bill of lading should be assessed by reference to the relationship between the shipper and the carrier (being the original parties to the contract of carriage).
If the jurisdiction clause is valid as between the original parties, it will also be effective as between the carrier and the third-party bill of lading holder if that bill of lading holder succeeded to the shipper’s rights and obligations under the applicable national law when it acquired the bill of lading.
As to which national law is applicable, that is for the national court to decide, applying its own private international law rules.
If, however, the third-party bill of lading holder is found not to have succeeded to the shipper’s rights and obligations under the relevant national law, then the national court must decide whether the holder agreed to the jurisdiction clause according to the requirements set out in Article 23.
While these authorities related to the Brussels Convention and the original Brussels I Regulation, they remain applicable to the recast Regulation.
The background facts
As the three requests raised similar issues, we summarise the facts of just one.
In respect of one bill of lading, the carrier was a Peruvian subsidiary of Maersk and the shipper was Aquafrost Peru. The reverse side of that bill of lading contained an exclusive English court jurisdiction clause but permitted the carrier (not the shipper) to bring proceedings in another jurisdiction. Oversea Atlantic Fish SL acquired the goods in question and thereby became a third-party holder of the bill of lading.
The cargo arrived at the discharge port in a damaged condition and Oversea’s subrogated insurers, Allianz, commenced Spanish Court proceedings against Maersk as carrier. Maersk sought to challenge the Spanish Court’s jurisdiction on the basis of the exclusive English jurisdiction clause in the bill of lading.
Spanish law
In general terms, under Spanish shipping law, the rights of the shipper under the bill of lading are duly transferred to the third-party consignee but with the exception of jurisdiction and arbitration agreements. These require the holder’s consent and if such a clause has not been individually and separately negotiated, it will be deemed null and void under Spanish law. This, however, is stated to be without prejudice to the provisions of the international agreements applicable in Spain and to the rules of EU law.
The Spanish Court dismissed the jurisdictional challenge in this case. Maersk appealed on the basis that Article 25(1) applied and that Spanish shipping law was contrary to EU law.
The Spanish Appeal Court referred the issue to the CJEU and stayed its proceedings in the meantime.
The CJEU decision
The Court noted that Article 25(1) does not specify what the effects of a jurisdiction clause are vis-à-vis a third party or which law is the applicable national law in that regard. However, the CJEU accepted the applicable principles set out in past authorities, as summarised above.
It concluded that if the Spanish Court were to find that Oversea, as third-party holder of the bill of lading, became subrogated to all of the rights and obligations of Aquafrost as shipper and original party to the contract of carriage, the Spanish Court would have to conclude that the jurisdiction clause is enforceable against Oversea.
However, the jurisdiction clause is not relevant to the question of whether Oversea is subrogated to all of the rights and obligations of Aquafrost as shipper, since that subrogation is governed by national substantive law as established by applying Spanish private international law rules.
In other words, the enforceability of the jurisdiction clause against the third-party bill of lading holder is not to be automatically decided according to English law as the law of the jurisdiction provided for in the jurisdiction clause.
The CJEU noted that the Spanish Court appeared to have taken the view that Spanish law was the applicable national law in this instance. However, the provisions of Spanish shipping law relied on in this case had the effect of circumventing, and were therefore contrary to and precluded by, Article 25(1).
The Spanish Court would, therefore, have to consider whether the relevant provisions could apply to situations that fell outside the scope of Article 25(1). Otherwise, those provisions were contrary to EU law.
Comment
The Spanish Court will now have to reconsider its position, and potentially its domestic shipping law, in light of the CJEU’s preliminary ruling.
From an English law and jurisdiction perspective, an anti-suit injunction from the English Court may be available in similar circumstances going forward. Such injunctive relief was prohibited where directed at proceedings in the courts of an EU member state prior to the UK’s withdrawal from the EU.
However, whether an anti-suit injunction is recognised by the court of the non-contractual forum is never a certainty and the parties to a dispute may simply find themselves involved in parallel and duplicative proceedings in more than one forum.
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