Welex AG v Rosa Maritime Ltd

At the permission stage, an appeal should proceed where it has a real prospect of success and raises important issues of principle. Very substantial costs incurred in jurisdictional disputes are regrettable, but they do not by themselves justify refusal where the merits are sufficiently arguable. Unresolved questions about incorporating an undated charterparty or fixture recap into a bill of lading, the existence and practical effect of an arbitration clause, and the availability of arrest security in a proposed arbitration may warrant appellate examination. Permission was granted without finally deciding those substantive issues.

Welex AG, receiver of steel cargo damaged on a voyage, arrested the vessel in Portugal and commenced substantive proceedings in Poland. Rosa Maritime commenced London arbitration and obtained an anti-suit injunction from David Steel J. In judgments dated 25 April and 14 October 2002, the High Court addressed incorporation of charterparty terms and the arbitration clause into the bill of lading, the availability of arrest security in the arbitration, and the injunction discretion. The Court of Appeal considered whether those issues were sufficiently arguable for permission, despite the substantial costs already incurred.

The Court of Appeal unanimously granted permission to appeal. Lord Justice Rix gave the first judgment, and the Master of the Rolls agreed. The order concerned permission only; it did not finally determine incorporation, jurisdiction, or the merits of the anti-suit injunction.

1. Permission test. The application raised issues with a real prospect of success and important issues of principle. That was sufficient to justify permission.
2. Incorporation. The High Court had relied on The San Nicholas [1976] 1 Lloyd's Rep 8 and The SLS Everest [1981] 2 Lloyd's Rep 389 in holding that leaving the charterparty date blank did not prevent extrinsic evidence proving the relevant charterparty. It also held that the fixture recap email could be incorporated whether or not a charterparty had been executed. That approach differed from the view expressed by Judge Diamond QC in The Heidberg [1994] 2 Lloyd's Rep 287, and the conflict was an important point worthy of appellate consideration.
3. Anti-suit injunction. The uncertain availability in the London arbitration of security obtained through the Portuguese arrest was an important consideration, particularly because the new owners would not bring their vessel's security into the arbitration. The uncertainty surrounding the existence and incorporation of the London arbitration clause, Welex's lack of knowledge of it when Polish proceedings began, and the late production of relevant documents could also bear on incorporation and on the court's discretion to grant an injunction. The Angelic Grace [1995] 1 Lloyd's Rep 87 was cited in this context.
4. Costs. Costs exceeding £300,000 and potentially approaching £400,000 to £500,000 were regrettable, but were a two-edged consideration. Having already been incurred, they could add to the value of the dispute if the appeal had a real prospect of success. They should not prevent permission.

Order: Permission to appeal granted.

1. Court of Appeal (Civil Division): Permission to appeal granted. The application followed an earlier refusal of permission on paper by Longmore LJ.
2. High Court, Queen's Bench Division: David Steel J delivered judgments dated 25 April and 14 October 2002. He held that the charterparty terms and fixture recap could be incorporated into the bill of lading and granted an anti-suit injunction restraining the Polish proceedings.