Siboti K/S v BP France SA

General words incorporating a charterparty into a bill of lading do not ordinarily incorporate ancillary arbitration or jurisdiction clauses. Such a clause requires an explicit reference in the bill of lading or charterparty, construed in its contractual and commercial context. A jurisdiction clause is ancillary in the same way as an arbitration clause because incorporation may displace the otherwise applicable jurisdiction. Clauses in a charterparty prescribing the intended form or contents of bills of lading do not themselves incorporate the relevant clause or establish the bill parties’ objective intention. Under Community law, incorporation requires a consensus clearly and precisely demonstrated. The domicile rule in art. 2 of the Council Regulation (EC) 44/2001 was therefore not displaced.

The claimant, owner of the vessel SIBOTI, claimed freight and demurrage from the defendant, the ultimate purchaser and subsequent holder of a bill of lading. The bill of lading incorporated generally the terms of an unidentified charterparty. That charterparty contained an exclusive English jurisdiction clause and a further provision stating that bills of lading issued under it should incorporate the clause.

The defendant applied under CPR Part 11 for a declaration that the court lacked jurisdiction and for the claim form and service to be set aside. The central issue was whether the exclusive jurisdiction clause had been incorporated into the bill of lading under English law or Community law. A further issue concerned an alleged concession made in French proceedings.

1. Application succeeded. The exclusive English jurisdiction clause was not incorporated into the bill of lading. The defendant was accordingly entitled to rely on the basic jurisdiction rule in art. 2 of the Council Regulation (EC) 44/2001, subject to the form of order and costs.
2. Under English law, the starting point was the bill of lading contract. General words such as “all the terms whatsoever” remained general words of incorporation. They were insufficient to incorporate an ancillary charterparty arbitration or jurisdiction clause. Jurisdiction clauses were to be treated in the same way as arbitration clauses because both could displace the jurisdiction otherwise seized of the dispute.
3. Where the inquiry proceeded beyond the bill of lading, an ancillary or collateral charterparty clause required an explicit reference in the bill of lading or charterparty. A clause prescribing the form or contents of bills of lading was not itself incorporated, and the charterparty parties’ intention could not be substituted for the objective construction of the bill of lading contract. The fact that the jurisdiction clause formed part of the shipper’s standard clauses did not alter that conclusion.
4. The authorities required clarity and precision because bills of lading were negotiable commercial instruments and incorporation could have significant jurisdictional consequences. Those principles were rules or aids to construction, not statutory provisions, and remained subject to the individual contractual context and commercial background.
5. Under Community law, art. 23 required a consensus on jurisdiction which was clearly and precisely demonstrated. Incorporation by reference was permissible, but general words were ordinarily insufficient for an ancillary jurisdiction clause. The commercial background could not cure deficiencies in the language chosen by the parties.
6. The alleged French-proceedings concession did not establish incorporation. It amounted, at most, to accepting that the charterparty was governed by English law and that the lien was to be determined under English law. Even a wider admission would not readily satisfy art. 23 without a properly established election or estoppel.

First-instance decision. The judgment records that the parties reserved their rights to argue before a higher court that some of the English authorities, including The Merak, were wrongly decided.