National Navigation Co v Endesa Generacion Sa

Proceedings seeking declaratory or anti-suit relief to protect contractual arbitration rights fall outside the scope of Council Regulation (EC) No 44/2001 because their subject matter is arbitration. A claim cannot be maintained as a Regulation claim merely because English law governs the underlying contract or because arbitration would be performed in England. A foreign court’s determination of the validity of an arbitration agreement in substantive Regulation proceedings is itself within the Regulation, but need not be recognised in separate arbitration proceedings outside it. A valid arbitration clause was incorporated into the bill of lading, and commencing protective court proceedings did not, without clear and unequivocal conduct accepted by the other party, repudiate or waive the arbitration agreement. An anti-suit injunction restraining proceedings in another Member State was unavailable following The Front Comor and its ECJ ruling.

National Navigation Co, owner of the vessel Wadi Sudr, and Endesa Generacion SA disputed liability after coal was discharged in Spain short of the contractual destination. The bill of lading incorporated the terms of an unidentified charterparty. Endesa commenced proceedings in Spain, while NNC issued English Commercial Court proceedings seeking a declaration of non-liability and later commenced a London arbitration claim seeking disclosure, a declaration that the arbitration clause was incorporated, and an anti-suit injunction.

The Spanish court rejected NNC’s jurisdictional challenge and held that the arbitration clause was not incorporated, and that NNC had waived any arbitration agreement by commencing court proceedings. The issues were whether the English Commercial Court claim fell within the Regulation, whether the Spanish decisions required recognition, what law governed incorporation and waiver, whether the arbitration clause was incorporated, and whether NNC was entitled to declaratory or anti-suit relief.

1. Commercial Court Action. The claim was struck out. Article 23 of the Regulation could not confer jurisdiction because the relevant charters contained arbitration clauses rather than agreements submitting disputes to the English courts. English governing law did not itself confer Regulation jurisdiction. The proposed alternative claim under Article 5(1) also failed.
2. Following the ECJ’s decision in The Front Comor Case C-185/07, proceedings whose subject matter is protection of contractual arbitration rights, including declaratory and anti-suit relief, fall within the arbitration exclusion in Article 1(2)(d). They are outside the Regulation and cannot preserve a purported first-seised status under it. The Commercial Court Action was therefore dismissed, with indemnity costs against NNC.
3. Recognition of the Spanish decisions. The Spanish proceedings concerning the preliminary validity of the arbitration agreement were within the Regulation because they arose in substantive civil proceedings. However, the Spanish decisions were not required to be recognised under Article 33(1) in the separate English Arbitration Action, which itself fell outside the Regulation. Section 32 of the Civil Jurisdiction and Judgments Act 1982 therefore permitted the court to determine incorporation and waiver afresh. The court also held, alternatively, that recognition would be manifestly contrary to United Kingdom public policy if the arbitration agreement was valid under its proper law.
4. Applicable law and incorporation. English law governed incorporation. The bill of lading incorporated the law and arbitration clause of the relevant charterparty. The Voyage Charter was the appropriate charter to identify because it governed the carriage of the coal and was the charterparty to which Carboex was party. Its London arbitration clause was validly incorporated and binding on Endesa. The same conclusion would follow if the Head Charter were relevant.
5. Waiver and repudiation. Commencing the Commercial Court Action did not amount to repudiation. The applicable test was whether clear and unequivocal conduct objectively demonstrated an intention not to be bound by the arbitration agreement. NNC continued to maintain that London arbitration was, or might be, the agreed forum, and Endesa had not established repudiation accepted by it.
6. Relief. The declaration that the Voyage Charter arbitration clause was incorporated into the bill of lading and binding on Endesa was granted. Endesa’s jurisdiction application in the Arbitration Action was dismissed. The anti-suit application was dismissed because the ECJ had held that an anti-suit injunction restraining proceedings in another Member State on the ground of breach of an arbitration agreement was incompatible with the Regulation. Disclosure of the Voyage Charter was ordered because it was within Endesa’s control under CPR 31.08.