Caresse Navigation Ltd v Office National De L'electricite & Ors

Specific incorporation of a charterparty’s “law and arbitration clause” may incorporate an English court jurisdiction clause where the charterparty contains no arbitration clause and the intended clause is objectively identifiable. The reference may be construed in light of the commercial background, including the need to give the incorporation wording substantive effect.

General incorporation is sufficient to incorporate a charterparty governing-law clause. Where England is the chosen law and the alternative forum would apply a materially different legal regime, that choice may be decisive in determining the appropriate forum. A negative declaration must also confer a solid practical benefit.

The claimant shipowner sought a declaration of non-liability concerning cargo damage and challenged the jurisdiction of the Moroccan insurers and receiver. The bill of lading incorporated the terms of a voyage charterparty, including its “law and arbitration clause”. The charterparty provided for English law and exclusive English court jurisdiction, rather than arbitration.

The defendants challenged service out of the jurisdiction under CPR 11. The principal issues were whether the bill of lading was governed by English law, whether it contained an exclusive English jurisdiction clause, whether England was the appropriate forum, and whether the claim had a real prospect of success and a practical benefit.

1. Jurisdictional gateways. The claimant satisfied the requirements for service out of the jurisdiction: there was a good arguable case under the relevant gateways, a serious issue to be tried with a real prospect of success, and England was clearly the appropriate forum ([2013] EWHC 3081 (Comm), paras 23–26).
2. Governing law. Under article 3(1) of the Rome I Regulation, general words incorporating charterparty terms can incorporate a proper-law clause. The bill of lading contained express references to the charterparty’s governing law. Those references made it an extremely strong case that the bill was subject to an express choice of English law (paras 30–37).
3. Jurisdiction clause. The words “law and arbitration clause” were construed objectively. Since the charterparty contained no arbitration clause but did contain an English law and jurisdiction clause, that clause was the only provision to which the incorporation wording could naturally refer. Reading the words as referring to an arbitration clause “if any” would deprive them of content. The bill therefore contained an exclusive English jurisdiction clause (paras 38–54).
4. Fixture recap and incorporated terms. Where a charterparty is concluded by fixture recap incorporating an earlier charterparty’s terms, the parties ordinarily intend the earlier charterparty’s dispute-resolution clause to apply, even if no formal charterparty is later executed (paras 51–54).
5. Appropriate forum. Even if the jurisdiction clause did not apply, England was clearly the appropriate forum. The express choice of English law carried substantial, ultimately decisive, weight because proceedings in Morocco would apply Moroccan law and the Hamburg Rules, creating a real risk that the owners would lose the benefit of their bargain. Convenience factors pointing to Morocco did not outweigh that consideration (paras 57–65).
6. Practical benefit and disclosure. The negative declaration served a solid practical purpose, including assisting resistance to enforcement and potentially supporting release of security. There had been no material failure of full and frank disclosure (paras 66–68).
7. The jurisdiction challenge was dismissed. The third defendant was removed from the proceedings’ heading. The anti-suit injunction application was deferred pending hand-down (paras 69–70).