Ruby Tree Shipping SA v General Motors DO Brasil LTDA & Anor

A contractual law and jurisdiction clause may be enforced by a vessel owner where the bill of lading gives the owner, as subcontractor, the benefit of the carrier’s liability and jurisdiction provisions. Incorporation of a foreign convention or national law for a particular aspect of carriage does not displace the overarching governing law or determine the forum. An anti-suit injunction is appropriate where foreign proceedings would breach an exclusive English jurisdiction clause and there is no underlying cause of action against the applicant. Declaratory relief may also be granted where the defendants maintain an asserted claim but deliberately decline to engage with the English proceedings.

The claimant, the owner of the vessel Thorco, sought judgment in default against the defendants concerning machinery allegedly damaged during carriage under a bill of lading. The claimant relied on provisions stating that claims against the carrier had to be brought exclusively in England and that subcontractors, including the vessel owner, benefited from the relevant protections and jurisdiction clause.

The defendants had threatened or contemplated proceedings in Brazil, but did not acknowledge service, challenge jurisdiction or participate in the English proceedings. The application sought declarations concerning the governing law, the absence of liability, the time bar and indemnity, together with an anti-suit injunction.

1. Default judgment and declarations. The defendants had been properly served out of the jurisdiction and had deliberately failed to engage with the proceedings. They had filed no acknowledgement of service and had made no jurisdictional challenge. The claimant was therefore entitled to judgment in default. Declaratory relief was appropriate because there was a real dispute: the defendants asserted a claim against the claimant while refusing to participate in the proceedings. The three declarations sought by the claimant were granted.
2. Construction of the bill of lading. The bill of lading defined the merchant to include the consignee and the subcontractor to include the vessel owner. Clauses 7.3 and 7.4 extended protections, defences and jurisdictional rights to agents and subcontractors. Clause 14 required claims against the carrier relating to the goods to be determined exclusively by the English courts. Clause 15 gave the subcontractors the benefit of those provisions, including the right to invoke the jurisdiction clause in support of an anti-suit application.
3. Foreign law provision. Clause 8.1.2 did not displace English governing law. A foreign convention or national law could apply to a particular element of the carriage without replacing the underlying governing law. In any event, the Brazilian provision relied upon could not determine the jurisdiction issue.
4. Anti-suit injunction. Although proceedings had not formally been issued in Brazil, the defendants had taken steps there and refused to undertake not to commence proceedings. Their position was inconsistent and gave no confidence that proceedings would not be instituted. Any Brazilian proceedings would breach the exclusive English jurisdiction clause, and there was no underlying cause of action against the claimant. There was therefore an incontestable case for an anti-suit injunction, which was granted.