In Caresse Navigation Ltd v Office National d’Electricite (The Channel Ranger)  EWHC 3081 (Comm), the court considered whether a reference in a bill of lading to the incorporation of a charterparty “English law and arbitration” clause should be read as referring to a clause in the relevant charterparty which conferred jurisdiction on the English court.
The Claimant Owners were contractual carriers under a bill of lading on the Congenbill 1994 form. The bill stated that it incorporated the “law and arbitration” clause in the identified charterparty. That charterparty was on the AmWelsh form and provided for exclusive English law and court jurisdiction, with no reference to arbitration.
Owners brought a claim against the Defendant Cargo Owners and Insurers for a declaration of non-liability in respect of cargo damage.
The First Defendant, the cargo owner, challenged the English court’s jurisdiction.
The application challenging the court’s jurisdiction was refused.
Whether the bill of lading contained a term providing for English court jurisdiction was a question of law for the court to decide. At the very least there was a good arguable case that general words of incorporation were sufficient to incorporate a proper law clause.
The express references to the governing law of the charterparty amounted to an “irrefutable case” that the parties to the bill of lading intended it to be governed by the same law as the charterparty. The use of the words “and arbitration” in the bill of lading did nothing to change that.
Further, the only clause in the charterparty which the parties could have intended the words “law and arbitration clause” to refer to was the law and jurisdiction clause. This was a more natural construction, rather than reading the wording in the bill of lading as referring to the charterparty “law and arbitration clause, if any”.
This conclusion provided clarity and certainty, even though the bill of lading might be taken up by a consignee who was not aware of the charterparty terms. The key consideration when determining whether the parties had chosen a governing law clause was the choice made by the original parties to the bill of lading contract, i.e. the owner and the shipper, not the consignee.
This case gives some valuable insight into the approach taken by the courts when considering the incorporation of charterparty clauses into bill of lading contracts, particularly in respect of jurisdiction clauses. These are very important provisions, as they will govern the forum in which disputes under the bill will be dealt with. The identity of the forum may in turn have a serious impact on a party’s chances of success.
The courts will invariably focus on the requirement for clarity and certainty in commercial dealings, and will consider the intention of the original parties to the bill of lading contract. They will not imply words into a jurisdiction clause which do not need to be implied.
This highlights the importance of carefully considering the words of any given contractual clause, particularly one which relates to an issue as important as jurisdiction, to ensure that they accurately reflect the parties’ intentions.