Brandt v Liverpool implied contract falls outside art. 25 of Brussels Regulation (Recast).

 

In Pan Ocean Co. Ltd v China-Base Group Co. Ltd & Anor [2019] EWHC 982 (Comm) (16 April 2019) Christopher Hancock QC (Sitting as a Judge of the High Court) has held that an implied contract arising out of the conduct of the parties at the port of discharge did not fall within art.25 of the Brussels Regulation (Recast) 2012.

A cif contract was concluded between Gunvor and China-Base, loadport to be any port in Indonesia, Malaysia, or the Philippines with delivery in China.  A bill of lading was issued recording the loading of about 36,360 mt of light cycle oil and gas oil at Zhoushan, China and Taichung, Taiwan. Pan Ocean, the demise charterer of the vessel voyage chartered the vessel to Clearlake shipping a company said to be associated with Gunvor. The charterparty provided for English law and Jurisdiction. Pan Ocean issued bills of lading which accurately reflected the loadports and nature of the cargo and the vessel then loaded further cargo of gasoil in the Philippines. No bills of lading were issued for this cargo but in accordance with Clearlake’s instructions, it is said that an agent of Pan Ocean issued switch bills of lading falsely naming the loadport for the entire cargo as Subic Bay, Philippines and mis-describing the entire cargo as light cycle oil. The Vessel discharged the cargo into bonded shore tanks in Nansha, China. China-Base/Beihai neither presented any bills of lading nor gave any letter of indemnity to Pan Ocean or their agents. The cargo was impounded by the Chinese authorities on grounds of customs irregularities.

The buyers arrested the vessel in Singapore claiming damages for alleged misrepresentations in the cargo documentation. The demise charterers sought an anti-suit injunction in the English High Court to prevent the buyers proceeding with their claim in Singapore and claimed that the English court had exclusive jurisdiction over their claim under art. 25(1) of the Brussels Regulation (Recast) which provides

  1. If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. The agreement conferring jurisdiction shall be either:

(a) in writing or evidenced in writing;

(b) in a form which accords with practices which the parties have established between themselves; or

(c) in international trade or commerce, in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.”

The demise charterers argued that an implied contract had come into existence between themselves and the buyers at the discharge port on the terms of the bill of lading. The Judge addressed this issue on the assumption that there was an implied contract between the parties. He held that although the bill of lading which would constitute the terms of the putative implied contract was in writing, the agreement itself had to be in writing in accordance with Art 25(1)(a) ““The agreement conferring jurisdiction shall be … (a) in writing or evidenced in writing”).” This was not the case where the agreement contended for was an implied contract based on the actions of the parties in taking delivery of the cargo at the port of discharge.

Had it been established that the English court had exclusive jurisdiction, the court, applying the approach laid down in Ecobank v. Tanoh [2016] 1 WLR 2231. would not have granted an interim anti-suit injunction. The application for an injunction had neither been sought promptly, nor before the proceedings were too far advanced. Over 9 months had passed since the warrant of arrest in Singapore was served, with several hearings in Singapore during that period.

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