After Brexit: one more thing to think about for cargo claimants

Wednesday 21 April 2021

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Lars Rosenberg Overby
IUNO Law Firm, Copenhagen

Brexit took place, as we knew it would, but thankfully not the real hard version that many had feared. Breaking up after so many years implies that that the ‘to do’ list is long.

I speculate that one issue is what to do about the Brussels Regulation (EU No 1215/2012) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) and the Lugano Convention (Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters dated 21 December 2007) to which the EEA states are party to.

Brexit has left the United Kingdom in a situation where the Brussels (recast) Regulation no longer applies. Neither does the Lugano Convention.

As most practicing lawyers are aware – and as the titles indicate – these instruments deal with jurisdiction and enforcement of judgments. Notably, the instruments allow commercial parties to accept jurisdiction agreements subject to some basic requirements. One of these is an agreement concerning a court in a jurisdiction which is a party to the instrument.

I understand that the UK is contemplating becoming a member of the Lugano Convention, and we must hope this succeeds. It would require the member states to give lend their consent, so a delay should be expected. The question is what to do in the interim.

English and Danish law is now in the same boat, in the sense that neither country takes part in the EU framework regarding cooperation on legal affairs. Denmark, however, has entered into a parallel agreement with the EU enabling the Brussels (recast) regulation to apply and has acceded to the Lugano Convention.

Denmark and the UK have both ratified the 2005 Hague Choice of Courts Convention, which covers many of the same issues. For example, it applies to exclusive jurisdiction agreements, which are agreements that confer jurisdiction to one state only. This also means that if one court is seized of a case, then another court must dismiss or stay a case concerning the same dispute, until the court first seized has decided whether to hear the case. Therefore, at least jurisdiction clause-wise, the UK has not been left emptyhanded.

It is important to note, however, that the Choice of Courts Convention does not apply to either: the carriage of passengers and goods (art 1 (2)(f)); or marine pollution, limitation of liability for maritime claims, general average, and emergency towage and salvage (art 1(2)(g)).

It would therefore appear that Danish law is not affected by the Choice of Courts Convention in many maritime law situations.

The above gives rise to multiple issues that will surely keep maritime lawyers busy for some time. One of these is whether the widely used ‘High Court of London’ jurisdiction clause can stand its ground until the UK becomes a Lugano Convention State?

While both the Brussels Regulation (recast) and the Lugano Convention only require that one of the parties is situated in a state that is party to the instrument, it still requires a jurisdiction clause to identify a court in a Convention state. It would seem that the High Court of London no longer qualifies.

Another consideration is that the 2005 Hague Choice of Courts Convention does not apply to the carriage of goods. Consequently, a competing jurisdiction created by mandatory national rules in, say, a dispute concerning a cargo claim could override the jurisdiction clause in the Bill of Lading.

By way of example, under the Danish Merchant Shipping Act section 310, a claim may be commenced in Denmark – on a mandatory basis – against a carrier where:

  • the carrier has its principal place of business in Denmark;
  • the contract of carriage (bill of lading or sea waybill) was made, if the carrier has a branch or agency in Denmark;
  • the goods were received for transport in Denmark, or the place of delivery after transport in Denmark.

The latter point applies even if the goods were not carried by ship prior to or after the ocean carriage, as long as such carriage is covered by a single contract of carriage. For example, a bill of lading nominating a place in Denmark as place of receipt, a port of loading in Germany, a port of discharge in the US and a place of delivery in Canada (or in the opposite direction) would be subject to Danish jurisdiction, even if the leg from (or to) Denmark was performed by road haulage.

The Danish Merchant Shipping Act will also apply as the chosen law on a mandatory basis to many of these claims, namely if:

  • the place where goods were received for transport, or the place of delivery are in a state party to the Hague-Visby Rules (see above about what the place of receipt and delivery means);
  • the contract of carriage (bill of lading or sea waybill) was issued in a state party to the Hague-Visby Rules;
  • the contract of carriage chooses the law of a state party to the Hague-Visby Rules.

Consequently, carriers who use the High Court of London jurisdiction clause in their contracts may find that they are not able to enforce it as intended.

In the context of Denmark, and incidentally also the other Scandinavian countries, the jurisdiction provisions in the Merchant Shipping Acts have so far often been ineffective because they are secondary to international agreements regarding jurisdiction, such as the instruments mentioned above, but that impediment is gone (for now).

In summary, claimants have new options in terms of where they want to pursue their cargo claims against carriers which would historically have been at the High Court of London as their jurisdiction of choice.

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