Key takeaways
Anti-suit injunctions reinforce contractual jurisdiction
The English Court upheld an anti-suit injunction to protect the agreed forum and prevent parallel litigation.
Consignee liability doesn’t require prior notice
Under UK law, consignees are treated as parties from the outset even without receiving full terms.
Website references are sufficient legal notice
The Court confirmed that pointing to standard terms online is enough to bind parties to contract conditions.
The Commercial Court has continued the effect of an anti-suit injunction until trial and also granted an interim anti-anti-suit injunction in circumstances where the consignee under the bills of lading had commenced Nigerian court proceedings in breach of the exclusive English jurisdiction clause incorporated into the contracts of carriage (via the bills of lading).
The decision provides a useful reminder regarding the rights and liabilities of consignees under the Carriage of Goods by Sea Act 1992. It also highlights that a consignee is not required to have specific notice of the terms of the contract of carriage. It is treated as if it had been a party to the contract from the outset.
The background facts
The first claimant, MSC Mediterranean Shipping Company S.A. (MSC), was the contractual carrier under four bills of lading relating to the shipment of containers from China to Nigeria.
The first and second defendants, Interglobal Technologies Ltd and Interglobal Construction Ltd (Interglobal), respectively, were Nigerian companies and the consignees under the bills of lading, and the third defendant, Zhengzhou Sanqgroup Machinery and Equipment Co. Ltd (ZSME), was a Chinese manufacturing company and the shipper under the same bills of lading.
While the contracts of carriage were performed, some MSC containers were returned late by Interglobal. Pursuant to the MSC Terms (set out on the reverse of the bills of lading), container demurrage and detention charges became due to MSC. When Interglobal delayed payment, MSC exercised its express contractual right to withhold delivery of the containers shipped under one of the bills of lading in order to secure payment of the overdue sums.
Interglobal eventually paid the outstanding sums but then commenced Nigerian court proceedings against MSC, alleging breaches of the contracts of carriage and seeking the return of the container demurrage and detention charges and also damages for consequential losses. In order to secure their claims, Interglobal arrested the vessel in Port Harcourt, Nigeria.
MSC sought and obtained an interim anti-suit injunction (ASI) from the English Court on the basis that the bills of lading incorporated an exclusive jurisdiction clause in favour of the English courts and that the Nigerian proceedings were vexatious and oppressive in circumstances where Interglobal were refusing reasonable alternative security in the form of a P&I Club letter of undertaking (LOU) in the amount of £500,000.
Interglobal failed to comply with the ASI and did not stay or discontinue the Nigerian proceedings. As the P&I Club LOU had been rejected, MSC was ultimately forced to tender a bank guarantee for US$10 million in order to secure the vessel’s release from arrest.
MSC sought to take the interim ASI to trial. Interglobal sought to have it discharged, alleging that they were not bound by the terms of the bills of lading, including the jurisdiction clause, that such jurisdiction clauses were void pursuant to Nigerian law and that MSC had in any event submitted to the jurisdiction of the Nigerian courts.
Interglobal commenced a further set of Nigerian court proceedings, seeking an ASI in respect of the English court proceedings. MSC then sought an interim anti-anti-suit injunction (AASI) in respect of the new Nigerian proceedings. This resulted in the second Nigerian court proceedings being discontinued, but with no undertaking that Interglobal would refrain from recommencing such proceedings in the future.
At the return date for the ASI, the English Court considered whether to maintain the ASI or whether to discharge it.
The terms of the bills of lading
The front of the bills of lading stated as follows:
"In accepting this bill of lading the Merchant expressly accepts and agrees to all terms and conditions, whether printed, stamped or otherwise incorporated on this side and on the reverse of this bill of lading and the terms and conditions of the Carrier’s applicable tariff as if they were all signed by the Merchant.”
The MSC Terms on the reverse of the bills of lading provided, amongst other things, as follows:
Clause 1 provided that the Merchant was defined as “the Shipper, Consignee, holder of this Bill of Lading, the receiver of the Goods and any Person owning, entitled to or claiming the possession of the Goods or of this Bill of Lading or anyone acting on behalf of this Person.”
Clause 2 provided, in relevant part, that “[t]he contract evidenced by this Bill of Lading is between the Carrier and the Merchant.”
Clause 10.3 provided that any suit by the Merchant shall be filed exclusively in the High Court of London and English law shall exclusively apply.
The Commercial Court decision
The Court dismissed Interglobal’s argument that the MSC Terms had not been incorporated into the contracts of carriage.
The contracts of carriage had been indisputably concluded between the carrier (MSC) and the shipper (ZSME) on terms evidenced by the bills of lading. Each of the original bills of lading, as issued, incorporated the MSC Terms which had been printed on the reverse side of the bills as well as on MSC’s website. Furthermore, such concluded contracts of carriage between the carrier and shipper incorporated both the exclusive English jurisdiction clause and the English law governing clause.
These were straight, non-negotiable bills of lading and were to be treated as sea waybills under s.1.1(b) of the Carriage of Goods by Sea Act 1992 (COGSA 1992). Furthermore, the effect of ss. 2 and 3 of COGSA 1992, which deal with rights and liabilities under shipping documents, was that a new contract arises between the carrier and consignee on the terms of both the front and reverse of the bills of lading, including the jurisdiction clause.
Interglobal became subject to the same rights of suit and liabilities as if they had been a party to the original contract of carriage because:
Interglobal were the person to whom “delivery of the goods to which a sea waybill relates is to be made by the carrier in accordance with that contract” for the purposes of s.2(1)(b) of COGSA 1992. Interglobal were also the named consignee on the bills of lading.
Interglobal were the person who took “delivery from the carrier of any of the goods to which the document relates” for the purposes of s.3(1)(a) of COGSA 1992.
Interglobal bound themselves to the terms of the bills of lading for the purposes of s.3(1)(b) of COGSA 1992 by making claims under the bills of lading in Nigeria.
The Court dismissed Interglobal’s arguments that they were not bound by the MSC Terms because they had allegedly not received copies of the reverse of the bills. The Court doubted that this was correct but, in any event, the relevant test was not whether Interglobal had in fact received and read the Terms, but whether they were on reasonable notice as to MSC’s standard terms and conditions.
The Court highlighted the following:
The front of the bills of lading clearly referred to the MSC Terms (printed on the reverse).
The front of the bills expressly referred to the MSC Terms and Conditions on the MSC website and, on the authorities, directing a party to standard terms on a website amounted to sufficient notice.
Under COGSA 1992, there is no requirement that the consignee has specific notice of the terms of the original contract. It is treated as if it had been a party to the contract from the outset.
The parties had contracted on the same terms on three separate occasions with no questions as to what terms governed their relationship.
The Court concluded that Interglobal were bound by the exclusive English jurisdiction clause in the MSC Terms. Any argument that such jurisdiction clauses were allegedly void under the Nigerian Admiralty Jurisdiction Act 1991 was irrelevant as the bills of lading were exclusively governed by English law and the exclusive English jurisdiction clause was valid under English law. Forum non conveniens arguments were also irrelevant in circumstances where there was an exclusive jurisdiction clause, and the Court had been asked to grant an ASI to enforce the contractual bargain between the parties.
The Court also did not think that MSC had submitted to the jurisdiction of the Nigerian courts. It had made only a conditional appearance before the Nigerian courts by which it had effectively preserved its objection to the Nigerian courts’ substantive jurisdiction. Finally, the Court rejected the argument that MSC had failed to make full and frank disclosure when it made its ex parte application for the ASI.
The Court ordered that the ASI be continued until trial and also granted an interim AASI.
Comment
This case is a clear reminder that the English Court will not hesitate to order anti-suit relief where a contracting party is clearly in breach of an exclusive jurisdiction clause.
Of course, obtaining an ASI will only have any value at all if such ASI is respected by the relevant jurisdiction in which the party obtaining it seeks to enforce it. There are some instances where even shipping nations refuse to recognise ASIs obtained by the English courts, which makes it essential for proper advice to be obtained in advance in order to avoid throwing good money after bad.