OPINION OF ADVOCATE GENERAL SIR GORDON SLYNN

DELIVERED ON 21 MARCH 1984

My Lords,

NV Goeminne Hout, a Belgian company, is apparently the holder of two bills of lading relating to consignments of timber which it had purchased and which were shipped from Canada. When the timer arrived in Antwerp, on 7 September 1976, it was found that some was missing. The company and its agents sued, apparently, the shipowner in the commercial court in Antwerp. They were met by the objection that the bills of lading contained the provision “4 (e) Any dispute arising under this bill of lading shall be decided by the Hamburg courts”, and that, accordingly, by virtue of Article 17 of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 27 September 1968, the courts of Antwerp had no jurisdiction. The commercial court, and the court of appeal, on 7 October 1981, rejected that objection. When the matter came before the Court of Cassation (Hof van Cassatie) that court stayed proceedings pending a reference to the Court of Justice of the following question :

“Can the bill of lading issued by the carrier to the shipper be considered, having regard to the relevant generally accepted practices, to be an ‘agreement in writing’ or an ‘agreement evidenced in writing’ between the parties within the meaning of Article 17 of the [Convention], and if so, does that also apply in relation to a third party holding the bill of lading?”

Article 17, a derogation from the general rule that a person domiciled in a contracting State shall be sued there and from the special jurisdictions available under Articles 5 and 6 for particular obligations, grants, subject to exceptions, exclusive jurisdiction to the courts of a contracting State, if the parties, one or more of whom is domiciled in a contracting State, have by agreement in writing or by an oral agreement evidenced in writing agreed that those Courts are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship.

In the French text, which I understand to be similar to other language versions the phrase is “par une convention écrite ou par une convention verbale confirmée par écrit”. It does not seem to me that for present purposes a distinction is to be made between “evidenced in writing” and “confirmée par écrit”.

Article 17 has been amended by the Convention of Accession to the Brussels Convention by Denmark, Ireland and the United Kingdom dated 9 October 1978. So far as relevant, the agreement conferring jurisdiction must under the amendment “be either in writing or evidenced in writing or, in international trade or commerce, in a form which accords with practices in that trade or commerce of which the parties are or ought to have been aware”. Since, however, that amendment is not yet in force, it seems to me that, in considering the forms in which the consent to jurisdiction can be proved, it is right not to take any account of it.

The article as it stands thus requires that consent to a choice of jurisdiction clause shall be established, and prescribes the ways in which such consent can be proved. Whether there has been in fact an agreement as to choice of jurisdiction, the ambit and effect of the clause agreed and the resolution of the dispute between the parties is for the national court to decide in accordance with the system of national law applicable. What is capable of constituting “an agreement in writing” or an oral agreement “evidenced in writing”, in other words how the agreement can be proved, is a matter of Community law for this Court in the last resort. If it were otherwise the requirements as to form set out in Article 17 might be interpreted differently in the courts of the various Member States and that degree of uniformity which the Convention seeks to achieve would not be achieved.

It is accordingly, as I see it, not for this Court under the Convention to decide the broad question whether a bill of lading can, let alone in this case does, constitute a contract of carriage or evidence in writing of an oral contract of carriage, or whether, as is contended, it is a mere receipt for goods shipped or a document of title separate from the contract of carriage. That remains a question of national law. The sole question is whether the bill of lading is capable of constituting or providing proof of an agreement as to jurisdiction.

In dealing with this kind of question which arises under the Convention, the Court has already established that the overriding rule is that jurisdiction can only validly be conferred on the courts of a contracting State where a consensus to that effect between the parties is “clearly and precisely demonstrated”. “The purpose of the formal requirements imposed by Article 17 is to ensure that the consensus between the parties is in fact established” (Case 24/76 Estasis Salotti ν RÜWA [1976] ECR 1831 and Case 25/76 Galeries Segoura ν Bonakdarian ib. p. 1851). True consent, the condition precedent, may thus be satisfied where the clause conferring jurisdiction appears in the body of the contract or of the writing said to be evidence of the contract, or is clearly referred to in it or is to be found in conditions clearly and expressly incorporated in the agreement. There must be a sufficient and express notice that conditions exist which include a choice of jurisdiction clause which the other party can reasonably ascertain and identify. Where an oral agreement has been made, expressly incorporating conditions which include a choice of jurisdiction clause, the written evidence must either expressly, or in my view impliedly, refer to those conditions. These basic rules may, however, not have to be satisfied where there is a continuous trading relationship between the parties in which the choice of jurisdiction clause has been included and where it would be mala fide for one side to seek to rely on the non-compliance with the formal rules laid down by Article 17. See, in addition to the two cases referred to, Case 23/78 Meeth v Glacetal [1978] ECR 2133 at para. 5; Case 784/79 Porta-Leasing v Prestige International [1980] ECR 1517 at paras 5-7; Case 150/80 Elefanten Schub v Jacqmain [1981] ECR 1671 at paras 25 and 26; and Case 201/82 Gerling Konzern Speziale Kreditversicherung v Amministrazione del Tesoro,14 July 1983, at paras 14, 15, 17-18 and 20.

Thus, in summary, the formal requirements may be satisfied if a party actually knew that a jurisdiction clause was incorporated or if he was given notice that such a clause was incorporated and had reasonable opportunity of ascertaining its terms.

Such an agreement as to jurisdiction can be found either in the primary contract between the parties (sale of goods, carriage by sea, leasing) or be introduced by way of amendment to the primary contract or be contained in a separate contract relating to the choice of jurisdiction for the settlement of defined disputes. A clause will only be effective in respect of disputes in connection with the particular relationship envisaged in the agreement conferring jurisdiction, though it may be capable of including disputes as to the rights of third parties derived from the original agreement (Case 201/82 Gerling, supra).

The dispute in the present case, it is said, concerns the holder of a bill of lading and the carrier. Since the position between them may turn on whether the clause in issue in the bill of lading is valid for the purposes of Article 17 as between the shipper and the carrier, the latter question in argument has been, and I think has to be, considered first.

It seems to me quite impossible to say that a bill of lading can never be a contract in writing or evidence of a contract in writing between shipper and carrier for the purpose of proving a choice of jurisdiction clause within the meaning of Article 17. It must depend on the facts and the legal relationship created by the issue and acceptance of the bill.

In this case it is not possible to give a precise answer to the question related to the facts, since the reference does not make any finding as to essential facts or recite the findings made (if any) by the lower courts. The factual position is far less clear than it was in the other cases to which I have referred. I regret that this should be so for the reasons given in my Opinion in Case 227/81 Aubin v Unedic [1982] ECR 1991 at p. 2008.

For example, the original bills of lading refer to a shipper and a carrier with addresses in the United States; there is no finding that either is domiciled in a contracting State, and the carrier cited in the proceedings has a different name from the carrier mentioned in the bill of lading. Before Article 17 can apply at all, it thus has to be ascertained by the national court whether the original shipper or carrier was domiciled in a contracting State. If neither was so domiciled it must be ascertained by the national court whether there is a separate contract between the holder and the carrier incorporating the jurisdiction clause in the bill of lading. If there is no such contract, the question will arise as to whether in such a position the holder (which is domiciled in a contracting State) is substituted under national law for the shipper by transfer or assignment of the bill and whether he has actual knowledge of the choice of jurisdiction clause (or is given sufficient notice of it to enable him reasonably to ascertain its terms). If the holder is so substituted, with notice or knowledge of the clause, the question would then also arise as to whether the resulting contractual position fell within Article 17. This matter has not been argued, and since it may not be the relevant position to be considered, it seems to me that it is not necessary to decide it. My tentative view is that where a holder domiciled in a Member State is substituted for one of two contracting parties not so domiciled, the agreement as to jurisdiction with the holder does not fall within Article 17.

It seems from the copies of the bills which have been produced to the Court that a company called American Lumber International Inc., with an address in Pennsylvania, USA, shipped the timber on board the vessel “Tilly Russ” at Toronto, Canada. The bills were issued by Tolmar International Inc., with an address in Cleveland, Ohio, acting as agents for the carrier, Europe Canada Lakes Line, Ernest Russ America Inc. in Chicago.

Page 1 of the bills is headed “Europe Canada Lakes Line Ernest Russ, Hamburg”. Described as the “Short form bill of lading (not negotiable unless consigned ‘to order’)”, the bill incorporates by reference the terms of the carrier's “Long form bill of lading”. The print is small but clause 4 is headed in large type “Responsibility and jurisdiction”. Clause 4(a) incorporates, in respect of the carriage of goods from a Canadian port, the Water Carriage of Goods Act of Canada 1936. Clause 4(e) provides that any dispute under the bill shall be decided by the courts of Hamburg and “as far as not otherwise provided for in this bill of lading, according to German law”. The concluding words of page 1 are “Conditions continued on reverse side hereof”. The reverse side (marked page 2) contains the details of the shipment which have been typed in. The consignee is “Order of shipper” but Goeminne Hout in Belgium appears in the box “Notify party”. The bills are said to be dated at Cleveland, 16 August 1976.

The reference asked the Court to proceed “having regard to the relevant generally accepted practices”. These practices can at most be relevant in assisting the Court to decide whether under the version of Article 17 in force, the material tendered can constitute an agreement in writing or evidence in writing of an oral agreement as to jurisdiction. They cannot extend the effect of those words.

These generally accepted practices are in any event not set out and there is no agreement as to them between the parties appearing before the Court or as to the practice on the Great Lakes.

Thus counsel for Goeminne Hout contends, in a case like the present where there is no charterparty, that in practice the contract of carriage is made by an exchange of telexes between shipper and shipping agent merely reserving space for the cargo on the vessel. The bill of lading is issued after the contract is made, and, as in this case the bill states goods “on board”, would be issued after loading. He contends that the shipper and its agents did not sign the bill. The fact that the “copy not negotiable” which has been produced to the Court is not signed, however, is in my opinion not conclusive that the original was not signed or stamped. Moreover, although there is no section for the shipper to sign, it looks as if the name and address of the shipper's agent “Seaway Forwarding Corporation” was placed on the bill by a stamp.

The written arguments on behalf of the Italian Government appear to proceed on the basis that one copy of the bill is signed by the shipper and kept by the carrier, another is signed by the carrier and kept by the shipper. The Commission on the other hand supports the holder in arguing that the shipper does not know the terms of the bill of lading, which in practice he rarely signs, at the time the contract of carriage is concluded, so that a choice of jurisdiction clause is only valid if the shipper expressly agrees to it in writing.

Counsel for the United Kingdom contends that the normal practice in London is for preprinted forms of a bill of lading, issued by different shipping lines, to be bought from a stationers and a shippers agent is likely to have a stock of them. The shipper or his agent fills in the blank spaces on the bill and takes it to the carrier's agent who signs it on behalf of the carrier and hands it back to the shipper or his agent (see also Heskell v Continental Express Ltd [1950] 1 AER 1033 at p. 1037 where such practice is found to exist by Mr Justice Devlin). Since these bills are drawn up in Cleveland, Ohio, it is also appropriate to note that according to “American Jurisprudence” Second Edition, Vol. 13, “Carriers” para. 276, “It is customary for a shipper making frequent shipments to have blank bills of lading in his possession and to fill them out himself and to present them for signature to the carrier at the time the goods are delivered”.

On these divergent views as to what might have happened, which must be resolved by the national court, it seems to me that the most that can be said in answer to the first part of the question raised is on the following lines.

If as a matter of national law the bill of lading is the contract of carriage and the jurisdiction clause is clearly incorporated in it in a way already indicated by this Court, that clause is valid.

If the contract of carriage is made, whether orally or in writing, prior to the issue of the bill of lading

(a) The jurisdiction clause in the bill is valid if the bill is under national law to be treated as, or as evidence of, a legal transaction incorporating an agreement as to jurisdiction separate from the contract of carriage.

(b) The jurisdiction clause in the bill is valid if the oral or written contract of carriage expressly incorporates the jurisdiction clause to be contained in the bill or the general conditions contained in the bill, including the jurisdiction clause, and such clause or conditions are either known to the shipper or could by reasonable diligence have been ascertained by him before entering into the contract of carriage.

(c) The clause in the bill is valid if there has been a course of dealing (or continuing trading relationship) between shipper and carrier, directly or through agents, during which contracts of carriage between- them were subject to the terms of the bill of lading. From such course of dealing the shipper must have known, or been in a position where reasonably he could have known, that the carriage was on the terms of the bill, including the jurisdiction clause, so that he must be taken to have accepted this expressly or by conduct in such a way that it would be a breach of good faith to deny their applicability. I would reject the Commission's argument that over 70% of the shipper's trade must be with the carrier before he can establish such a course of dealing. It is a question of fact in each case as to whether from a series of transactions the shipper has, or must be taken to have, known of the clause and to have accepted it.

If a dispute arises as to, or under, the bill of lading itself, regardless of the question as to whether a separate contract of carriage exists,

(a) If the bill is completed by the shipper or his agent who writes or stamps the shipper's name on it, and is handed to the carrier or his agent who accepts it by signing or stamping the carrier's name on it, that is a sufficient agreement in writing or an agreement evidenced in writing as to the jurisdiction clause for the purposes of Article 17.

(b) If the bill is completed by the carrier and delivered to the shipper who signs it or otherwise recognises it in writing, or who with actual knowledge or reasonable notice of its terms, accepts or acts upon the bill, that is sufficient to constitute an agreement evidenced in writing as to the jurisdiction clause for the purposes of Article 17. In the present case the fact that the typed insertions are on page 2 of the bill is to my mind sufficient to give notice that there is a page 1, although plainly the carrier would be wiser to include on page 2 a reference to the terms of page 1.

In all these cases, however, the agreement is limited to disputes arising “in connection with a particular legal relationship” as defined expressly or impliedly in the clause. Disputes outside the ambit of such clause would not be subject to the choice of jurisdiction clause.

The case of Gerling (supra), which has been relied on in arguments dealing with the position of the holder of the bill of lading as against the carrier, clearly recognises that a beneficiary under an insurance policy, who is not a party to the contract of insurance, may plead a choice of jurisdiction clause against the insurer, if the policy was taken out in his favour and if the clause is wide enough to cover disputes between the beneficiary and the insurer, even though the beneficiary has not signed the clause but so long as the insurer has clearly evinced his acceptance of the clause relied on. That was a case where Article 12 of the Convention gave some guidance (which is not so here) and, of course, was a case where the clause was invoked against a party to the original agreement. Thus the choice of jurisdiction clause can be wide enough to cover third parties, who can be “parties” for the purpose of Article 17. It does not, however, automatically follow that such a clause can be relied on by a party to the contract against a third party as assignee or transferee of the benefit of the contract. On the other hand the Gerling judgment docs not indicate that it may not be relied on and the question seems to me to be open.

Again, the answer to the question must, in my view, turn on the facts and the nature of the third party's relationship with the adversary, a party to the agreement on the choice of jurisdiction clause. In my opinion, if the holder's rights against the carrier derive under the applicable national law from the transfer of the bill from the shipper by indorsement or assignment or otherwise, then a jurisdiction clause valid as between shipper and carrier will, in the ordinary way, be equally valid as between the holder and the carrier. If the holder takes subject to all the clauses in the bill, they include the jurisdiction clause (if it was validly proved as between the original parties), even if the assignee or indorsee has not specifically signed the clause. In the present case it is plain to my mind that the third parties were contemplated by the terms of the bill of lading including the choice of jurisdiction clause. The bill was expressed to be not negotiable unless consigned to order; it was specifically declared to be consigned to order of shipper. Moreover, it is clear that a substantial number of disputes over bills of lading involve indorsees and the carrier rather than the original parties to the bill, and the holders can be seen to be within the ambit of the clauses included in the bill including the jurisdiction clause.

If the holder does not stand in the shoes of the original shipper under the applicable national law, then a new agreement has to be found between the holder and the carrier, either in writing or evidenced by writing, on a choice of jurisdiction clause. It does not seem to me that the mere presentation by the holder of the bill, who has already purchased the goods, to the carrier would in itself constitute such an agreement or evidence of an agreement for the purposes of Article 17. If there is, on the other hand, a specific contract between carrier and third party holder as to choice of jurisdiction (which may be unlikely) then the validity of the clause will depend on the rules already indicated by the Court.

I conclude accordingly that the question referred should be answered on the lines

1. If under the applicable national law a bill of lading constitutes an agreement between the carrier and the shipper, which expressly states or clearly incorporates by reference a choice of jurisdiction clause, the bill of lading can be an agreement in writing for the purpose of Article 17 of the Brussels Convention 1968. A bill of lading may constitute evidence in writing of an oral agreement as to a choice of jurisdiction for the purpose of Article 17, if the oral agreement expressly incorporates the conditions in the bill including the choice of jurisdiction clause, and the clause is known to the shipper (or could with reasonable diligence have been ascertained by him prior to the making of the contract), or if such a clause has been adopted in a course of dealing between the parties.

2. A holder of such a bill may be bound by a choice of jurisdiction clause if he has expressly agreed to be bound by it in writing, or in a written statement evidencing an oral agreement to be bound by it, or if, under the law applicable to the transfer of the bill, the holder succeeds to all the rights and obligations of the shipper under the bill which, as between shipper and carrier, constituted an agreement in writing, or written evidence of an oral contract for the purposes of Article 17, and in either case so long as the dispute between the carrier and the holder of the bill is one falling within the scope of the choice of jurisdiction clause.

The costs of the parties in the main proceedings fall to be dealt with by the court seized of the case; no order should be made as to the costs of the Commission or of the Italian or the United Kingdom Governments.