Opinion of T. G. COUTTS. Q.C.
1. In this action of payment the pursuers are an Italian company
suing a Norwegian company who are the owners of a vessel flying the
Panamanian flag. They sue in respect of bunker fuel obtained by the
Cypriot charterers of the vessel at two locations, namely in Turkey and
in Sicily. The pursuers established jurisdiction against the defenders
by arrestment of the vessel ad fundandam jurisdictionem at Aberdeen.
Defences were lodged to the action; the jurisdiction of the Scottish court
was admitted, but in the course of adjustment, the pursuers tabled a plea
in law, which they amended at debate, in the following terms:
"ante omnia the action should be sisted pending determination of the
parties' dispute by the Italian courts".
The cause appeared in procedure roll for consideration of the said plea.
2. The pursuers allege that there was a contract between them and
the defenders which governed the said supplies. The existence of such
a contract is denied and intimation to the defenders of any terms and
conditions which might have applied to such a contract is not admitted. It
is admitted that the vessel received bunkers at Turkey and Sicily but it is
claimed that the delivery note expressly states "only for charter account".
The defenders maintain that it was the charterers who contracted with
the pursuers. Accordingly it is clear that almost the whole basis upon
which the pursuers sue, both on fact and on liability, is challenged by the
defenders and will require to be resolved.
3. Counsel for the pursuer in arguing for a sist made it plain that he
was making an unusual request in unusual circumstances. He was
unable to point to any precedent directly in point for the course he
proposed. He sought to draw an analogy from the provisions of the
Brussels Convention of 1952 which specifically envisage arrestment
of a vessel which lying within the jurisdiction of one country where a
claim is litigated in a different country. The arrestment of the vessel
is a real diligence directed against the vessel herself for the purpose
of securing the pursuers' claim. It was, he said, more appropriate that
the resolution of the dispute between the parties be determined in the
courts of Italy since by convention terms the existence of a contract,
and therefore, the application of its terms and conditions, falls to be
determined according to Italian law, as the law of the putative contract
(Article 8, Rome Convention).
4. For the defenders, counsel summarised his contentions as follows.
Firstly, having raised a full-blown action in the Scottish courts the
pursuers have ceased to have any right to raise another action; secondly,
so long as the present action is in dependence, there is no right in any
other court to hear the case having regard to both the Brussels and
Lugano Conventions; thirdly, that in any event if there is available another
competent court, is not clear that the law of Italy will apply and there is
not any preponderance of circumstances which makes Italy more suitable
than Scotland to try the issue between the parties and, finally, that by
pursuing the course of raising the action in Scotland the pursuers have
waived any right to raise it elsewhere while the present action remains
before the Scottish court.
5. The law which applies to the present circumstances is governed by
rules of international convention to which Italy, Norway and the United
Kingdom are parties.
Applicable Legislation
6. It is convenient, since both parties referred to them at length, to
note the legislation and conventions applicable to a dispute like the
present. One may start from the position that arrestment of a ship to
found jurisdiction or the arrestment of a ship in rem was part of the
common law of Scotland, unaffected by the Brussels Convention, a matter
discussed by Lord Prosser in Ladgroup Ltd. v Euro East Lines S.A. 1997
S.L.T. 916.
7. The Arrest Convention of 1952 provides inter alia:
"Article 3
(3) A ship shall not be arrested, nor shall bail or other security be given
more than once in any one or more of the jurisdictions of any of the
Contracting States in respect of the same maritime claim by the same
claimant; and, if a ship has been arrested in any one of such jurisdictions,
or bail or other security has been given in such jurisdiction either to
release the ship or to avoid a threatened arrest, any subsequent arrest
of the ship or of any ship in the same ownership by the same claimant
for the same maritime claim shall be set aside, and the ship released by
the Court or other appropriate judicial authority of that State, unless the
claimant can satisfy the Court or other appropriate judicial authority that
the bail or other security had been finally released before the subsequent
arrest or that there is other good cause for maintaining that arrest."
and
"Article 7
(1) The Courts of the country in which the arrest was made shall have
jurisdiction to determine the case upon its merits:
- if the domestic law of the country in which the arrest is made give
jurisdiction to such Courts;
...
(2) If the Court within whose jurisdiction the ship was arrested has not
jurisdiction to decide upon the merits, the bail or other security given
in accordance with Article 5 to procure the release of the ship shall
specifically provide that it is given as security for the satisfaction of
any judgment which may eventually be pronounced by a Court having
jurisdiction so to decide; and the Court or other appropriate judicial
authority of the country in which the arrest is made shall fix the time
within which the claimant shall bring an action before a Court having such
jurisdiction
(3) If the parties have agreed to submit the dispute to the jurisdiction of
a particular Court other than that within whose jurisdiction the arrest was
made or to arbitration, the Court or other appropriate judicial authority
within whose jurisdiction the arrest was made may fix the time within
which the claimant shall bring proceedings."
8. The Civil Jurisdiction & Judgments Act 1982 incorporates and sets out
in Schedule 1 the Brussels Convention. The Lugano Convention is also
incorporated into Scots law. Although the United Kingdom and Italy are
signatories to both, Norway is only a signatory to the Lugano Convention.
The provisions which apply to the present matter are identical in both.
These are Article 18, Article 21, Article 22 and Article 57:
"Article 18
Apart from jurisdiction derived from other provisions of this Convention,
a court of a Contracting State before whom a defendant enters an
appearance shall have jurisdiction. This rule shall not apply where
appearance was entered solely to contest the jurisdiction, or where
another court has exclusive jurisdiction by virtue of Article 16."
"Article 21
Where proceedings involving the same cause of action and between the
same parties are brought in the courts of different Contracting States,
any court other than the court first seised shall of its own motion stay its
proceedings until such time as the jurisdiction of the court first seised is
established.
Where the jurisdiction of the court first seised is established, any court
other than the court first seised shall decline jurisdiction in favour of that
court."
"Article 22
Where related actions are brought in the courts of different Contracting
States, any court other than the court first seised may, while the actions
are pending at first instance, stay its proceedings.
A court other than the court first seised may also, on the application of
one of the parties, decline jurisdiction if the law of that court permits the
consolidation of related actions and the court first seised has jurisdiction
over both actions.
For the purposes of this Article, actions are deemed to be related where
they are so closely connected that it is expedient to hear and determine
them together to avoid the risk of irreconcilable judgments resulting from
separate proceedings."
"Article 57
1. This Convention shall not affect any conventions to which the
Contracting States are or will be parties and which, in relation to
particular matters, govern jurisdiction or the recognition or enforcement
of judgments."
Reference was also made to the Rome Convention. The Contracts
(Applicable Law) Act 1990 enacts that the Rome Convention shall have
force of law. It is there provided:
"Article 8
Material Validity
1. The existence and validity of a contract, or of any term of a contract,
shall be determined by the law which would govern it under this
Convention if the contract or term were valid.
2. Nevertheless a party may rely upon the law of the country in which he
has his habitual residence to establish that he did not consent if it appears
from the circumstances that it would not be reasonable to determine the
effect of his conduct in accordance with the law specified in the preceding
paragraph."
"Article 15
Exclusion of renvoi
The application of the law of any country specified by this Convention
means the application of the rules of law in force in that country other
than its rules of private international law."
The Submission for the Pursuers
9. The court is entitled to look at the averments and consider whether
this claim, where it is asserted there was agreement and that is denied,
should proceed in Scotland when the defender disputes the existence of
the agreement that requires to be resolved. That requires to be resolved
by the application of Article 8 of the Rome Convention and it would be
proper to sist to enable the proper jurisdiction, that of Italy, to determine
the matter. Although the pleadings in the case would indicate that there
might be a renvoi situation since Italian law says that the current dispute
would be governed by the law of the flag, that did not apply to a decision
about the existence of the contract. The substantial litigation would be
in Italy since there would be reference to Italian law. The court may, by
section 49 of the Civil Jurisdiction Act, sist a case and since there is no
inconsistency with any of the Conventions, it is an option which is open to
the pursuers to have the case sisted to determine the case elsewhere.
10. The matter is akin to a plea of forum non conveniens where the
principles to be applied require compelling reasons for ordering that
a case be heard elsewhere. The present case has no connection with
Scotland other than the fact that there was an arrestment to found
jurisdiction there. The defenders are Norwegian, the pursuers are Italian,
the supplies were either one supply or a supply in Italy and a supply
in Turkey. There are no connecting features with Scotland. See for the
appropriate principles Credit Chemiquie v James Scott Engineering Group
Ltd. 1979 S.C. 406 and Spiliada Maritime Corp. v Ansulex Ltd. 1987 1
A.C. 460.
11. With regard to the defender' plea invoking waiver, there are no
averments of the quality envisaged by Lord Fraser in Armia Ltd. v Daejan
Developments Ltd. 1979 S.C. (H.L.) 56. The pursuers could not be said to
have abandoned any right they may have to sist the action.
Argued for the Defenders
12. No dispute arises about the jurisdiction of the Scottish court. The
pursuers have invoked that jurisdiction and the defenders do not contest
it. None of the cases in which forum non conveniens was discussed were
cases in which the pursuer sought to change his forum. Because of the
terms of the Convention, any court before whom this dispute was raised,
be it Italian or Norwegian, would be bound to stay its proceedings in order
that the matter be determined by the court first seized of the jurisdiction.
Scotland was the court first seized of the jurisdiction and cannot in terms
of the Conventions be supplanted, unless by agreement. The defenders
did not enter appearance in order to contest jurisdiction, as envisaged
by Article 18. The pursuers could, if they wished, have raised their action
in Italy and they would have had the facility to arrest in security in any
of the other Convention States under Article 24. They did not do so and
the effect of the pursuers' present motion is to invite the court to assume
that they did. The E.C.J. case of The Tatry 1999 Q.B. 515 contains in the
Advocate General's opinion at 521 the following view:
"Once the plaintiff chooses a court by instituting proceedings for the
arrest of a vessel, the court before which the same action is again brought
later must do no more than simply dismiss it on the ground that the same
proceedings have already been commenced elsewhere."
The court held that Article 57 of the Brussels Convention specifically
subordinated that Convention to existing rules.
13. With regard to the present case the pursuers had had a free choice.
The pursuers' proposal conflicts with the provisions of the Convention and
there is no other tribunal having competent jurisdiction which could more
suitably be invoked for the interests of all the parties and for the ends of
justice – following Lord Kinnear in Sim v Robinow 19 R. 665 at 668.
14. By invoking the jurisdiction of the Scottish court in the way that has
occurred, the pursuers have waived any right to say that the forum they
have chosen is inconvenient. The defenders have entered appearance and
lodged defences to the action in which the Record has now closed.
Decision
15. The pursuers' motion is refused. The telling circumstance in the
present case is that the pursuers had invoked the jurisdiction of the
Scottish court and have litigated in Scotland to the Closed Record stage.
That jurisdiction is not challenged by the defender and the defender does
not assert that his case could be more conveniently dealt with elsewhere.
In these circumstances it would take some extraordinary feature to entitle
the court against the wishes of the defender to permit the pursuer to
forum-shop having secured his jurisdiction and his arrestment. No doubt
it might be convenient for the pursuers to litigate in Italy, particularly
if the result of that would be that the law of the flag would apply to
the merits and that means as I understood counsel that the owners of
the ship was primarily responsible for the contract of the charterer. But
that was a matter which the pursuers should have considered when
raising their action. The present proposal by the pursuers that the court
sist pending the raising of some other action could be described as
opportunistic. If the pursuers wish to litigate in Italy they can abandon
the action here and raise an action there. If however they wish to retain
the benefit of the arrestment and jurisdiction they have invoked, they
must proceed with the case as it stands with any inconvenience that that
may cause them. Whether it is any more inconvenient for Norwegian
defenders to litigate in Italy about a contract than it would be to litigate
in Scotland about the same contract does not require to be considered.
Foreign law is a matter of evidence in any forum.
16. I agree with the submission made for the defenders that so long as
the present action remains before the Scottish court, no other action can
be raised elsewhere since in terms of the Convention such an action would
require to be dismissed. That has in my view been made absolutely plain
by the E.J.C. in Tatry.
17. The course proposed by the pursuers would fly in the face of the
rules and the Conventions. Nor was I persuaded that the suggested
convenience of litigating elsewhere would have been sufficiently
compelling for the court to sist the action, even if it were appropriate
for the pursuer to suggest that course, when the defender opposes it.
Finally, I would have considered in the present case that the actings of the
pursuers and those of the defenders as a consequence thereof amounted
to waiver of any right to suggest that the cause should be sisted for the
purposes of litigating elsewhere. I consider that by raising the action
and pursuing it to the stage of a Closed Record the pursuers have lost
any entitlement to a sist. The analogy of an action being raised and then
sisted for arbitration where the contract between the parties contains an
arbitration clause was canvassed but matters are entirely different in that
example. The original court retains ultimate control of the proceedings. In
this case the original court would lose any opportunity of supervision.
18. Parties were agreed that should the application to sist fail, the
appropriate course would be to allow a proof before answer and I shall
accordingly repel the pursuers' first plea-in-law, sustain the defenders'
first plea-in-law and allow a proof before answer.