THE PRESIDENT: I have had the advantage of reading in draft the
judgment prepared by Saville L.J. I agree with it and have nothing that I
wish to add.
LORD JUSTICE SAVILLE: On 20 th November 1995 the vessels “D.” and
“H. F.” were in collision on the River Seine, while the former vessel was en
route for Rouen and the latter was proceeding to sea. On 21 st November
the owners of the “H. F.” obtained an order from the Commercial Court at
Rouen for court surveyors to investigate the cause of the collision and on
the following day this investigation began.
On 28 th November 1995 the owners and bareboat charterers of the “H.
F.” arrested the “D.” at Le Havre.
On 22 nd December seven claimants, including the owners and members
of the U. pool which was operating the “H. F.”, issued an “assignation“(the
French equivalent of a writ) in the Commercial Court at Le Havre against
the owners of the “D.” claiming damages arising out of the collision. This
they were entitled to do not only because the collision had occurred in
France but also because the vessel had been arrested there.
The “D.” had been time-chartered by her owners to Seerederei B.-L.
GmbH. The charterparty contained a German arbitration clause, but early
in 1996 this was changed by agreement to an exclusive English law and
jurisdiction clause. It was the timecharterers and not the owners of the
“D.” that suggested this change.
On 13 th March 1996 the time-charterers issued a writ in the London
Admiralty Court against the owners of the “D.” claiming damages for
breach of the charterparty and other relief in respect of the collision.
The owners of the “D.” accepted service of this writ and a few days later
instituted limitation proceedings in the same Court, naming the owners
and bareboat charterers of the „H. F. ”, the time-charterers of the “D.” and
„all other persons claiming or being entitled to claim damages by reason
of the collision between the ship D. and the ship H. F. which occurred on
the River Seine on 20 th November 1995.“The owners of the “D.” then
purported to constitute a limitation fund in England in the sum of £1.79
million. The owners were entitled to launch these limitation proceedings
in England because of the action brought against them there by the
timecharterers.
During this period the “D.” had remained under arrest at Le Havre but
was eventually released on 2 nd May 1996 against a letter of undertaking
from the P & I Club concerned. On the following day S. N., one of the
members of the U. pool and a claimant in the collision proceedings in
the Le Havre Commercial Court, acknowledged issue of the writ in the
limitation proceedings and applied to set aside or stay those proceedings
under Article 21 or Article 22 of the amended Brussels Convention, which
is part of our law by virtue of the Civil Jurisdiction and Judgments Act
1982. It should be noted that the reason why only S. N. (as opposed to
all the claimants in the French proceedings) made this application was
over concerns that taking this step might constitute a submission to the
“merits” as opposed to the “jurisdiction” jurisdiction of the English Court,
since the rules of court relating to limitation do not contain the safeguards
built into the general rules. By selecting only one claimant the risk was
confined to that claimant.
Articles 21 and 22 provide as follows:-
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.”
These Articles appear in Section 8 of the Convention. This Section is
intended, in the interests of the proper administration of justice within the
Community, to prevent parallel proceedings before the Courts of different
Contracting States and to avoid conflicts between decisions which might
result therefrom: see Gubisch Maschinenfabrik v Palumbo [1987] ECR
4861.
In a judgment dated 3 rd December 1996 Longmore J decided that
although the matter fell outside the provisions of Article 21, the French
collision proceedings and the English limitation proceedings were “related
actions“within the meaning of Article 22, and stayed the latter so far as S.
N. were concerned. From this judgment the owners of the “D.” appeal to
this Court.
It would normally be appropriate to consider Article 21 before Article
22, since apart from anything else the application of the former (if the
jurisdiction of the court first seized is established) requires the court other
than the court first seized to decline jurisdiction, rather than to exercise
a discretion. However, the Appellants, having succeeded before the Judge
on Article 21, were intent only on attacking the decision on Article 22,
while the Respondents, though challenging the decision on Article 21,
were principally concerned with seeking to uphold the decision on Article
22 and were, in effect, content that the limitation action should merely
be stayed. Thus, at least so far as the parties are concerned, if the judge
was right in staying the English limitation action as against S. N., the
question whether this should be under Article 21 or Article 22 is academic.
Accordingly in this case it is appropriate to consider first whether the case
falls within Article 22.
On behalf of the owners of the “D.” Mr Tomlinson QC criticized the two
reasons the judge gave for regarding the collision action in France and
the limitation action in England as being “related actions.” These reasons
were firstly, that there was an obvious overlap of factual issues and
secondly, that the French court would take the view that it was seized of
the question whether the owners of the “D.” were entitled to limit their
liability.
So far as the first of these reasons is concerned, it seems not to be
seriously in issue that the immediate cause of the collision was the
failure of the steering gear of the “D..“Mr Tomlinson submitted that the
establishment of this fact alone would provide sufficient „faute“on the
part of the “D.” to enable the claimants in the French collision action to
succeed, without the need to investigate whether anyone was to blame
for what happened. It followed, submitted Mr Tomlinson, that there
was really no risk that a judgment of the French Court would conflict
with a judgment on limitation in this country, since the latter would be
exclusively concerned with the question whether the loss resulted from
the „personal act or omission” of the owners, “committed with the intent
to cause such loss, or recklessly and with knowledge that such loss would
probably result”, these being the requirements for breaking the limit
prescribed by Article 4 of the 1976 Limitation Convention.
In my view the premise on which this argument is based is unsound.
It seems to me to be clear, from the evidence of the French lawyers
put before us, that “faute“requires not merely the identification of the
immediate cause of the collision, but proof that someone was to blame for
what happened. The passages in the evidence upon which Mr Tomlinson
relied do not support his proposition, for all they do is to make clear that
“faute“does not require proof that it was the owners or their managers,
rather than the Master or crew of the vessel, who were to blame. In
this regard, there would appear to be little if any difference between
French and English law. Furthermore, it is noteworthy that the surveyors
appointed by the French Court have been engaged in investigating not
just the immediate cause of the collision, but also what led to the failure
of the steering gear, all in accordance with the order made by the court
which appointed them.
As to the English limitation action, it seems to me that although any
challenge to the right to limit has indeed to be based on Article 4 of the
Convention, the question whether the owners were personally at fault
cannot be examined in a vacuum, divorced from the circumstances of
the collision itself. As Mr Gross QC put it on behalf of the Respondents, a
limitation action begins and ends with what sequence of circumstances
brought about the collision, for until this is ascertained it is simply
impossible to embark on inquiring whether the owners were personally to
blame for the loss in question, let alone whether they had the necessary
intent or knowledge with regard to that loss.
Longmore J expressed his first reason for considering the two actions to
be related in the following terms:-
“First, no admission of liability has been made by the owners of D.. The
French action will, therefore, have to canvass questions of the failure
of the vessel’s steering gear, the reasons for such failure, whether the
owners of D. were negligent or at fault and the degree of such fault. There
is an obvious overlap between such issues and the issues that will arise
in the limitation action viz. whether the claimants’ loss resulted from the
personal act or omission of the company owning D. “committed recklessly
and with knowledge that such loss would probably result.””
In my judgment, on the material before the Judge, this reason cannot
be faulted on the grounds suggested by Mr Tomlinson and which I have
already considered, nor can I accept his further suggestion that these
issues are secondary rather than primary and thus can be disregarded for
the reasons given by Evans LJ in Sarrio v KIA [1997] 1 Lloyd’s Rep. 113
at 121. In my view they are primary issues central to both the collision
and the limitation actions.
Mr Tomlinson then sought to rely on the fact that since the judgment
of Longmore J his clients have in fact admitted liability in the French
proceedings and submitted that accordingly there is now no risk of
irreconcilable judgments.
In my view this court should not take this matter into account. It seems
to me that as a general rule, and save perhaps in the most exceptional
circumstances, the question whether actions are related must be judged
on the basis of the material put before the court first concerned with this
question. To allow otherwise would be to encourage appeals and thus
to add to delay and expense in deciding which court in the Community
should deal with the substantive rights and obligations of the parties. This
can hardly be in the interests of the proper administration of justice within
the Community.
I consider there to be no exceptional circumstances in this case. No
reason was advanced to explain why the admission of liability was only
made shortly before the hearing of this appeal, rather than before
Longmore J (where liability was not admitted) and the irresistible
inference is that this was done for tactical reasons, in an attempt to
bolster the Appellants’ case on appeal. It seems to me that what Lord
Templeman said in Spiliada v Cansulex [1987] 1 AC 460 at 465, albeit
in relation to a different aspect of competing jurisdictions, is equally
applicable to questions arising under Section 8 of the Convention.
Quite apart from this, I am not persuaded that the admission of liability
in the French proceedings will in fact have the effect suggested by
Mr Tomlinson. There is no doubt that the French Court will now hold
the “D.” liable for the collision, but the surveyors are continuing their
investigations and there is at the least a strong possibility that in giving
judgment the French Court will adopt the conclusions of the Court experts
on the sequence of events (including who was to blame) which led to the
failure of the steering gear. To my mind it is self-evident that there is a
risk that those conclusions could turn out to be irreconcilable with the
conclusions reached in a separate limitation action in this country.
I now turn to the second reason given by the judge for concluding that
the actions were related, namely his view that the French Court would
take the view that it was seized of the question whether the owners of the
“D.” were entitled to limit their liability.
Mr Tomlinson sought to criticize this reason on the grounds that it was
inconsistent with the conclusion reached by Longmore J on Article 21.
The reason Longmore J reached the conclusion he did on Article 21 was
that he regarded the liability proceedings in France and the limitation
proceedings in England as not involving the same “cause“or “object”
within the meaning of the Article, as it is to be read in accordance
with European law: see Gubisch Maschinenfabrik v Palumbo (supra at
page 308). In his view a shipowner’s right to limit does not attach to or
qualify the claimant’s claim but operates to limit the extent to which an
unqualified right can be enforced against the limitation fund. As the judge
put it:
“It must, to my mind, follow that the French proceedings do not
“involve“the same cause of action as the English proceedings. The English
proceedings are at once narrower and wider than the French proceedings;
narrower, because the right to limit is merely procedural and does not
affect the substantive rights of the French claimants and wider, because
the English proceedings purport to invoke a right which is good against
all possible claimants (viz. the world) whereas the French proceedings
seek only to invoke rights between the parties to those proceedings. The
proceedings do not, therefore, have the same “object or cause”, do not
involve the same cause of action and Article 21 of the Convention has,
therefore, no application.”
I shall assume, for the purposes of the argument, that this conclusion
is correct. Mr Tomlinson submitted that this conclusion inevitably meant
that the French court was not seized of limitation issues and so could not,
consistently with the Convention, take the view that it was first seized.
He further submitted (in my view correctly) that it would be wrong to
proceed on the basis that the French court would ignore or fail properly
to apply the Convention. Building on this Mr Tomlinson submitted that if,
as had to be assumed, the French court applied the Convention, it would
have to conclude that the English court was first seized of the issue of
limitation and would accordingly have to decline jurisdiction or at least
stay limitation proceedings brought in its court, so that in this respect
there would be no risk of irreconcilable judgments.
I disagree. As Mr Gross pointed out, Article 21 is concerned with
proceedings and Article 22 with actions. The questions are whether the
proceedings involve the same cause or object or whether the actions
are related. It is thus a misreading of the Convention to ask which
court is first seized of issues which are or might be raised within the
proceedings or actions. If such were the case, then the Articles would
achieve precisely the opposite of their intended purpose, which is to
achieve the proper administration of justice within the Community, since
the courts of one country would have to decline jurisdiction in respect
of some issues and the courts of another country in respect of others, a
recipe not merely calculated to produce irreconcilable judgments but also
to encourage the multiplicity of proceedings in different countries of the
Community.
In the present case, having decided that the two proceedings did not
involve the same object and cause, the judge turned to consider whether
the actions were related. His second reason for deciding that they were
rested on the fact that in his view it was established that the French
court would regard itself as seized of limitation issues and indeed would
regard itself as so seized before the institution and service of the English
limitation action. There was plenty of material to support that view
and I can see no good reason to depart from it. Such a view does not,
to my mind, entail that the French court would be ignoring or failing
properly to apply the Convention if, as seems likely, it proceeds to deal
with limitation.. It simply does not follow from the fact that the English
court concluded that the two proceedings did not involve the same
object and cause that the French court lacked jurisdiction to deal with
limitation in the suit there. To assert otherwise comes close to saying that
proceedings not involving the same object or cause cannot be related
actions, which (if correct) would deprive Article 22 of any purpose. The
argument also seems to ignore the fact that whether or not the French
court can properly deal with limitation in the suit there is a is a matter for
the French court to decide: see Overseas Union Ltd v New Hampshire Co.
[1992] 1 QB 434.
For present purposes all that matters is that the judge was justifiably
satisfied that the French court would conclude that it could and should
deal with limitation. From this it inevitably followed that there was a
risk of irreconcilable judgments and thus that the actions were related.
Of course, if the French court did after all take the unlikely course of
declining jurisdiction or otherwise refused to deal with limitation there
would be an opportunity to seek to revive the English action, for it has
only been stayed.
For these reasons, I take the view that the attack on the second of the
reasons the judge gave for treating the actions as related cannot be
sustained. I should perhaps make clear, however, that I should not be
taken as having implicitly agreed with the conclusion reached by the
judge on Article 21. As a pure matter of English law, his analysis of the
differences between a liability action and a limitation action cannot be
faulted, but here we are dealing with a question of European law, and I
would remain to be persuaded that the cause and object are not the same
in the two proceedings under discussion.
There remains the question of the exercise of the judge’s discretion under
Article 22. The point made by Mr Tomlinson in this connection is that
the court has no inherent jurisdiction to stay the limitation action at the
request of one party, where there are other claimants, and he relied upon
“The Falstria” [1988] 1 Lloyd’s Rep. 495 for this proposition.
There are three answers to this point. The first is that before the judge
it was the contention of Mr Tomlinson’s clients that if the action was to
be stayed, this should only be as against S. N.. Accordingly it hardly lies
in the mouth of the owners to criticize the judge for taking this course.
The second is that the case upon which Mr Tomlinson relied was not
concerned with Article 22, which to my mind gives the court the power
to stay a limitation action as against one claimant, though whether or
not it chooses to do so will doubtless depend on all the other relevant
circumstances. The third answer is that in the present case those other
circumstances include the fact that all the claimants with the exception
of the timecharterers appear ready and willing to deal with limitation
in France, and even the timecharterers do not appear to be opposed to
this happening. Indeed, it lies in the owners’ control whether or not the
timecharterers are kept to their agreement to litigate in England. For
obvious reasons, it would on the face of it be desirable that liability and
limitation issues should be dealt with in the same jurisdiction, which is of
course a reason for the insertion of Article 6A in the Convention. In short,
I can find nothing to suggest that the judge was plainly wrong in the way
in which he exercised his discretion, so as to entitle this court to interfere;
indeed I consider that he was plainly right.
In these circumstances I would uphold the decision of Longmore J that
the limitation action should be stayed as against S. N. under Article 22 for
the reasons that the judge gave. I should add that I have no doubts about
this, and accordingly do not consider that this is a case which should be
referred to the European Court.
LORD JUSTICE SCHIEMANN: I also agree.
Order: Appeal dismissed with costs;
application for leave to appeal
to the House of Lords refused.