The International Maritime Law Seminar has published its first Newsletter, with the contribution of Luis de San Simón and his article “Validity of Foreign Jurisdiction Clauses in Bills of Lading Under Spanish Law“.
Spanish Courts are now applying the provisions of the Spanish Shipping Act 14/2014 (LNM) which came into force on 25 September 2014 and jurisdiction clauses in bills of lading is one of the aspects of the LNM which is being developed by Spanish Courts.
Before the LNM was enacted, the trend of the Spanish Courts had been to dismiss cargo claims brought by cargo owners or their subrogated underwrites for lack of jurisdiction in the presence of jurisdiction clauses in bills of lading in the light of the Brussels Convention and the Regulation 44/2001.
Spain is an eminently shipper country where a majority of the imported / exported cargo is carried by foreign shipping companies. It is not surprising that the above trend was not popular in the cargo sector and the jurisdiction clauses in bills of lading was a hot topic in Spain to the extent that the Preamble of the LNM echoes to some extent the position of the cargo sectors. This preamble says that the LNM contains what are known as specialities of jurisdiction that, based on the preferential application in this matter of the rules contained in the international conventions and in the provisions of the European Union, aims to avoid abuse detected, declaring the nullity of clauses of submission to a foreign jurisdiction or arbitration abroad, when those have not been negotiated individually or separately.
The LNM contains two relevant provisions on jurisdiction clauses. Article 468 declares that without prejudice to the terms foreseen in the international conventions in force in Spain and the provisions of the European Union, clauses of submission to a foreign jurisdiction or arbitration abroad shall be null and void and considered not to be included as set forth in contracts for use of the ship, or in ancillary navigation contracts, when they have not been negotiated individually and separately. This provision of law goes on saying that in particular, insertion of a jurisdiction or arbitration clause in the printed conditions shall not provide evidence in itself of fulfilment of the requisites established therein.
On the other hand, article 251 of the LNM declares that the acquirer of the bill of lading shall acquire all the rights and actions of the conveyor to the goods, with the exception of agreements regarding jurisdiction and arbitration, which shall require the consent of the acquirer.
The Valencia Court of Appeal has already issued three decisions in relation to the validity of foreign jurisdiction clauses in bills of lading.
It has been pointed out in the three decisions that the examination of the submissions clauses is to be done on “a case – by – case – basis”. Though this is basic not all the Courts in the past had done such an analysis. Rather, some Courts had simply limited themselves to follow the trend to dismiss cargo claims for lack of jurisdiction without performing a strict analysis.
The decisions have also declared that not always and in every case the incorporation of a foreign jurisdiction clause automatically defeats the Spanish Tribunal’s jurisdiction to hear the case.
In the first of the decisions of the Valencia Court of Appeal, dated 27 July 2016, the Court did not admit the validity of the jurisdiction clause because the Court was not satisfied that there was an agreement given that the party challenging the jurisdiction clause was not aware of the usage of trade in relation to foreign jurisdiction clauses in bill of lading.
In the second of the decisions of the Valencia Court of Appeal, also dated 27 July 2016, the validity of the jurisdiction clause was admitted because of the ample experience of both parties in the industry and the prior course of dealing between them.
In the third of the decisions, dated 17 November 2016, the Valencia Court of Appeal also upheld a jurisdiction clause in a bill of lading stating that the recast Brussels Regulation (1215/2012) prevails over national provisions of law (article 248 of the LNM) when the jurisdiction clause refers to Courts of a Member State and that there has to be a valid agreement within the meaning of the Regulation for the clause to be valid and binding.
Later, the Barcelona Court of Appeal has issued a clear decision on jurisdiction clauses referring to the Court of a Member State of the UE. In this decision, the Court has stated that if the claimant is the shipper then the recast Brussels Regulation (1215/2012) prevails over the Spanish domestic law and therefore article 25 of the Recast Brussel Regulation cannot be superseded by article 468 of the LNM. Therefore, the validity of the jurisdiction clause cannot be examined under Spanish law but under the law of the Member state which Courts are mentioned in the submission clause. However, if the claimant is the holder of the bill of lading then the conveyance of this document of title is be studied under Spanish Law, in particular in the light of art 251 of the LNM ordering that the acquirer of the bill of lading shall acquire all the rights and actions of the conveyor to the goods, with the exception of jurisdiction and arbitration clauses, which shall require the consent of the acquirer. Pursuant to article 468 of the LNM the jurisdiction clause will only bind the holder of the bill of lading if it has been negotiated individually and separately by the holder when we acquired the document of title.
This decision of the Barcelona Court of Appeal dated 21 December 2016 revoked the first instance decision accepting the validity of a jurisdiction clause in the bill of lading in favour of the Courts of Marsella and found in favour of the Courts of Barcelona as the competent ones to deal with the claim of the holder of the bill of lading against the carrier.
Above mentioned decisions are clearing up the legal position in Spain in connection with the jurisdiction clauses and probably the practical consequence is that recovery claims in Spain will increase in the future for the satisfaction of the cargo sector. Time will tell us.
Luis de San Simón
International Maritime Law Seminar