El International Maritime Law Seminar ha publicado el Segundo número de su Newsletter, de carácter periódico, con la contribución de Diego de San Simón y su artículo “Validity of foreign jurisdictions clauses in Bs/L under Spanish Law«.
En esta ocasión, Diego de San Simón, analiza los pormenores de la validez, bajo Derecho español, de las cláusulas de jurisdicción contenidas en los conocimientos de embarque.
In September 2014, after a long parliamentary procedure, it came into force in Spain our “new” Navigation Act.
Almost all players of the Spanish Shipping sector cheers for this new law, which main object is to overcome the existing contradictions between the different international conventions in force in Spain and the disperse provisions governing the matter, and to give to Spain a modern maritime legal regime, suitable for the needs of today’s maritime transport.
However, as every good law, this Spanish Act contains some…let say “controversial” provisions, and what we may call it “hot topics” of the law.
One of this “hot topics” is the introduction of new rules on specialities of jurisdiction and competence by which the foreign jurisdiction and arbitration clauses set forth in Bills of Lading (among other contracts for use of the ship, or in ancillary navigation contracts), shall be null and void and considered not to be included, when these clauses 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.
Furthermore, these new rules has also declare the unenforceability of foreign jurisdiction and arbitration clauses against the acquirer of the bill of lading when the clause has not been consent directly by this third acquirer pursuant to the above terms, this is, when the clauses have not been negotiated individually and separately with the acquirer.
Finally, and as it could not be otherwise, these provisions rules without prejudice to the terms foreseen in the international conventions in force in Spain and the provisions of the European Union.
Trend of the Spanish Courts previous to the Maritime Navigation Act
Before the Spanish Navigation Act was enacted, the trend of the Spanish Courts had been to dismiss cargo claims brought by cargo owners 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 (Recast Brussels Regulation).
In this regards, the validity of jurisdiction clauses contained in bills of landing must be contemplated nowadays in the light of article 25 Recast Brussels Regulation, which is similar to article 23 of the Regulation 44/2001 and the previous Article 17 of the Brussels Convention of 1968.
Article 25 Recast Brussels Regulation does not contemplate all jurisdiction agreements, but only those in which (i) the parties confer jurisdictional power to a court in one of the contracting States for it to deal with the dispute, and (ii) when the dispute in question must be of an international nature.
Said article 25 establishes three different procedures for the jurisdictional attribution in favour of the courts of a certain EU country:
- The first procedure is performed in written or verbally with a written confirmation.
- The second involves a process in compliance with the habits which the parties have followed in previous transactions.
- Lastly, the third procedure, for international trade or commerce, in a form which accords with a usage of which the parties are aware or ought to have been aware and which in such trade or commerce is widely known to, and regularly observed by, parties to contracts of the type involved in the particular trade or commerce concerned.
The EU Court of Justice has discussed in several occasions the matter of the parties` consent of jurisdiction clauses in connection with letter c) of article 25. In 1997 de Court issued a very important decision for the case of Transporti Catelleti v Hugo Trumpy giving the following statements:
- The provision’s aim is still to ensure that there was real consent of the parties to the contract, by avoiding jurisdiction clauses incorporated in a contract by one party, going unnoticed.
- Letter c makes it possible to presume that such consent exists where commercial usages of which the parties are or ought to have been aware exist in this regard in the relevant branch of international trade or commerce
- Letter c) must be interpreted to mean that it is assumed that the contracting parties have given their consent to the jurisdiction clause when said parties’ behaviour corresponds to a usage which is typical in the realm of international trade in which they operate and which they are aware of or should be aware of.
Few years later, the Court issued another important decision confirming the above statements and maintaining that as far as the pleading against the third party holding the B/L is concerned, this can be done against the holder so long as, under the relevant national law, the holder of the bill of lading succeeds to the shipper’s rights and obligations (Tilly Russ, paragraph 24, Castelletti, paragraph 41, Coreck Maritime paragraph 23).
However, and back to Spain, this trend has caused that in some cases our Courts had simply limited themselves to follow the trend to dismiss cargo claims for lack of jurisdiction accepting certain jurisdiction clauses poorly drafted or clauses which are not clear enough without performing a real and strict analysis of the clause, or even accepting non-European Union jurisdiction clauses admitted in the light of the Brussels Convention applied by analogy.
Spain is an eminently shipper country where a majority of the imported/exported cargo is carried by foreign shipping companies. So, people may not be surprised 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 Navigation Act echoes the position of the cargo sectors.
Preamble of the navigation Act
In particular, this preamble says that Chapter I of Title IX contains what are known as specialities of jurisdiction and competence that, based of course 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.
These provisions have being subject to analysis and debate between the most outstanding doctrine of our maritime law, and which has two clear positions: The first position, those people who consider that the EU rules gives a limited but real margin of manoeuvre , and consider these national provisions as an opportunity for our Courts to declare themselves competent to hear disputes in Spain when the application is filed in Spain pursuant to the previously mentioned provisions (art. 468 and 251), together with article 469 which rules the criteria for attribution of competence, when the jurisdiction clause is considered not valid.
While there is a more critical sector of the doctrine that has come to call such a rule of “originality” and rather extravagant, with a very limited, if any, scope of applicability.
Up to date
Although it is true that we don’t have yet case law from our Supreme Court, several Courts of Appeal has already issued the first and important decisions in this matter since the Spanish Navigation Act was enacted, and which enable us to see what will be the new trend of the Spanish Courts.
In particular, the Valencia Court of Appeal has already issued four important decisions, and the Barcelona Court of Appeal one:
Both Courts of Appeal has pointed out in all these decisions that the examination of the submissions clauses is to be done on “a case – by – case – basis”. Though this is basic and sounds really obvious, we have seen that not all the Courts in the past had done such a strict analysis.
On the other hand, the Valencia Court of Appeal has specially declared the prevalence of the Recast Brussels Regulation over the national provisions, but at the same time has make it clear that this prevalence does not mean that always and in every case the incorporation of a foreign jurisdiction clause automatically defeats the Spanish Court’s jurisdiction to hear the case.
Decisions from of Courts of Appeal
The first three decisions issued by the Court of Appeal of Valencia refers to EU jurisdiction, and as we have previously mentioned, the jurisdiction clause has not been admitted in all the cases:
The first decision num. 1243 of 27 July 2016 did not admit the validity of the jurisdiction clause referring to the Courts of Naples because the Court of Appeal was not satisfied that there was an agreement between the parties given that although the jurisdiction clause was incorporated in the reverse side as clause 2, the clause was not expressly signed by the shipper, and the “acceptance and agreement” box of the front side includes a list of terms and conditions expressly accepted by the shipper but does not include such specific Jurisdiction clause 2, and finally the party challenging the jurisdiction clause, this is the shipper, having no experience in the industry was not aware of the usage of trade in relation to foreign jurisdiction clauses in bills of lading.
By contrast, the next two decisions, num. 1244 of 27 July 2016 and 1681 of 17 November 2016, issued by the Court of Appeal admitted the validity of the jurisdiction clause.
In both proceedings, the validity of the jurisdiction clause referring to the High Court of London was admitted due to the Court considered that there was an agreement between parties, based on two main facts:
First at all, the bs/l front side expressly indicates that the terms and conditions are published in the carrier’s website, and such terms and conditions includes the jurisdiction clause to the High Court of London.
And as second fact, the Court has considered that there is enough evidence of the ample experience of both parties in the industry and the prior course of dealing between them.
Few months later, the Barcelona Court of Appeal issued a very clear decision (decision num. 218 of 21 of December 2016) on jurisdiction clauses referring to the Court of a Member State of the UE. In this decision, the Court considered two different possible scenarios. The first scenario concerns to the shipper as the claimant party and as the party challenging the jurisdiction clause, while the second scenario deals with the third holder as the claimant party.
In the first scenario, 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 NA. 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, in the second scenario if the claimant is the third 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 Navigation Act 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 the terms stated in article 468, and 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 he acquired the document of title.
And finally, going back to Valencia Court of Appeal, last May the Court issued a new decision (decision num. 615 of 15 May 2017). This is particularly remarkable, since is the first case -since the Spanish Navigation Act came into force- in which our Courts examine a clause which extends the jurisdiction to a non-EU Member State Court, in particular to the Hong Kong Courts.
The Court of Appeal, after pointing out the order of preference of the International Conventions set force in Spain and the provisions of the European Union, has declared that contrary to the allegations taken by the defendant, nor the EU Provisions, nor the EU Court of Justice doctrine are applicable.
Therefore, and in the absence of an International Convention or Treaty on Jurisdiction between Spain and China, the jurisdiction clause is to be examined under Spanish Law, declaring that in this particular case, once analysed the clause, the Court has dismissed the validity of the jurisdiction clause to Hong Kong, since the content of the clause and the way it has been inserted to the Bill of Lading does not show enough evidence of the consent of the shipper by an individual and separate negotiation pursuant to article 468 NA, being the Courts of Valencia the competent to deal with the claim against the Forwarder.
There is still a lot of questions to the many and various scenarios to be answered by our Courts, however, the 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