In 1994, the plaintiffs' cargo was shipped on the defendants' vessel Bergen at Wilmington, USA, for carriage to Aberdeen, Scotland. The defendants' principal place of business was in Germany. The bills of lading covering carriage of the cargo incorporated the Hague Rules and a jurisdiction clause which provided:

Any dispute arising under this bill of lading shall be decided in the country where the carrier has his principal place of business, and the law of such country shall apply except as provided elsewhere herein.

During the voyage, carbon dioxide was used to fight a fire in a cargo hold. The vessel arrived off Falmouth, UK. General average was declared. The defendants engaged salvors to extinguish the fire and to escort and/or tow the vessel to Aberdeen. Some damaged cargo was discharged when the cargo was re-arranged. The vessel then proceeded to Aberdeen, where the remainder of the cargo was discharged. The plaintiffs were obliged to procure a general average bond and guarantee to obtain delivery of the cargo. The plaintiffs sued the defendants. The vessel was served and arrested in England. The plaintiffs alleged that the defendants breached the Hague Rules, arts 3.1 or 3.2, or both, causing loss and damage to the cargo and causing the plaintiffs to be liable to the salvors.

Relying upon the jurisdiction clause, the defendants argued that the proceedings should be set aside for want of jurisdiction under art 17 of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (the Brussels Convention) scheduled to the Civil Jurisdiction and Judgments Act 1982 (UK) (the 1982 Act). Article 17 of the Brussels Convention provides:

If the parties, one or more of whom is domiciled in a Contracting State have agreed that a court or the courts of a Contracting State are to have jurisdiction to settle any dispute which has arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have exclusive jurisdiction. …

Although the plaintiffs accepted that the criteria set out in art 17 of the Brussels Convention were satisfied, they denied that art 17 was applicable. They relied on art 57 of the Brussels Convention and art 7 of the Arrest Convention 1952. Article 57 of the Brussels Convention provides:

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.

2. With a view to its uniform interpretation, paragraph 1 shall be applied in the following manner: (a) this Convention shall not prevent a court of a Contracting State which is a party to a convention on a particular matter from assuming jurisdiction in accordance with that Convention, even where the defendant is domiciled in another Contracting State which is not a party to that Convention. The court hearing the action shall, in any event, apply Article 20 of this Convention.  ...

Article 7 of the Arrest Convention 1952 provides:

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 gives jurisdiction to such Courts …

2. If the Court within whose jurisdiction the ship was arrested has no 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. …

The plaintiffs argued that art 17 of the Brussels Convention, where applicable, effectively deprived the Court of jurisdiction in accordance with its domestic law. If so applied, this deprived the plaintiffs of their right to have their claims determined on the merits under art 7 of the Arrest Convention 1952 in accordance with English domestic law when that right was expressly preserved by art 57 of the Brussels Convention.

The defendants argued:

1. The Arrest Convention 1952 does not displace the Brussels Convention. They are to be read together.

2. Article 57 of the Brussels Convention precludes the application of the provisions of that Convention solely in relation to those matters governed by the Arrest Convention: The Maciej Rataj [1995] 1 Lloyd's Rep 302 [25](ECJ) (CMI771).

3. The Arrest Convention 1952, in so far as it has been incorporated into English law, makes no provision for what is to occur when the parties to a maritime claim in which jurisdiction has been founded by arrest have agreed to submit their claims to the jurisdiction of another Court, just as, eg, it makes no provision for what is to occur in cases of lis alibi pendens.

4. Further or alternatively, art 17 does not affect the plaintiffs' right to found merits jurisdiction by arrest. The operation of art 17 is not triggered unless and until it is invoked by a defendant who invites the Court to give effect to the jurisdiction clause (cf arts 16 and 19 of the Brussels Convention).

The parties accepted that the Arrest Convention 1952 is one of the Conventions referred to in art 57: The Anna H [1995] 1 Lloyd's Rep 11, 17 (CA) (CMI2267). It was also common ground that under English domestic law this Court had jurisdiction to hear and determine the plaintiffs' claims under s 20(2) of the Supreme Court Act 1981 (UK) (the 1981 Act) and that they were entitled to bring the actions in rem under s 21(4) of the 1981 Act.

Separately, the defendants argued that proceedings should be stayed under the Court's inherent jurisdiction to have the plaintiffs comply with the jurisdiction clause.

Held: Application dismissed.

The Court retains jurisdiction by reason of art 7 of the Arrest Convention. Whether it should exercise that jurisdiction or stay the action remains to be seen.

Under the jurisdiction clause, the parties agreed that any dispute arising under the bills of lading would be decided in Germany under German law. Nevertheless, under English domestic law the Court retains jurisdiction. The Court has a discretion on whether to stay the proceedings. The Court will stay proceedings unless strong cause against such a stay is shown: The El Amria [1981] 2 Lloyd's Rep 119 (CA). The issues of whether the plaintiffs can show strong cause or whether The El Amria should no longer be followed are adjourned for future decision.

The Court declined to hold that it had no jurisdiction by reason of art 17 of the Brussels Convention. Article 17 has no application to the facts of this case. Nevertheless, due to the jurisdiction clause, the practical outcome is likely to be the same for most cases because English domestic law points towards the same result reached by applying art 17.

Article 57 of the Brussels Convention preserves art 7 of the Arrest Convention. Article 7 confers jurisdiction on the courts of the State in which the arrest was made to determine the case upon its merits and in accordance with the domestic law of that State. The vessel was properly served and arrested in England. Thus, English domestic law is relevant.

The Court has jurisdiction on the merits under arts 2 and 7 of the Arrest Convention because English domestic law gives the Court jurisdiction under ss 20(2) and 20(4) of the 1981 Act. The Court nevertheless retains a discretion as to whether to stay proceedings. '[S]pecial provision is made in the special Convention' so that the Arrest Convention 1952 'shall govern': The Anna H (CA) 18.

The plaintiffs are correct in arguing that there is a conflict between art 17 of the Brussels Convention and art 7 of the Arrest Convention, and that art 7 prevails. The jurisdiction provisions of the Arrest Convention must prevail. If art 17 applied, it would deprive the Court of original jurisdiction and the Court would be bound to hold that it has no jurisdiction at all: Continental Bank NA v Aeakos Compania Naviera SA [1994] 1 WLR 588, 596-597 (CA); Report by Professor Dr Peter Schlosser on the Convention of 9 October 1978 on the Association of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and to the Protocol on its interpretation by the Court of Justice [1979] OJ C59/71 para 22. In that event, the Court would not be applying English domestic law in accordance with art 7 of the Arrest Convention. This is expressly prohibited by art 57.2 of the Brussels Convention. The Court's conclusion is supported by Continental Bank; The Anna H [1994] 1 Lloyd's Rep 287 (CMI2266); The Anna H (CA). This conclusion is not inconsistent with The Maciej Rataj. The Maciej Rataj was concerned with a different situation where two different Courts had jurisdiction and the question was which Court should exercise it. That case involved lis pendens and was not about original jurisdiction. The Court thus accepted the plaintiffs' argument that these were distinct situations: The Nordglimt [1988] QB 183, 202-203.

The Brussels Convention is to be construed in such a way that 'the full Admiralty jurisdiction in rem of the English Courts is to continue': The Anna H (CA) 21. The expression 'domestic law' in art 7 of the Arrest Convention means the domestic law 'unaffected by any alterations effected by the other provisions of the 1968 Convention': The Anna H (HC) 294.