This case concerned the validity of a jurisdiction clause. The statement of claim related to the loss of a substantial portion of cargo carried pursuant to a contract of carriage evidenced by a bill of lading issued in Vancouver. According to the statement of claim, the shipment was 'carried and handled' by Great Tempo SA (the respondent), the carrier and owner of the ship, and Sinotrans Canada Inc (Sinotrans), its charterer and operator. The statement of claim alleged that the respondent's principal office was in Hong Kong. The bill of lading was signed by Sinotrans as 'agents only for Carrier: Trans Aspiration'. The jurisdiction clause provided that any disputes arising under the bill of lading would be decided in the country where the carrier had its principal place of business. The respondent moved for leave to file a conditional appearance to object to the Court's jurisdiction and for a stay of all proceedings against it. An affidavit in support indicated that 100% of the respondent's business was conducted from Hong Kong. In denying the respondent's motion for a stay, the Prothonotary found that the failure to identify the carrier was a fatal ambiguity. On appeal by the respondent, the motions Judge held that the Prothonotary's decision was wrong. The motions Judge found that there was evidence upon which the Court could determine where the respondent's principal place of business was. Proceedings should therefore be stayed. The appellant appealed to the Federal Court of Appeal.

Held: Appeal allowed. Stay of proceedings denied.

The jurisdiction clause should not be declared invalid as a matter of principle. There is no ambiguity in the clause. The identity of the carrier and the location of its principal place of business often do not appear expressly in bills of lading and are to be determined by the terms of the contract and the circumstances respectively. However, this lack of information never results in an uncertainty sufficient to invalidate bills of lading. If the application of the jurisdiction clause in certain circumstances gives rise to too much uncertainty, the relief is not to declare the clause invalid, but for the Court to exercise its discretion not to enforce it.

The Hamburg Convention has not been signed yet by Canada or by Great Britain nor ratified by such maritime powers as France, Germany and the United States of America. Furthermore, the Carriage of Goods by Water Act replaces the Rules relating to bills of lading set out in the Schedule to the Carriage of Goods by Water Act with the Hague-Visby Rules and, at a later date, should the Minister of Transport so decide, with the Hamburg Rules (s 8). It is therefore doubtful that there exists a consensus at the present time in the international community with regard to the jurisdiction provision found in the Hamburg Rules and this Court is not in any event prepared to pre-empt the will of the Government and of the Parliament of Canada.

The respondent has the burden of convincing the Court that the jurisdiction clause applies. The burden of proof is two-fold: the respondent must show that it is the carrier. It must then show where its principal place of business is. The motion should not be denied on the sole basis that there is no proof of the identity of the carrier. The terms of the bill of lading do not lead to the conclusion that Sinotrans had assumed the role of the carrier. In signing as 'agents only for Carrier: Trans Aspiration', Sinotrans left open the possibility that it was not acting as an agent for the shipowner, but as an agent for an unknown demise charterer. However, the identity of carrier clause in the bill of lading indicates in unequivocal terms that the bill of lading is intended to be a shipowners' bill of lading and that the contract evidenced by the bill of lading is one between the cargo owner and the vessel owner.

In circumstances where the charterer will be liable on the contract of carriage, the shipowner will not. A charterer will issue and sign a bill of lading either on its own behalf or on behalf of the master. Where it signs on behalf of the master and is so authorised, the shipowner will be bound by the issuance of the bills of lading, but not the charterer. Where the charterer issues and signs bills of lading on its own behalf, it will be bound by those bills. Consequently, in most cases, the word 'or' in art 1.a of the Hague Rules will mean exactly that. The carrier will either be the owner or the charterer, but not both.

The principal place of business is where the company's real business is carried on. The test is a demanding one. It imposes on the respondent an obligation to come forward with as much information as possible, even more so because such information is totally within its control and generally not available to the appellant. The respondent said nothing as to the location of the principal place of business, the names of the officers and where the control over the employees and the business is exercised. The jurisdiction clause is not applicable as the respondent failed to establish that its principal place of business is in Hong Kong.