On 12 April 2011, a cargo of 'coal in bulk', consigned to a Moroccan state electricity generating company, Office National De L’Electricite (first defendant), was observed to have been self-heating on board the Channel Ranger berthed at the discharge port of Nador, Morocco. The self-heating of the cargo in three of the vessel’s holds worsened over the next few days. Because of a lack of fresh water, salt water was used to douse the cargo in these holds, causing contamination and rendering the coal unusable for industrial boilers for the production of electricity. The Marshall Islands shipowner, Caresse Navigation Ltd (claimant), brought proceedings against the first defendant as receiver of the cargo and the insurers of the cargo (second defendant) claiming non-liability for contamination of the coal cargo by sodium chloride.

The claimant had concluded a time charterparty on an amended NYPE form dated 23 March 2011 (time charter) with U-Sea Bulk A/S (U-Sea) for the carriage of the cargo. U-Sea concluded the time charter in order to perform one of three shipments, which it had agreed to perform under a voyage charterparty contract with Glencore International AG (shipper) dated 6 January 2011 (voyage charter) in the form of email fixture recap with no formal charterparty concluded but with an attached pro forma AmWelsh Form 1979 dated 14 January 2009. A bill of lading on Congenbill 1994 form was issued pursuant to the voyage charter. There was uncertainty as to whether the English court was the appropriate forum to hear the dispute. Clause 5 of the voyage charter submits disputes arising out of or in connection with the voyage charter to the 'exclusive jurisdiction of the High Court of Justice of England and Wales'. However, both the front of the bill of lading and the conditions of carriage on its reverse appear to have incorporated the 'law and arbitration clause'.

The claimant served notice of proceedings out of the jurisdiction on the second defendant in February 2013 and on the first defendant the following month. On 28 March 2013 the second defendant, exercising rights of suit under Moroccan law, commenced proceedings in the Commercial Court in Casablanca against the master as representative of owners (on the basis that cargo was damaged on outturn) and the port operating company. In response to the claimant's service of proceedings, the defendants challenged the English court's jurisdiction. The claimants further applied for an anti-suit injunction to restrain pursuit of the Moroccan proceedings on the ground that they breached the exclusive jurisdiction clause in the charterparty which they said was incorporated into the bill of lading.

The discretionary power under CPR 6.36 and 6.37 to grant permission to serve a claim form out of jurisdiction can only be exercised when the claimant convinces the court that (i) the claimant has a good arguable case that the claim comes within one or more of the jurisdictional gateways set out in CPR PD 6B para 3.1; (ii) the claim has a reasonable prospect of success on the merits; and (iii) the court is satisfied that England and Wales is the proper place in which to bring the claim.

Held: Defendants’ challenge to the jurisdiction of the English courts dismissed.

There was at least a good arguable case that general words of incorporation are sufficient to incorporate a proper law clause and accordingly that the bill of lading was governed by English law. As for jurisdiction, the bill of lading provided for exclusive English jurisdiction. The words 'law and arbitration clause' in the bill of lading should be construed to refer to the only ancillary clause in the charterparty which is the jurisdiction clause. This is a more natural construction of the clause than to read it as referring to an arbitration clause in the charterparty 'if any'.

As for the exercise of the court’s discretion to allow service out of the jurisdiction of a claim for a negative declaration, which requires the court to be satisfied that a solid practical benefit will ensue, the Judge held that the proceedings serve a practical purpose by, inter alia, assisting the owners to resist enforcement in a third country.

Notably, on whether England and Wales was the proper place to bring the claim, the risk of a less favourable legal regime in Morocco was a decisive factor for the Judge in deciding that England was the appropriate forum. The judge noted that Morocco and England apply different carriage of goods by sea Conventions. Morocco applies the Hamburg Rules while England applies the Hague-Visby Rules. While the special rules on dangerous goods in both Conventions are substantially similar (ie art 13 of the Hamburg Rules and art 4.6 of the Hague-Visby Rules), the Judge considered that it would be difficult to foresee how the litigation will develop from an early stage and the precise nature of the issues which may arise. This was especially so considering that the Hamburg Rules are much more favourable to cargo interests.