This case concerned a foreign jurisdiction clause in a bill of lading in favour of London and the application of English law in connection with the carriage of blankets from Livorno, Italy, to Monrovia, Liberia. The carpets were sold by the Italian shipper, Copertificio Melani Giovanni (Copertificio) on C&F Monrovia terms to the Danish Red Cross, which was to use them there in connection with an emergency aid program.

The bill of lading, issued in Livorno on 26 June 2001 by the MSC Mediterranean Shipping Co, Geneva, Switzerland (MSC), contained the following provisions:

2. LAW AND JURISDICTION. Claims and disputes arising under or in connection with this Bill of Lading shall be referred to the High Court of Justice in London or such other place as the Carrier in his sole discretion shall designate. English law shall be applied, unless some other law is compulsory applicable …

18. LIABILITY OF SERVANTS AND SUB-CONTRACTORS. It is hereby expressly agreed that no servant or agent of the carrier, including any independent sub-contractor employed by the Carrier in any circumstance whatsoever be under any liability whatsoever to the Merchant for any loss or damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of, or in connection with his employment and without prejudice to the generality of the foregoing provisions in this clause, every exception, limitation, condition and liberty herein contained and every right, exception from liability, defence and immunity of whatever nature applicable to the Carrier or to which the Carrier is entitled hereunder shall also be available and shall extend to protect every such servant or agent of the Carrier (including any stevedore, terminal operator or any other independent contractor) acting as the aforesaid and for the purpose of the foregoing provisions of this clause the Carrier is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be his servant or agent (including all independent contractors as aforesaid) and all such persons shall to this extent be or be deemed to be party to this Bill of Lading.

The container was loaded onto the M/V MSC Mirella, and was later transhipped to the M/V Torm Alexandra, on which ship MSC had more than 30 container slots at its disposal according to a slot agreement with Torm Lines A/S Dampskibsselskabet Torm (Torm), which had time chartered the ship from its owner, Hansen & Lange I Malta Ltd (Hansen). The Torm Alexandra capsized on 25 July 2001 in the port of Monrovia before the goods were handed over to the Red Cross. The ship and its cargo were subjected to looting, during which the carpets disappeared. Tryg Forsikring (Tryg), as cargo insurer, was subrogated into the Red Cross' claim by paying out under the policy.

Tryg filed a claim that this case must be brought before the Maritime and Commercial High Court, and that Torm and Hansen, jointly or severally, must pay DKK 248,769.88. Torm and Hansen filed for inadmissibility on the basis of a lack of jurisdiction.

Tryg argued that there was no basis for dismissing the case. Tryg's claims against Torm were not based on the bill of lading, but on the general rules in ss 275 and 286 of the Maritime Act. An intermediate contracting carrier such as Torm was liable in the circumstances, and Torm was not covered by the bill of lading's jurisdiction clause. Hansen could be sued at the place of business in Denmark from which the shipping company operated: see s 238(1)(i) of the Administration of Justice Act; or in the alternative s 238(2), or s 246(1). As Danish law applied mandatorily pursuant to s 252(2)(i), (iv) and (v) of the Merchant Shipping Act, which broadly corresponds to art 21 of the Hamburg Rules, the jurisdiction clause in the bill of lading was invalid, and must be set aside.

Torm and Hansen were liable on a joint and several basis for Tryg's loss, as the loss occurred while the goods were in their custody: see ss 275 and 286 of the Maritime Act. Torm and Hansen had not proved that the loss and/or damage to the goods was not caused by fault or negligence on their part, nor had they demonstrated other limiting circumstances, such as why the capsizing took place or what measures were taken to protect the goods against looting, among other things.

The distribution of the limitation fund in Libya [see CMI1560] was not binding on Tryg, as it was contrary to art 9 of the LLMC 1976, and was against public order: see also s 178(5) of the Maritime Act, which corresponds to art 13.3 of the LLMC 1976.

Torm argued that the case must be rejected by the Danish courts, as Tryg's claim was based on a bill of lading which contained a valid venue and choice of law clause, and the case had no other connection to Denmark than that the Danish Red Cross was domiciled there. Tryg must make its claim in London, where the case must be decided according to English law. In the alternative, Torm was only an intermediate contractor and therefore could not be held liable. Only performing carriers were covered by the Maritime Act. Even if the Court considered Torm to be a performing carrier, the provisions of the bill of lading must also be applied to the legal relationship between Tryg and Torm: see the bill of lading's Himalaya clause, read in conjunction with the venue and choice of law clause.

Hansen argued that it was domiciled in Malta and therefore could not be sued in Denmark. Hansen's only connection to the case was that the company had time-chartered its ship to Torm, who was only the shipper in relation to the actual carrier, MSC, which also carried out the transport. The case had no relationship with Denmark. The jurisdiction clause in the bill of lading was quite clear, and it applied to all carriers, including intermediate contractors and performing carriers, and was valid according to the Lugano Convention.

Hansen had not issued independent bills of lading, and since Hansen in its time charterparty with Torm adopted London as venue, Hansen had a legitimate expectation that cargo damage claims would be settled in London under English law. On the other hand, Tryg did not have any legitimate expectation of being able to sue Torm and Hansen in Denmark. If the case was not dismissed, it was argued in the alternative that the damage to the goods was due to nautical error, for which there was a discharge of carrier liability: see 276(1)(i) of the Maritime Act, which corresponds to art 4.2.a of the Hague-Visby Rules.

Held: The case is dismissed.

The legal relationship between Tryg, on the one hand, and Torm and Hansen, on the other hand, must be determined on the basis of the bill of lading: see the Himalaya clause in cl 18 of the bill of lading, and s 286(1) of the Maritime Act, which provides that a 'sub-carrier who performs carriage by ship shall be liable for that part of the carriage he performs pursuant to the same provisions as the carrier. Sections 282 and 283 shall apply correspondingly.'

The case that Tryg has brought against Torm and Hansen is thus a 'dispute arising under or in connection with this Bill of Lading” as stated in cl 2 of the bill of lading, according to which the case must be decided by the High Court of Justice in London and under English law.

As neither the agreed place of loading nor the agreed or actual place of discharge is located in Denmark, Finland, Norway or Sweden, Danish law does not preclude this agreement on venue and choice of law: see ss 310(1)(v) and s 252(3) of the Maritime Act, which provides:

If neither the agreed port of loading nor the agreed or actual port of discharge are located in Denmark, Norway, Finland or Sweden, it may, however, be agreed that the contract of carriage by sea shall be governed by the legislation of a State Party.

It is hereby noted that the United Kingdom is a State Party within the meaning of the latter provision, in accordance with s 251(6) and (7) of the Maritime Act:

6) The Convention shall mean the International Convention on the Unification of Certain Rules of Law relating to Bills of Lading (Brussels 1924) as amended by the Protocols of 1968 and 1979.

7) State Party shall mean a state bound by the Convention.

[This judgment was appealed to the Supreme Court on 14 November 2005 (HR 467/05), and by the Supreme Court's ruling of 12 April 2007, the case was remanded back to the Maritime and Commercial High Court. See CMI1560 for the subsequent proceedings regarding the limitation fund constituted in Liberia.]