WHITESEA SHIPPING AND TRADING CORPORATION V EL PASO RIO CLARA LTDA (THE "MARIELLE BOLTEN")

[2009] EWHC 2552 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Flaux, 21 October2009

Shipping - Anti-suit injunction - Charterparty (time) - Third parties - Himalaya contract - Himalaya contract a contract of carriage - Shipowners and third parties being sued in Brazil by cargo interests - Shipowners seeking anti-suit injunction restraining cargo interests in respect of all parties being sued in Brazil - Whether such an anti-suit injunction would result in blanket immunity for third parties performing carriage functions - Third parties subject to the contract of carriage not because they performed carriage functions but because they were deemed to be so by a clause therein - Hague Rules - The Starsin

The claimant owners and demise charterers of the vessel Marielle Bolten sought an anti-suit injunction to restrain the defendant cargo interests and subrogated cargo insurers from continuing with proceedings in Brazil against the claimants and certain third parties. The claimants were members of a pool pursuant to the terms of which a company representing the pool should appear as owners in any charterparty. A time charterparty had accordingly been made by the pool, with it as owner. The time charterer in turn subchartered the vessel which was in turn also time trip chartered. At Rio de Janeiro, four bills of lading governed by English law and containing English jurisdiction clauses were issued on behalf of the Master - thus being owners' bills - by the Brazilian agents of the claimants and the time charterer. By various means, the bills also incorporated the Hague Rules. The vessel grounded. Claimants argued a defence by virtue of article IV rule 2(c) or (a) of the Hague Rules but had declared general average with the adjustment issued on 30 June 2009. The present proceedings were issued against the defendants in May 2007 seeking general average and salvage charges and declarations in relation to liability, on the basis that as a matter of English law the defendants had no defence to claims for general average or salvage if the cause of the incident was perils of the sea or the fault of the Master. The defendants commenced proceedings in Brazil based on a statutory strict liability. The claimants contended before the High Court that each of the third parties sued in Brazil was their servant, agent or subcontractor within the definition of subcontractor in the bills of lading. The defendants were bound not to sue in Brazil contrary to the English jurisdiction clause in the bills of lading and the claimants had a sufficient practical interest to enforce that covenant (The Elbe Maru [1978] 1 Lloyd's Rep 206). The insurers in turn argued that this was contrary to article III rule 8 of the Hague Rules (rendering void any clause lessening the liability of the carrier) because it provided blanket immunity to third parties performing carriage obligations.Flaux J granted the anti-suit injunction. Applying the reasoning of Rix LJ in The Starsin [2001] 1 Lloyd's Rep 437 (CA), if there was a covenant not to sue, it inured only to the benefit of the carrier under the bill of lading and not third parties. It therefore did not fall foul of article III rule 8 of the Hague Rules. To the defendants' next contention, that the Himalaya contract to which the third parties were party was a contract of carriage for the purpose of the Hague Rules, the judge discerned the ratio of the majority in The Starsin [2003] 1 Lloyd's Rep 571 (HL) to be that the Himalaya contract was to be regarded as a contract of carriage within the meaning of the Hague Rules, not because the third party had performed carriage functions but because they were deemed to be parties to the bill of lading contract by a clause therein. The Starsin (HL) was not authority for the wide proposition contended by the defendants, namely that merely because the third party performed "carriage functions" it was to be regarded as a party to the contract of carriage governed by the Hague Rules. The third parties in question were time charterers, sub-time charterers, managers, and P&I insurers and therefore performed services incidental to the carriage of goods but not, as in The Starsin, the actual carriage of goods. The claimants had shown a sufficient practical interest, which was more than merely academic, in obtaining an injunction to restrain the defendant insurers from breaching the covenant not to sue. The threshold set by The Elbe Maru was not particularly high. The defendants' intention was clearly to attempt to consolidate the proceedings in Brazil, by at some future date seeking a stay in England. Further, an injunction would prevent that the claimants had to seek to expedite the English proceedings to arrive at judgment before the Brazilian litigation. Finally, the claimants' relationship with their P&I insurer might be adversely affected if no injunction was issued.