Atlantic Cement Carriers Ltd v Atlantic Towing Ltd and Ors (The "Atlantic Elm") - Fed Court (Trial Div)(Morneau P) - 9 July 2002

Exclusive jurisdiction clause - Whether action should be stayed

The plaintiff owner of the barge Portland Star entered into a contract on Towcon terms with the defendant for the towage of the barge by the defendant's tug Atlantic Elm. The Towcon agreement contained an exclusive jurisdiction clause providing for all disputes to be referred to the High Court in London. During the course of the tow the barge sank, and both the barge and the cargo it was carrying for a third party were lost. The plaintiff brought proceedings in Canada against the defendant. The owners of the cargo on board the barge brought arbitration proceedings in Canada against the plaintiff, and court proceedings in Canada against the defendant. In the present action the plaintiff claimed damages from the defendant for the loss of its barge, and also sought a declaration that the defendant should indemnify it for any damages it might have to pay to the cargo owners. Subsequently, the defendant brought proceedings against the plaintiff in England pursuant to the Towcon agreement.