NATIONAL NAVIGATION CO V ENDESA GENERACION SA

[2009] EWHC 196 (Comm), Queen’s Bench Division, Commercial Court, Mrs Justice Gloster 1 April 2009

Arbitration – Spanish court ruling that charterparty arbitration clause not incorporated into bill of lading – Proceedings brought in England for declaration that arbitration clause binding – Whether English court possessed jurisdiction to grant declaration – Recognition of Spanish judgment – Whether discretion should be exercised – Whether arbitration clause incorporated – Whether arbitration clause incorporated – Council Regulation (EC) No 44/2001, articles 1(2)(d), 5, 21, 27, 33 and 34

NNC owned the vessel Wadi Sudr, which was time chartered to Sinochart and then sub-chartered under a voyage charter to Carboex. Both contracts were governed by English law and contained arbitration clauses. Carboex agreed to supply coal to a Spanish company, Endesa. The bill of lading issued to Endesa stated that it incorporated the arbitration clause in the charterparty. The vessel was damaged en route, and Endesa had to obtain an alternative supply of coal. Endesa commenced proceedings in Spain against NNC, and shortly afterwards NNC commenced proceedings against Endesa in England, seeking negative declaratory relief. The Spanish court ruled that there was no arbitration agreement or, if there was, that it had been repudiated by the commencement of English substantive proceedings. Thereafter NNC sought a declaration to the effect that there was a binding arbitration clause. Gloster J held that a declaration should be granted. (1) The decision of the European Court of Justice in Allianz SpA v West Tankers Inc, The Front Comor 10 February 2009, which precluded the grant of an anti-suit injunction in support of an arbitration clause, did not preclude the grant of declaratory relief. (2) The decision of the Spanish court was not to be recognised in England, either because: (a) the obligation to recognise an EU judgment in article 33 of the Brussels Regulation did not apply where the English proceedings were outside the Brussels Regulation in that they related purely to arbitration; or (b) the Spanish judgment contravened public policy and need not be recognised by reason of article 34(1) of the Brussels Regulation. (3) The effect of the bill of lading was, as a matter of English law, to incorporate the arbitration clause in the voyage charterparty. (4) Merely by commencing proceedings for negative declaratory relief on the substance of the dispute, NNC had not repudiated the arbitration clause. (5) There was no reason to refuse to grant the relief sought.