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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Marodi Service di D. Mialich & C.s.a.s. v. Mikkal Myklesbusthaug Rederi AS [2002] ScotCS 111 (18th April, 2002) URL: http://www.bailii.org/scot/cases/ScotCS/2002/111.html Cite as: [2002] ScotCS 111

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Marodi Service di D. Mialich & C.s.a.s. v. Mikkal Myklesbusthaug Rederi AS [2002] ScotCS 111 (18th April, 2002)

OUTER HOUSE, COURT OF SESSION
	OPINION OF T. G. COUTTS. Q.C. Sitting as a Temporary Judge in the cause MARODI SERVICE di D. MIALICH & C.s.a.s. Pursuers; against MIKKAL MYKLEBUSTHAUG REDERI AS Defenders:   ________________

 

 

Pursuers: Weir; Henderson Boyd Jackson, W.S.

Defenders: Sandison; Maclay Murray & Spens

18 April 2002

1. In this action of payment the pursuers are an Italian company suing a Norwegian company who are the owners of a vessel flying the Panamanian flag. They sue in respect of bunker fuel obtained by the Cypriot charterers of the vessel at two locations, namely in Turkey and in Sicily. The pursuers established jurisdiction against the defenders by arrestment of the vessel ad fundandam jurisdictionem at Aberdeen. Defences were lodged to the action; the jurisdiction of the Scottish court was admitted, but in the course of adjustment, the pursuers tabled a plea in law, which they amended at debate, in the following terms:

"ante omnia the action should be sisted pending determination of the parties' dispute by the Italian courts".

The cause appeared in procedure roll for consideration of the said plea.

2. The pursuers allege that there was a contract between them and the defenders which governed the said supplies. The existence of such a contract is denied and intimation to the defenders of any terms and conditions which might have applied to such a contract is not admitted. It is admitted that the vessel received bunkers at Turkey and Sicily but it is claimed that the delivery note expressly states "only for charter account". The defenders maintain that it was the charterers who contracted with the pursuers. Accordingly it is clear that almost the whole basis upon which the pursuers sue, both on fact and on liability, is challenged by the defenders and will require to be resolved.
3. Counsel for the pursuer in arguing for a sist made it plain that he was making an unusual request in unusual circumstances. He was unable to point to any precedent directly in point for the course he proposed. He sought to draw an analogy from the provisions of the Brussels Convention of 1952 which specifically envisage arrestment of a vessel which lying within the jurisdiction of one country where a claim is litigated in a different country. The arrestment of the vessel is a real diligence directed against the vessel herself for the purpose of securing the pursuers' claim. It was, he said, more appropriate that the resolution of the dispute between the parties be determined in the courts of Italy since by convention terms the existence of a contract, and therefore, the application of its terms and conditions, falls to be determined according to Italian law, as the law of the putative contract (Article 8, Rome Convention).
4. For the defenders, counsel summarised his contentions as follows. Firstly, having raised a full-blown action in the Scottish courts the pursuers have ceased to have any right to raise another action; secondly, so long as the present action is in dependence, there is no right in any other court to hear the case having regard to both the Brussels and Lugano Conventions; thirdly, that in any event if there is available another competent court, is not clear that the law of Italy will apply and there is not any preponderance of circumstances which makes Italy more suitable than Scotland to try the issue between the parties and, finally, that by pursuing the course of raising the action in Scotland the pursuers have waived any right to raise it elsewhere while the present action remains before the Scottish court.
5. The law which applies to the present circumstances is governed by rules of international convention to which Italy, Norway and the United Kingdom are parties.

Applicable Legislation

6. It is convenient, since both parties referred to them at length, to note the legislation and conventions applicable to a dispute like the present. One may start from the position that arrestment of a ship to found jurisdiction or the arrestment of a ship in rem was part of the common law of Scotland, unaffected by the Brussels Convention, a matter discussed by Lord Prosser in Ladgroup Ltd. v Euro East Lines S.A. 1997 S.L.T. 916.
7. The Arrest Convention of 1952 provides inter alia:

"Article 3

(3) A ship shall not be arrested, nor shall bail or other security be given more than once in any one or more of the jurisdictions of any of the Contracting States in respect of the same maritime claim by the same claimant; and, if a ship has been arrested in any one of such jurisdictions, or bail or other security has been given in such jurisdiction either to release the ship or to avoid a threatened arrest, any subsequent arrest of the ship or of any ship in the same ownership by the same claimant for the same maritime claim shall be set aside, and the ship released by the Court or other appropriate judicial authority of that State, unless the claimant can satisfy the Court or other appropriate judicial authority that the bail or other security had been finally released before the subsequent arrest or that there is other good cause for maintaining that arrest."

and

"Article 7

(1) The Courts of the country in which the arrest was made shall have jurisdiction to determine the case upon its merits:

- if the domestic law of the country in which the arrest is made give jurisdiction to such Courts;

...

(2) If the Court within whose jurisdiction the ship was arrested has not jurisdiction to decide upon the merits, the bail or other security given in accordance with Article 5 to procure the release of the ship shall specifically provide that it is given as security for the satisfaction of any judgment which may eventually be pronounced by a Court having jurisdiction so to decide; and the Court or other appropriate judicial authority of the country in which the arrest is made shall fix the time within which the claimant shall bring an action before a Court having such jurisdiction

(3) If the parties have agreed to submit the dispute to the jurisdiction of a particular Court other than that within whose jurisdiction the arrest was made or to arbitration, the Court or other appropriate judicial authority within whose jurisdiction the arrest was made may fix the time within which the claimant shall bring proceedings."

8. The Civil Jurisdiction & Judgments Act 1982 incorporates and sets out in Schedule 1 the Brussels Convention. The Lugano Convention is also incorporated into Scots law. Although the United Kingdom and Italy are signatories to both, Norway is only a signatory to the Lugano Convention. The provisions which apply to the present matter are identical in both. These are Article 18, Article 21, Article 22 and Article 57:

"Article 18

Apart from jurisdiction derived from other provisions of this Convention, a court of a Contracting State before whom a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered solely to contest the jurisdiction, or where another court has exclusive jurisdiction by virtue of Article 16."

"Article 21

Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Contracting States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court."

"Article 22

Where related actions are brought in the courts of different Contracting States, any court other than the court first seised may, while the actions are pending at first instance, stay its proceedings.

A court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the law of that court permits the consolidation of related actions and the court first seised has jurisdiction over both actions.

For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."

"Article 57

1. This Convention shall not affect any conventions to which the Contracting States are or will be parties and which, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments."

Reference was also made to the Rome Convention. The Contracts (Applicable Law) Act 1990 enacts that the Rome Convention shall have force of law. It is there provided:

"Article 8

Material Validity

1. The existence and validity of a contract, or of any term of a contract, shall be determined by the law which would govern it under this Convention if the contract or term were valid.

2. Nevertheless a party may rely upon the law of the country in which he has his habitual residence to establish that he did not consent if it appears from the circumstances that it would not be reasonable to determine the effect of his conduct in accordance with the law specified in the preceding paragraph."

"Article 15

Exclusion of renvoi

The application of the law of any country specified by this Convention means the application of the rules of law in force in that country other than its rules of private international law."

The Submission for the Pursuers

9. The court is entitled to look at the averments and consider whether this claim, where it is asserted there was agreement and that is denied, should proceed in Scotland when the defender disputes the existence of the agreement that requires to be resolved. That requires to be resolved by the application of Article 8 of the Rome Convention and it would be proper to sist to enable the proper jurisdiction, that of Italy, to determine the matter. Although the pleadings in the case would indicate that there might be a renvoi situation since Italian law says that the current dispute would be governed by the law of the flag, that did not apply to a decision about the existence of the contract. The substantial litigation would be in Italy since there would be reference to Italian law. The court may, by section 49 of the Civil Jurisdiction Act, sist a case and since there is no inconsistency with any of the Conventions, it is an option which is open to the pursuers to have the case sisted to determine the case elsewhere.
10. The matter is akin to a plea of forum non conveniens where the principles to be applied require compelling reasons for ordering that a case be heard elsewhere. The present case has no connection with Scotland other than the fact that there was an arrestment to found jurisdiction there. The defenders are Norwegian, the pursuers are Italian, the supplies were either one supply or a supply in Italy and a supply in Turkey. There are no connecting features with Scotland. See for the appropriate principles Credit Chemiquie v James Scott Engineering Group Ltd. 1979 S.C. 406 and Spiliada Maritime Corp. v Ansulex Ltd. 1987 1 A.C. 460.
11. With regard to the defender' plea invoking waiver, there are no averments of the quality envisaged by Lord Fraser in Armia Ltd. v Daejan Developments Ltd. 1979 SC (HL) 56. The pursuers could not be said to have abandoned any right they may have to sist the action.

Argued for the Defenders

12. No dispute arises about the jurisdiction of the Scottish court. The pursuers have invoked that jurisdiction and the defenders do not contest it. None of the cases in which forum non conveniens was discussed were cases in which the pursuer sought to change his forum. Because of the terms of the Convention, any court before whom this dispute was raised, be it Italian or Norwegian, would be bound to stay its proceedings in order that the matter be determined by the court first seized of the jurisdiction. Scotland was the court first seized of the jurisdiction and cannot in terms of the Conventions be supplanted, unless by agreement. The defenders did not enter appearance in order to contest jurisdiction, as envisaged by Article 18. The pursuers could, if they wished, have raised their action in Italy and they would have had the facility to arrest in security in any of the other Convention States under Article 24. They did not do so and the effect of the pursuers' present motion is to invite the court to assume that they did. The E.C.J. case of The Tatry 1999 QB 515 contains in the Advocate General's opinion at 521 the following view:

"Once the plaintiff chooses a court by instituting proceedings for the arrest of a vessel, the court before which the same action is again brought later must do no more than simply dismiss it on the ground that the same proceedings have already been commenced elsewhere."

The court held that Article 57 of the Brussels Convention specifically subordinated that Convention to existing rules.

13. With regard to the present case the pursuers had had a free choice. The pursuers' proposal conflicts with the provisions of the Convention and there is no other tribunal having competent jurisdiction which could more suitably be invoked for the interests of all the parties and for the ends of justice - following Lord Kinnear in Sim v Robinow 19 R. 665 at 668.
14. By invoking the jurisdiction of the Scottish court in the way that has occurred, the pursuers have waived any right to say that the forum they have chosen is inconvenient. The defenders have entered appearance and lodged defences to the action in which the Record has now closed.

Decision

15. The pursuers' motion is refused. The telling circumstance in the present case is that the pursuers had invoked the jurisdiction of the Scottish court and have litigated in Scotland to the Closed Record stage. That jurisdiction is not challenged by the defender and the defender does not assert that his case could be more conveniently dealt with elsewhere. In these circumstances it would take some extraordinary feature to entitle the court against the wishes of the defender to permit the pursuer to forum-shop having secured his jurisdiction and his arrestment. No doubt it might be convenient for the pursuers to litigate in Italy, particularly if the result of that would be that the law of the flag would apply to the merits and that means as I understood counsel that the owners of the ship was primarily responsible for the contract of the charterer. But that was a matter which the pursuers should have considered when raising their action. The present proposal by the pursuers that the court sist pending the raising of some other action could be described as opportunistic. If the pursuers wish to litigate in Italy they can abandon the action here and raise an action there. If however they wish to retain the benefit of the arrestment and jurisdiction they have invoked, they must proceed with the case as it stands with any inconvenience that that may cause them. Whether it is any more inconvenient for Norwegian defenders to litigate in Italy about a contract than it would be to litigate in Scotland about the same contract does not require to be considered. Foreign law is a matter of evidence in any forum.
16. I agree with the submission made for the defenders that so long as the present action remains before the Scottish court, no other action can be raised elsewhere since in terms of the Convention such an action would require to be dismissed. That has in my view been made absolutely plain by the E.J.C. in Tatry.
17. The course proposed by the pursuers would fly in the face of the rules and the Conventions. Nor was I persuaded that the suggested convenience of litigating elsewhere would have been sufficiently compelling for the court to sist the action, even if it were appropriate for the pursuer to suggest that course, when the defender opposes it. Finally, I would have considered in the present case that the actings of the pursuers and those of the defenders as a consequence thereof amounted to waiver of any right to suggest that the cause should be sisted for the purposes of litigating elsewhere. I consider that by raising the action and pursuing it to the stage of a Closed Record the pursuers have lost any entitlement to a sist. The analogy of an action being raised and then sisted for arbitration where the contract between the parties contains an arbitration clause was canvassed but matters are entirely different in that example. The original court retains ultimate control of the proceedings. In this case the original court would lose any opportunity of supervision.
18. Parties were agreed that should the application to sist fail, the appropriate course would be to allow a proof before answer and I shall accordingly repel the pursuers' first plea-in-law, sustain the defenders' first plea-in-law and allow a proof before answer.