Privity of contract

Privity of contract restricts the shipowner from relying on a jurisdiction or arbitration clause contained in a B/L that it did not negotiate. An agent’s authority in continental legal systems like Spain requires a ‘reasonable test' present in national civil codes and resembles case law in common law jurisdictions. It must be stressed that any inconsistency or manipulation of

B/L clauses intended to reduce the carrier's liability is forbidden under Article III.8 of the Hague-Visby Rules, and this includes jurisdiction or arbitration clauses. The correct incorporation of the dispute resolution clause in a B/L and its validity is subject to national law or Article 25 of the Brussels I Regulation (recast) in cases of submission to an EU Member State court. In the case of Article 468 SAMN, the individualisation and separate negotiation requirements collide with the international practices of the shipping sector. However, it is debatable whether Article 468 operates in conjunction with Article 251 SAMN in light of Article 22 bis (2) and ter (4) SOLJ, when the parties select a non-EU state court.

Forum shopping, irreconcilable judgments and lis alibi pendens

Procedural unification is needed for the arrest of ships to avoid ‘forum shopping’, irreconcilable judgments and lis alibi pendens. An analysis of how the arrest of the ship can frustrate the jurisdiction or arbitration agreement of the parties reveals a lack of international substantive legal harmonisation in choice of court or arbitration clauses, as discussed in Chapter 5. The court can stay proceedings in common law jurisdictions, if a jurisdiction clause affects third-party rights, by applying the forum non conveniens doctrine, through Article 7(2) of the 1952 Arrest Convention. Forum non conveniens does not apply to arbitration clauses as the UK and Spain are bound by the New York Convention. English courts are obliged to stay unless the arbitration agreement is null and void (s 9 UKAA). There is no discretion. There is also no question of forum non conveniens if the parties have chosen the court of an EU Member State, as Article 25 of the Brussels I Regulation (recast) does not permit any discretion. The English court will have a discretion if the parties have chosen the court of a non-EU and non-Lugano contracting state but will stay its proceedings in favour of the court chosen unless there is strong cause not to do so.

‘Forum shopping’ operates with more efficiency in the 1999 Arrest Convention by allowing the proactive forum shopper to choose a forum clause written in the contract. However, any change of the company name before the claimant applies for the arrest allows the defendant to avoid the arrest of the vessel. The 1999 Arrest Convention restricts the reactive foium shopper that aims to chase the debtor’s ship in any port in the world where the claimant is confident of recovery. Article 7(1) of the 1999 Arrest Convention allows an arrest in the jurisdiction where the ship is located, enhancing party autonomy by allowing the dispute on the merits of the case where agreed by the parties according to the dispute resolution clause. Article 7(5) of the 1999 Arrest Convention provides for the enforcement of the judgment on the merits where the ship is arrested. The 1952 Convention (and, doubtfully, the 1999 Arrest Convention) on jurisdiction for arrest by virtue of Article 71 of the Brussels I Regulation (recast) allows the avoidance of the lis alibi pendens rules of the Regulation when granting an order for arrest of a vessel located in a non-EU state. Moreover, a Member State court has discretion to order such arrest of a vessel outside the EU or, conversely, to recognise an order for arrest of a vessel inside its territory by a non-EU state if bilateral or multilateral treaties are applicable.

Restrictions on jurisdiction and arbitration clauses

Jurisdiction and arbitration clauses are subject to restrictions imposed by the law of the court or arbitral tribunal that first hears the case. Parties can exclude certain foreign rules by agreement within the limitations prescribed by Articles 3(3) and 3(4) of the Rome I Regulation. Article 21 of the Rome I Regulation restricts the application of foreign law provisions that are incompatible with the public policy of the forum. Public policy does not apply to jurisdiction agreements in favour of EU Member State courts under Article 45(3) of the Brussels I Regulation (recast).

The recognition of arbitration clauses has been effectively and consistently delivered through the application of the New York Convention. However, the restrictions on party autonomy that may arise when a cargo claimant initiates judicial proceedings in breach of an arbitration agreement pose challenges. The judge ex officio or the defendant will have to raise their concerns and request the enforcement of the valid arbitration clause. Such clause may be contained in the charterparty or be incorporated into the B/L.

The rights of the parties enshrined in Article VII of the New York Convention restrict the applicability of Articles 468 and 251 SAMN. The ‘public order exception’ to refuse the recognition and enforcement of an arbitration agreement lacks an international homogeneous interpretation. The ‘public order exception’ of Article V(2)(b) of the New York Convention has not resulted in a uniform concept of public policy. The interpretation, whether international or domestic, varies from country to country. English courts have not defined the concept of public policy, but the core values of the English legal system reflect a pragmatic, case-by-case approach, based on laws, statutes and case law referring to constitutional matters. By contrast, Spain has consistently relied on a restrictive concept of public policy relying on judicial control based on the domestic and international principles of the applicable legal regimes.