Perspectives for a new specialised convention on maritime matters
Certain norms are used for subjective characterisation of the carriage of goods by sea to show that it is inherently international. Substantive or material party autonomy in agreements concerning maritime carriers and other relevant actors in the carriage of goods by sea is necessary in order to achieve international harmonisation. Ideally, global leaders among maritime states should agree on a new independent and specialised convention on jurisdiction and the recognition and enforcement of judgments in maritime matters. The proposed instrument could be negotiated under the auspices of the UNCTAD, the CMI or the Hague Conference on Private International Law.
Inspiration to propose a new international instrument comes from examining the Hague Choice of Court Convention. The convention contains exclusions and specific ad hoc limitations in its scope of application, based on the objectives of the convention, which do not conflict with practice in the maritime sector. In contrast, other sectors include protective dimensions (e.g., consumers’ rights or insurance) in relation to the scope of party autonomy. The main problem with the Hague Choice of Court Convention is that its scope of application does not cover certain maritime matters: it does not apply to the carriage of goods by sea, the limitation of liability for maritime claims and voyage charterparties. The Hague Choice of Court Convention is only applicable to exclusive and, not asymmetric, choice of court agreements as set out by Article 3(a):
“Exclusive choice of court agreement” means an agreement concluded by two or more parties that meets the requirements of paragraph (c) and designates, for the purpose of deciding disputes which have arisen or may arise in connection with a particular legal relationship, the courts of one Contracting State or one or more specific courts of one Contracting State to the exclusion of the jurisdiction of any other courts.
It requires that the choice of court agreement must be ‘concluded or documented’ ‘in writing' or ‘by any other means of communication which renders information accessible so as to be usable for subsequent reference’.
The jurisdiction of the chosen court under Article 5(1) of the Hague Choice of Court Convention must be exercised by ‘the court or courts of a Contracting State designated in an exclusive choice of court agreement... unless the agreement is null and void under the law of that State’. The designated court of a contracting state cannot decline jurisdiction to hear the case, according to Article 5(2). Consequently, the court not chosen in an exclusive jurisdiction agreement ‘shall suspend or dismiss proceedings to which an exclusive choice of court agreement applies’ (Article 6). The grounds for ignoring such compelling obligations under Article 6 are that:
- (a) The agreement is null and void under the law of the State of the chosen court;
- (b) A party lacked the capacity to conclude the agreement under the law of the State of the court seised;
- (c) Giving effect to the agreement would lead to a manifest injustice or would be manifestly contrary to the public policy of the State of the court seised;
- (d) For exceptional reasons beyond the control of the parties, the agreement cannot reasonably be performed; or
- (e) The chosen court has decided not to hear the case.
The new international convention should also include a lis alibi pendens rale that precludes the enforcement of judgments by EU and non-EU courts that do not give effect to arbitration agreements agreed by the litigants between the parties. The Brussels I Regulation (recast) does not provide for such mechanism. The Wadi Sndr is an example of lis alibi pendens between English and Spanish courts where the latter judged the substance of the claim, disregarding a London arbitration clause. The CJEU in The Front Conior banned anti-suit injunctions restraining a party from starting proceedings in the EU. However, the parties could pursue litigation in non-EU state courts. An anti-suit injunction issued by an arbitral tribunal was held valid by the CJEU in Gazprom since it was out of the scope of the Brussels I Regulation (recast). This is because EU courts are not allowed to assess the validity of arbitration clauses, according to Recital 12 of the Brussels I Regulation (recast). The New York Convention has precedence over the Brussels I Regulation (recast).
The new convention on jurisdiction and the recognition and enforcement of judgments in maritime matters should apply to voyage charterparties and B/Ls, as well as to time and bareboat charters. Such convention would include an article conferring jurisdiction in maritime disputes (including cargo claims) in similar terms to Article 25 of the Brussels I Regulation (recast) and Article 3 of the Hague Choice of Court Convention. Overcoming the lack of a uniform lis alibi pendens rale between conflicting arbitral awards and judgments based on merits in Article 11(3) of the New York Convention (that only refers parties to arbitration in cases that include existing valid agreements) would also be desirable in the new convention.
The lack of substantive validation rales to prove the existence of an arbitration agreement makes such lis alibi pendens rale necessaiy to avoid conflicting decisions and consequential forum shopping. The inclusion of a uniform interpretation of conflict of laws rulings could lead to a uniform application. The international uniformity achieved would provide for consistent arbitral awards and judgments based on merits, surpassing the scope of application of the Brussels I Regulation (recast) and the restrictive one of the Hague Choice of Court Convention on maritime matters.
This work has not analysed the recognition and enforcement of judgments and arbitral awards but rather jurisdiction and arbitration agreements. However, compliance with lis alibi pendens and mutual trust principles between EU Member States is required when a declaratory judgment is rendered to enforce an arbitration agreement or an award. In such case, the enforcement of an arbitral award may be restricted if the dispute has been already judged by an EU Member State court (res Judicata).
Jurisdiction agreements in favour of EU Member State courts are not subject to public policy restrictions according to Article 45(3) of the Brussels I Regulation (recast). The ordre public international exception of Article 45(1 )(a) applies to non-EU state court judgments but not to ones issued by EU Member State courts. However, the ordre public international exception of Article V(2)(b) of the New York Convention can only be raised by EU Member State courts when the recognition and enforcement of a judgment are sought, having been an award with res judicata effect (Article III of the New York Convention) rendered by any EU or non-EU court under Article VII(l) of the New York Convention. For the reasons mentioned above, the new convention on jurisdiction and the recognition and enforcement of judgments in maritime matters should contain a rule incorporating the res judicata effect given to judgments on the merits issued by EU Member State courts that ignore a valid arbitration agreement.
Compatibility rules regarding jurisdiction for the arrest of ships are contained in Article 7(1) of the 1952 Arrest Convention, which states that ‘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 gives jurisdiction to such Courts’. Article 7(3) notes the following:
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.
It would be desirable to include a clause ordering a court to stay proceedings if a valid jurisdiction clause is included in the contract for the carriage of goods, in cases of a cargo claim dispute under which an arrest is ordered. Moreover, this article would enhance jurisdiction for the arrest of vessels, enforcing any choice of forum or arbitration clause included in the contract for the carriage of goods by sea. The provision would mitigate conflicting decisions and better coordinate arbitral tribunals and courts, avoiding reactive and proactive forum shopping, while protecting the interests and choices of parties resolving disputes.
Such compatibility clause would reinforce Article 7(1) of the 1999 Arrest Convention, which provides for the arrest in the jurisdiction where the ship is located, enhancing party autonomy by explicitly allowing the dispute on the merits of the case when the parties have agreed a jurisdiction or arbitration clause. The judgment or award should be enforced by the courts where the ship has been arrested under Article 7(5) of the 1999 Arrest Convention.
The application of the lis alibi pendens rules of the Brussels I Regulation (recast) is avoided if a ship is located outside the territory of an EU Member State when the 1952 Convention (and potentially the 1999 Arrest Convention) applies. The proposed new convention would avoid the application of the forum non conveniens doctrine in the case of jurisdiction agreements present at the dispute. It is acknowledged that the doctrine does not apply to arbitration clauses, because the UK and Spain are bound by the New York Convention. In any case, once a judgment or award has been rendered it would be enforced where the ship has been arrested.
Thus, there is a strong need for uniform rules in order to ensure legal certainty. Possible obstacles to successful negotiations on the proposed new specialised convention for maritime matters, and subsequent approvals/ratifications, are likely to be rooted in political and legal reasons. The unilateralism of national legislators, such as the drafters of the Spanish SAMN, ignores the inherently international nature of the maritime sector and the subjective characterisation of its actors. However, there are contradictory examples in areas such as non-contractual liability caused by oil pollution, where there is strong harmonisation. The proposed new convention would be difficult to accomplish in practice. The shipowner’s interests in the EU (as opposed to shippers located outside Europe in ‘cargo countries’) could be one reason along with political interests. The reasons are acute and would require the EU to support and authorise Member States to ratify such a new convention in maritime matters that would be prevalent over the Brussels I Regulation (recast).
What are the main obstacles for the approval of the proposed new instrument? First, Article 5 of the Hague Choice of Court Convention does not require parties to reside in a contracting state, unlike in the Brussels I Regulation (recast). Second, any contracting state may refuse to be competent (Article 19) when the residence of the parties and all the elements of the dispute, except the location of the chosen court, have no link to that state. Third, any contracting state may refuse the recognition and enforcement of a judgment of another contracting state (Article 20) when the residence of the parties and all the elements of the dispute, except the location of the chosen court, are located in the requested state. Consequently, if the choice of forum in maritime matters between non-EU and EU Member States is liberalised, EU Member States would be obliged to recognise jurisdiction agreements in favour of non-EU countries in cases of cargo dispute. This could lead to the application of the Hamburg or Rotterdam Rules, which do not generally recognise exclusive jurisdiction agreements (the Rotterdam Rules do in specific circumstances). This author believes that the negotiation of such an international instrument, despite current legal, political and economic constraints, would transform a static and descriptive playing field into a dynamic terrain.
Despite attempts made with the UN Convention on International Transport of Goods of 1980, a unified multimodal transport regime has not yet been put in place, and the still-not-in-force Rotterdam Rules offer a limited scope regarding exclusive dispute resolution agreements on volume contracts. A new international instrument should include exclusivejurisdiction and arbitration agreements, including multimodal transport, in its scope of application, and ideally, such an instrument would be ratified by both the UK and the EU. There are no clear answers as to what the future will bring in 2021 and beyond, after the expiration of the Brexit transition period, but the questions posed following the analysis of the status quo lay the ground for future research and reflection. A new instrument would represent a substantive contribution to the creation of a new regime that would benefit not just the UK and EU, but other nations around the globe. Precisely as some of the matters previously expressed have not been resolved by the time this book has been drafted, future scholars can consider and pontificate.
