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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Africa Express Line Ltd ("Ael") v Socofi SA ("Socofi") & Anor [2009] EWHC 3223 (Comm) (11 December 2009) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2009/3223.html Cite as: [2010] ILPr 15, [2009] EWHC 3223 (Comm) |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
AFRICA EXPRESS LINE LIMITED ("AEL") |
Claimant |
|
- and - |
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(1) SOCOFI S.A. ("Socofi") (2) PLANTATIONS DAM S.A. ("DAM") |
Defendants |
____________________
Mr Chirag Karia (instructed by Dawsons LLP) for the First Defendant
Hearing dates: Friday 27th November
____________________
VERSION
OF JUDGMENT
Crown Copyright ©
Mr Justice Christopher Clarke :
"Article 1: Object of the contract
The object of this contract is to define the principles that govern the maritime transport conditions that will apply between AEL and the OCAB and its members, conditions transcribed into a "Slot Charter Agreement[1]" which must be signed at the latest by 11 December 2006.
Article 4: General Conditions applying to members of the OCAB
The service agreement supplied by AEL is defined in the slot charter agreement entered into with the members of OCAB under the aegis of OCAB……".
In effect OCAB was to agree with AEL a form of contract of affreightment to be entered into by its members. Contracts in that form would then be signed by AEL and the relevant member.
"10 Arbitration of Disputes
In case of dispute, the parties agree to seek for an amicable agreement. If they do not reach to such agreement in a delay of one month after the event, each party shall appoint an arbitrator….
[There then follow the provisions about arbitrating claims up to $ 125,000]
Any dispute where the amount in dispute exceeds USD 125,000 …… shall be submitted to the High Court of Justice of London. The Defendant shall, within 14 days of receipt of a request to do so, instruct solicitors to accept service on its behalf of proceedings in the High Court of Justice and file an acknowledgement of service."
"We can confirm that we are the sole importer of merchandise (fresh pineapples) produced by [DAM] in Cote d'Ivoire, and that we purchased said merchandise at FOB Abidjan prices under the terms of an agreement dated 1 January 2005 ….
In a letter sent to us by e-mail and fax on 20 July 2007, LV FRUITS informed us that it intends to cease providing all services on our behalf without notice…..
Consequently, we would like you to provide the following services on our behalf directly for PortVendres
and with our usual correspondent for Anvers:
All transit/customs clearance operations
All handling operations from alongsidevessel
until "wagon depart" and deliveries following our "directives", whether departing the port to the client or made available for transport to warehouses.
……,…
If you agree, please provide us with your standard charges for both ports and your payment conditions for acceptance by us[3]… …
On a practical level, we propose that you invoice us as per usual with a reference to maritime freight .."
"Following your e-mail dated 31/02/2007, which was forwarded to me by Mr de Fremont from Transit-Fruits, AEL can confirm the following points within the framework of your request for services.
First of all, we noted the exclusive purchase agreement that ties your firm to [DAM], a structure with which we signed a slot charter agreement for 2007. This purchase agreement clearly states that SOCOFI assumes responsibility for costs associated with maritime freight, handling and forwarding for fruits from the DAM shipper.
We are prepared to offer you transport services from alongside Cote d'Ivoire to on truck in Europe in the ports of Port-Vendres
and Anvers.
This offer includes Free In/Liner Out (FILO) maritime transport under the conditions of the aforementioned charter agreement between AEL and DAM[4].
In addition to the above, an additional flat charge of 35 euros per pallet of pineapples has been added. This charge includes:
- Handling to warehouse and from warehouse to loaded onto
vehicles
![]()
- Transit (excluding T 1)
- 48 hours storage at temperature
You will be invoiced directly for all other services by the port service provider at your location."
"Subject: Your tariff proposal[5] of today
"We acknowledge receipt of your mail sent today, and confirm our acceptance of the following points:
1) The maritime transport service under the conditions of the contract of affreightment between AEL and DAM
2) The fixed charge of € 25 per pallet including the services indicated by you …"
"Our organisation for the maritime transport of fruit exported by Cameroonian, Ghanaian and Ivorian producers is directly reliant on the signing of the EPA. On this day, after thevery
recent signing of these agreements by the Cote d'Ivoire and Ghana, uncertainty remains with regard to Cameroon.
However, as this week is the week for the first shipments of 2008, we are sending you below the details of our maritime transport offer for this new year.
This offer is, however, liable to modification (following prior notification) in the event that an agreement does not occur in time between Cameroon and the European Union.
Currently, these agreements that bound AEL and the Ivorian shippers in 2007 (and which finish with the shipments of week 50) have been terminated and will not, therefore, be renewed in 2008."
The letter went on to explain the reason for a significant change in AEL's freight offer and set out new freight rates and bunker adjustment factors as well as rules for reserving and allocating freight, provisions about ullage, payment rules, port storage costs, liner out terms and the form of the bills of lading. It made no reference to an arbitration or jurisdiction clause.
The rival contentions
Law
Standard terms
(a) where a clause conferring jurisdiction is included among the
general conditions of one of the parties printed on the back of a contract, but only if the contract signed by both parties contains an express reference to those general conditions; or
(b) where the contract refers to a prior written offer which refers to
general conditions including a jurisdiction clause, only if the express reference can be checked by a party exercising reasonable care and the general conditions (including the jurisdiction clause) have been communicated to the other party with the prior offer[6].
"27 There are many cases in which the courts have to decide whether terms from one contract have been incorporated in another. A number of these cases concern the incorporation of terms from a direct insurance into a reinsurance. But no hard and fast rules emerge from these cases as one would expect. The question in each case is one of construction: did the parties to the contract in which the general words of incorporation appear intend that their contract should include the particular term from the other contract referred to? It may be, as Mr Kealey submits, that the courts will answer this question in favour of incorporation more readily in some categories of cases than in others, but that is no more than saying that the contractual context and the words used are all important. As choice of law and jurisdiction clauses are important, clear words of incorporation are required. In the insurance context where the contracts concerned are back-to-back and cover the same subject matter and interest incorporation is more likely to have been intended than where the contracts are not so closely connected."
"26 ………The incorporation of the terms of one contract into another related contract between different parties raises rather different questions from those which arise when one party to a contract seeks to incorporate by reference a set of standard trading terms. In the former case most, but not all, of the terms of the original contract are likely to be directly relevant to the substance of the contract into which they are to be incorporated. In these circumstances it becomes necessary to decide which terms the parties intended to incorporate and which they did not. In many cases the answer will be that in the absence of specific language the Court will not be able to infer with confidence that the parties did intend to incorporate any terms other than those which are germane to their own contract: see the comments of Mr. Justice Colman in AIG Europe (U.K.)Ltd.
![]()
v.
The Ethniki at pp. 309f-310e. . . . . The present case, of course, is of the former kind. It does not necessarily, follow, therefore, that general words in the reinsurance contract incorporating the terms and conditions of the underlying policy can be taken as demonstrating clearly and precisely the existence of a consensus in relation to clauses which are ancillary to the substance of the contract. In each case the Court must construe the language of the contract in the context of its commercial background and ask itself whether a consensus on the subject matter of the jurisdiction clauses is clearly and precisely demonstrated.
27 ……… The decisions in AIG Europe (U.K.)Ltd.
![]()
v.
The Ethniki and Arig
v.
Sasa support the
view
that in the context of contracts of reinsurance jurisdiction clauses, being ancillary in nature and having no bearing on the definition of the risk, are not germane to the substance either of the underlying policy or of the reinsurance contract. In those circumstances general words of incorporation will not suffice to demonstrate with sufficient certainty to satisfy the requirements of art. 17 the existence of the necessary consensus. Although the commercial background does not reinforce this conclusion (as it did in both AIG Europe (U.K.)
Ltd.
![]()
v.
The Ethniki and Arig
v.
Sasa), it is not of sufficient weight to make good this deficiency in the language of the contract."
"... substantial weight to be attached to the likelihood that the parties would not mutually intend to incorporate terms merely ancillary to the substance of the contract, such as an arbitration clause.
Having regard to the underlying reasons for that approach to construction of incorporation clauses with regard to arbitration clauses, I have reached the conclusion that the same approach should normally apply to jurisdiction clauses." (per Colman J, AIG Europe (UK)Ltd,
![]()
v.
The Ethniki [1999] Lloyd's Rep IR 221 at 227 col 2;
Practical application
(i) In The Ethniki the Court of Appeal held that "Conditions: wording as original" was insufficient to incorporate the jurisdiction clause: The Ethniki [2000] 2 All ER at 574 – 575 @ [30] & [39] – [41]. (The same decision had been reached earlier by Tuckey J. in Arig Insurance Co.Ltd.
![]()
v.
Sasa Assicurazione Riassicurazione S.p.A. (unreported, Feb. 10, 1998).)
(ii) "Conditions: All terms, Clauses and conditions as original and to follow the original in all respects including settlements" was held to be insufficient in AIG Europe SAv
QBE International Insurance
Ltd.
[2001] 2 Lloyd's Rep. at 269 @ [4] & 273 – 274 @ [27].
(iii) "All the terms whatsoever of the said charter apply to and govern the rights of the parties concerned in this shipment" failed to incorporate a jurisdiction clause in Sibotiv.
BP France [2003] 2 Lloyd's Rep. [18], [45] – 46] & [58], despite the "whatsoever".
(iv) "To follow all terms and conditions of the primary policy together with riders and amendments applicable there - to covering the identical subject matter and risk including . . ." was held insufficient in Dornoch even though that clause contained the words "Jurisdiction Clause" on a separate line at the bottom. Aikens J. (affirmed by the Court of Appeal) held even that was not enough: Dornoch [2006] Lloyd's (Ins. & Reins.) Rep. at 135 @ [19] & 142 - 143 @ [53].
(v)
In Prifiti
v
Musini [2004] Lloyd's (Ins & Reins) Rep 518 a full reinsurance clause ("Being a reinsurance of and warranted subject to the same terms and conditions (excluding limits and rates) as and to follow the settlements of the Reassured") was inapt to incorporate a Spanish jurisdiction clause, even though the slip for the previous year had made express reference to such a clause. Andrew Smith J held that, even in the earlier year, there was no such incorporation because the fact that the leading underwriter had initialled the wording of the clause under a slip which read "Form Slip Reinsurance NMA 1779a plus wording as agreed by Leading Underwriter on 10 December 1999" did not mean that the jurisdiction clause was incorporated into the reinsurance policy
Socofi's submissions
i. The understanding at the end of the Marseilles meeting was that Socofi would be contracting with the French company, Transit Fruits, and not its English sister, AEL : see paras 15-16 of Daudet 1st Witness Statement.
ii. As a result, following the meeting, on 30th July Mr Daudet sent an e-mail to M. de Frémont of Transit Fruits (not, AEL) asking for their "payment conditions for acceptance by us" ("conditions de règlement pour acceptation de notre part").
iii. For some reason the reply came from Mr Larkin of AEL. He offered services on FILO terms, "on the conditions of the above contract of carriage signed by AEL and DAM" ("aux conditions du contrat d'affrètement précité, signé par AEL et DAM") plus "an additional flat charge of 25 euros per pallet of pineapples".
iv. Finally, Mr Daudet wrote back to Mr Larkin under the heading "Your tariff proposal of today" ("votre
proposition tarifaire de ce jour") accepting AEL's offer.
v.
The parties' focus had been exclusively on what service was to be provided and at what cost. There was no discussion of or any suggestion that the parties contemplated questions of jurisdiction. The clause conferring jurisdiction was not "in fact the subject of consensus between the parties" as required (Bols [2007] 1 WLR 12, 22 @ [28]).
AEL's submissions
" We are prepared to offer you transport services from Cote d'Ivoire to on truck in Europe in the ports of Port-Vendres
and Anvers
This offer includes …. Free In/Liner Out (FILO) maritime transport under the conditions of the aforementioned charter agreement between AEL and DAM[7].
Socofi then replied :
"We acknowledge receipt of your mail sent today, and confirm our acceptance of the following points
1) The maritime transport service under the conditions of the contract of affreightment between AEL and DAM"
Conclusions
Postscript
"The Act of 1966 on Contracts of Carriage and Maritime Transport and its Implementation Decree stipulates that the shipowner provides hisvessel,
or space on his
vessel
in exchange for the payment of freight."
"Que la loi de 1966 sur les contrats d'affrètement et de transport maritimes et son décret d'application prévalent que le fréteur met à disposition son navire ou un espace sur ce navire en échange du paiement d'un fret").
Article 2 of that law grants the shipowner a right of lien over the cargo for the payment of the freight ("fret").
Note 1 “Contrat d’Affrètement d’Espace” [Back] Note 2 “Les Note 3 “ Note 4 “aux conditions du contrat d’affrètement précité, signé par AEL et DAM”. [Back] Note 5 “proposition tarifaire” [Back] Note 6 The second condition is not expressed in the ruling of the court, although it is in the judgment. [Back] Note 7 “aux conditions du contrat d’affrètement précité, signé par AEL et DAM”. [Back]volumes
previsionnels annuel et hebdomadaire, figurent en annexe 3. Bien que ces
volumes
ne constituent pas engagement de la Structure Exportatrice, ces informations doivent obligatoirement etre annexes au present contrat”. In the agreement DAM was termed the “Structure Exportatrice”. [Back]
vos
tarifs habituels pour les deux ports et
vos conditions de reglment pour acceptation de notre part” [Back]