Arbitration/Jurisdiction Clauses in Maritime Law
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The database contains 43 case summaries relating to Arbitration/Jurisdiction Clauses in Maritime Law. The summaries are sorted in reverse date order with 20 summaries per page. If there are more than 20 summaries, use the navigation links at the bottom of the page.
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Cancellation of Ferry Service - Jurisdiction Clause - Whether the Federal Court or Provincial Courts have Jurisdiction
Demers v. Marine Atlantic Inc., 2015 QCCQ 1793
Précis: The Quebec Small Claims Court refused to give effect to a jurisdiction clause in passenger ferry ticket in favour of the Federal Court.
Facts: The plaintiffs had purchased tickets on a ferry that was scheduled to leave from the Port of Argentia but was changed to Port aux Basques, both located in Newfoundland. The plaintiffs commenced this claim in the Quebec Small Claims Court alleging that they suffered additional expenses as a result of this change. The ticket contained a jurisdiction clause that provided the Federal Court in either Newfoundland or Nova Scotia was to have exclusive jurisdiction. The defendant sought to have the case dismissed on the basis of the jurisdiction clause.
Decision: Action dismissed.
Held: The Federal Court would not have jurisdiction to hear this dispute as the claim is based on the law of contract and there is no federal law to nourish the jurisdiction of the Federal Court. The parties cannot by agreement confer jurisdiction on the Federal Court. However, the courts of Quebec are also without jurisdiction pursuant to Art. 3148 of the Civil Code which provides the courts have no jurisdiction where the parties have agreed to refer the matter to a foreign court. The appropriate court to hear the dispute is the small claims court of either Newfoundland or Nova Scotia.
Comment: This decision is clearly wrongly decided. Although most of the reported cases involving carriage of passengers by sea are decisions of provincial superior courts, the law that is applied is, almost without exception, Canadian maritime law including, where applicable, the Athens Convention. Therefore, pursuant to s. 22(1) of the Federal Courts Act, the Federal Court would have concurrent jurisdiction. (Regrettably, as with many Quebec decisions, this decision is reported only in French and the summary is based upon a translation that may be imperfect.)
Booking Note - Charters - Arbitration Clause - Stay of Proceedings - Appeals - Standard of Review
Comtois International Exports Inc. v. Livestock Express BV, 2013 FC 1239 2014 FC 475
Précis: The court had no discretion to not enforce an arbitration clause in a charter party/booking note.
Facts: The defendant was the operator of the “Orient I”, a special livestock carrier. The plaintiff entered into a voyage charter of the vessel for a single voyage between Canada and Russia. The charter party was apparently contained in a booking note issued in Belgium. The booking note incorporated an arbitration clause in favour of London and a choice of law clause selecting English law. The booking note also contained an ice clause which gave the defendant the option of loading the cargo in St. John, New Brunswick if the port of Becancour, Quebec was not in ice free condition. The defendant in fact did sail to St. John because of forecasted ice conditions at Becancour. The loading of the cargo at St. John increased the plaintiff’s costs by $250,000. The plaintiff claimed this amount from the defendant alleging it had no right to change the port of loading to St. John. The defendant brought this motion for a stay of proceedings on the basis of the arbitration clause in the booking note.
At first instance (reported at 2013 FC 1239), the Prothonotary dismissed the motion for a stay of proceedings. The Prothonotary held that s. 46 of the Marine Liability Act did not apply as the contract between the parties was a charter party. However, he also held that the Court had discretion to grant a stay under s. 50 of the Federal Courts Act and that the plaintiff had discharged the heavy burden of establishing the existence of strong grounds for denying the stay on this basis. The Prothonotary noted that there was nothing linking this matter to England and that an arbitration in England would result in prohibitive costs for the plaintiff, a small company of 6 employees. The defendant appealed.
Decision: Appeal allowed.
Held: With respect to the standard of review applicable in this case, the refusal to grant a stay of proceedings is a discretionary order vital to the final issues in the case. Therefore the Court can proceed with a de novo review on this appeal.
The Prothonotary correctly held that s. 46 of the Marine Liability Act did not apply as the contract was a charter party and s. 46 does not apply to charter parties. However, the Prothonotary was in error when he held the Court had discretion to grant a stay under s. 50 of the Federal Courts Act. Article 8 of the Commercial Arbitration Code removes any discretion to grant a stay as was held by the Federal Court of Appeal in Nanisivik Mines Ltd v FCRS Shipping Ltd, 1994 CanLII 3466.
Jurisdiction Clauses - Stays of Proceedings - Forwarding Agents
DHL Global Forwarding (Canada) Inc. v. CMA-CGM S.A., 2013 FC 534
Précis: A jurisdiction clause in a bill of lading was enforced against the shipper’s agent.
The plaintiff issued bills of lading for 68 containers carried by the defendant from Halifax to Ho Chi Minh City. Upon the arrival in Vietnam, the containers were put into storage because the bills of lading had not been released by the plaintiff. Apparently the shipper had failed to pay the freight charges owing to the plaintiff. The defendant brought proceedings before the Tribunale de Commerce de Marseille against the plaintiff and consignee for demurrage and storage charges. After receiving notice of the French proceedings the plaintiff commenced these proceedings in the Federal Court for a declaration it was not liable for demurrage and storage charges. The defendant then brought this motion under s. 50 of the Federal Courts Act for a stay of the Federal Court proceedings on the grounds of a jurisdiction clause in the bills of lading in favour of the Marseille tribunal.
Decision: Motion granted.
Held: Although the plaintiff was acting as agent for the shipper, the terms of the bill of lading define “holder” as any person in possession of the bill of lading and define “Merchant” as including anyone acting on behalf of a shipper. Under these definitions the plaintiff was a “Holder” and a “Merchant” and is bound by the jurisdiction clause in the bills of lading.
Carriage of Goods - Arbitration Clause - Stay of Proceedings - Application of s.46 MLA to Charterparties
T. Co. Metals LLC v. The Federal Ems, 2011 FC 291 2012 FCA 284
A cargo of cold-rolled steel coils was carried from Brazil to Toronto pursuant to bills of lading that incorporated the terms and conditions of a voyage charterparty between the exporter and the time charterer of the vessel. Pursuant to the terms of the voyage charterparty, the exporter was to be responsible for the loading, stowing and discharging of the cargo. The voyage charterparty also contained an arbitration clause in favour of New York arbitration. At the time of the loading of the cargo there was a disagreement between the Master and the exporter as to whether the cargo should be covered with plastic sheeting. To resolve this disagreement, the exporter provided a letter of indemnity holding the Master and owners harmless for any damage due to the use of the plastic sheets. Upon arrival of the cargo at Toronto, there was damage to the cargo and the plaintiff/consignee commenced this action against the ship owner and time charterer. The owner and time charterer, in turn, commenced third party proceedings against the exporter. The exporter then brought an application to stay the third party proceedings relying upon the arbitration clause in the voyage charterparty. The owner and time charterer opposed the stay arguing that s. 46 of the Marine Liability Act applied and the third party proceedings were entitled to be brought in Canada. Additionally, they argued that the letter of indemnity was a separate contract not subject to the arbitration clause. Finally, the owner alleged it was not a party to the voyage charterparty and therefore not bound by the arbitration clause.
At first instance (2011 FC 291), the Prothonotary dismissed the motion. On appeal to a Judge (2011 FC 1067), the Appeal Judge allowed the appeal and stayed the proceedings. The main issue was whether s. 46 of the Marine Liability Act applies to charter parties. The Appeal Judge noted that the ordinary meaning of the expression “contract for the carriage of goods by water” in s. 46 could support the inclusion of charter parties. However, relying heavily on the fact that the Hague-Visby and Hamburg Rules excluded charter parties, the Appeal Judge concluded that s. 46 did not apply to charter parties. The Appeal Judge further held that the letter of indemnity was not a separate contract but an amendment of the voyage charterparty and therefore any claim under the letter of indemnity was caught by the arbitration clause in the voyage charterparty. The owner and time charterer appealed.
Decision: Appeal dismissed vis a vis the time charterer and allowed vis a vis the owner.
Held: When interpreting words in a statute the entire context and the purpose must be considered and not just the "plain meaning" of the words used. It is important to note that none of the international conventions relating to carriage of goods by sea apply to charter parties. The imbalance in bargaining power that led to the various international conventions does not exist in relation to charter parties where the traditional mode of resolving charter party disputes is arbitration. Section 46 of the Marine Liability Act was intended to address perceived unfairness resulting from the application of jurisdiction and arbitration clauses in bills of lading. In the context of legislation dealing with the rights and obligations of common carriers, the expression "contract of carriage" should not be understood to include charter parties. Moreover, there is no policy reason why charter party contracts between commercial entities dealing directly with one another should not be enforced. Further, the Appeal Judge’s conclusion that the letter of indemnity was an amendment to the charter-party is logical and supported by the evidence. However, the owner was not a party to the voyage charterparty and is not bound by the arbitration clause in that charterparty.
Note: An application to appeal to the Supreme Court of Canada was dismissed on 16 May 2013.
Stay of Proceedings - Arbitration Clause - Fraud - Res Judicata
New World Expedition Yachts LLC v. P.R. Yacht Builders, 2011 BCSC 78
In this action the plaintiff alleged that the defendant shipbuilders had engaged in a fraudulent scheme in relation to a ship building contract. The vessel was being built under a contract between the plaintiff/purchaser, NWEY, and the defendant/builder, PRYB. PRYB sub-contracted
the labour part of the build to a related company, FCY, also a defendant. Disputes arose during the course of the construction which were referred to arbitration and decided against the plaintiff in two arbitrations. The plaintiff first sought unsuccessfully to set aside the award on
the basis of bias of the arbitrator. When that was unsuccessful, the plaintiff brought this action for damages alleging fraud. The defendants moved to stay the action on the basis of the arbitration clause in the building contract and on the grounds that the issues were res judicata having already been decided in the arbitrations. The Court agreed with the defendants on both counts holding that the plaintiff was seeking to re-litigate matters that were or could have been decided in the arbitrations.
Practice - Carriage - Stay of Proceedings - Jurisdiction Clause - Federal Court Jurisdiction
Hitachi Maxco Ltd v. Dolphin Logistics Co., 2010 FC 853
This was a motion by the defendants for a stay of proceedings. The main issue was whether an admiralty action instituted in Canada in personam by two foreign corporations against four foreign corporations for the loss of cargo shipped from one foreign port and intended for discharge and delivery in another foreign jurisdiction should be stayed in favour of the jurisdiction stipulated in the bill of lading. The Court noted that there is no geographical limitation on the subject matter jurisdiction of the Federal Court and that it did not matter that the goods were not shipped from or to a Canadian port. The Court further noted that one may always institute an admiralty action in Federal Court that has absolutely no connection with Canada provided the defendants were served in Canada. The issue, the Court said, is whether it should maintain the jurisdiction or refer the matter to another court. The Court reviewed the authorities and the evidence and ultimately held that the defendants had not proven that there was a more convenient forum. The absence of evidence from the defendants was a significant factor in the decision.
Practice – Stay of Proceedings – Jurisdiction – Charter Dispute
McDermott Gulf Operating Company v. Oceanographia Sociedad Anonima de Capital Variable, 2010 NSSC 118
This was an application to stay proceedings commenced in the Nova Scotia Supreme Court on the basis that the court lacked jurisdiction simpliciter or was otherwise not the appropriate forum. The underlying claim by the plaintiff was for charter hire and other charges allegedly owed by the defendants. The first plaintiff was a Panamanian company and was the owner of the vessel which was registered in Barbados. The second plaintiff managed the charter party for the first plaintiff and was a Nova Scotia company. The defendants were resident in the United States or Mexico. The area of operations of the vessel that were the subject of the proceedings were entirely in Mexico. The Charterparty provided for Nova Scotia jurisdiction and Canadian law. The moving defendant was not the charterer under the Charterparty but it was the entity that obtained the benefit of the vessel and it appears that it had essentially assumed the obligations of the charterer. The Court first referred to the Nova Scotia Court Jurisdiction and Proceedings Transfer Act (“CJPTA”) which lists the circumstances where the court has jurisdiction. These include where there is an agreement on jurisdiction or where there is a real and substantial connection with the jurisdiction. The Court held that there was insufficient evidence of an agreement on jurisdiction given that the moving defendant was not a party to the Charterparty. The Court next considered whether there was a real and substantial connection with the province and noted that the CJPTA lists some of the factors to be taken into account when determining a real and substantial connection. The Court found that none of these factors were applicable but held that other factors may be taken into consideration including the connection of the parties to the jurisdiction, fairness, the involvement of other parties, comity and others. The Court reviewed these various factors and ultimately held that Nova Scotia did have jurisdiction. The Court further held that Mexico was not a more appropriate forum.
Carriage of Goods - Stay of Proceedings - s.46 M.L.A. – Jurisdiction Clause
Mitsui O.S.K. Lines Ltd. v. Mazda Canada Inc., 2008 FCA 219 2008 CanLII 63491
The Cougar Ace took on a list of 60 degrees while en route to Canada and the U.S.A. from Japan. As a consequence, a large number of automobiles destined for Canada and U.S.A. were damaged. All of the automobiles were subject to a contract of carriage that contained a jurisdiction clause in favour of Japan and a choice of law clause selecting Japanese law. This action was commenced by the Plaintiff to recover damages for those automobiles destined to be unloaded at Canadian Ports. A separate action was commenced in the U.S.A. in respect of the automobiles bound for U.S.A. ports but that action was dismissed based on the jurisdiction clause. Although the dismissal of the American action was under appeal, a separate action was commenced in Japan in respect of the U.S.A. bound automobiles. An action was also commenced in Japan in respect of some damaged trucks and the ship owner also commenced proceedings in Japan for a declaration of non-liability. The ship owner brought this application for an order enforcing the jurisdiction clause and for a stay of the Canadian proceedings. The Plaintiff argued, in reliance on s. 46 of the Marine Liability Act , that it was entitled to bring the action in Canada notwithstanding the jurisdiction clause. At first instance (2007 FC 916), the motions Judge noted that s. 46 permits certain actions to be brought in Canada notwithstanding a jurisdiction clause but does not override the court’s discretion to grant a stay of proceedings based on forum non conveniens factors. He then considered the various factors that are often considered and held that it had not been clearly established that Japan was a more appropriate forum than Canada. Factors that seemed to be of particular relevance to his decision included that Canada was the intended port of discharge, that the limitation amount would be higher in Canada and that the public policy behind s. 46 favoured Canada.
On appeal, the Federal Court of Appeal agreed with the motions Judge that jurisdiction clauses were no longer controlling but are now merely one of many factors to take into account in deciding the forum non conveniens issue. However, the Court of Appeal held that the motions Judge had made errors of law in his assessment of the various factors by undervaluing some and overvaluing others. Specifically, the court found that the motions Judge failed to attach sufficient weight to: the fact that there were three actions in Japan that were proceeding expeditiously; the fact that the residence of most witnesses would be Japan; the fact that applicable law was Japanese law; and, the fact of the jurisdiction clause in favour of Japan. The Court of Appeal also said it was unclear that greater damages would be available in Canada than in Japan and, in any event, suggested that this was not a reason justifying a refusal of a stay. The Court also said the motions Judge was wrong to reason that s. 46 evinced a policy in favour of Canada. In result, the appeal was allowed and the action was stayed. An application for leave to appeal to the Supreme Court of Canada was subsequently dismissed.
Carriage - Freight - set off - jurisdiction - Ciffa Terms
Locher Evers International v. Canada Garlic Distribution Inc. , 2008 FC 319
This was an action for the recovery of freight in relation to the carriage of produce from China to Toronto. The Defendant did not dispute the freight was owing but alleged a right to set-off and argued that the agreement ousted the jurisdiction of the Federal Court. The agreement between the parties expressly incorporated the Ciffa terms and those terms contained a no set-off clause which the Court had no difficulty enforcing. With respect to the jurisdiction issue, unfortunately, it is not clear from the judgment how this issue arose. There was apparently a jurisdiction clause but its contents are not set out. Nevertheless, the Court does say that the issue was raised too late.
Stay of Proceedings – Jurisdiction Clause – MLA s. 46
OT Africa Line Ltd. v. Magic Sportswear Corp., 2006 FCA 284
This was a subrogated action by cargo insurers for damages for the short shipment of goods carried from New York to Liberia under a bill of lading that was issued in Canada. The freight was also payable in Canada and the Defendant carrier, although not a Canadian resident, had offices in Canada. None of the Plaintiffs resided in Canada. The bill of lading contained a jurisdiction clause granting exclusive jurisdiction to the High Court of England. One month after the Plaintiff commenced this proceeding in the Federal Court of Canada, the Defendant commenced proceedings in England for a determination that it was not liable to the Plaintiff and it obtained an interim ex parte anti-suit injunction against the Plaintiff. This was later transformed into a regular anti-suit injunction (reported at  EWHC 2441) which was confirmed by the English Court of Appeal (reported at  EWCA Civ 710). A later petition to appeal to the House of Lords was dismissed. Meanwhile, the Defendant brought this application in the Federal Court of Canada to stay the Federal Court action on the basis of the jurisdiction clause in the bill of lading and on the basis of the doctrine of forum non conveniens.
At first instance, the Prothonotary dismissed the motion. The Prothonotary held that where the conditions of s. 46 of the Marine Liability Act were met the court had no discretion to stay proceedings on the basis of a jurisdiction or arbitration clause in a bill of lading. However, the Prothonotary also held that s. 46 did not prevent the court from granting a stay on the basis of forum non conveniens. The Prothonotary considered the relevant factors and held that Canada, not England, was the most convenient and appropriate forum in the circumstances. Accordingly, the Prothonotary dismissed the application for a stay.
The decision of the Prothonotary was appealed and the appeal is reported at 2004 FC 1165. The appeal Judge ultimately found that he was in agreement with the Prothonotary as to the effect of s. 46 of the Marine Liability Act and dismissed the appeal.
On further appeal to the Federal Court of Appeal, the Court of Appeal agreed with the lower courts that s. 46 of the Marine Liability Act did not require the Federal Court to take jurisdiction without regard to whether it was the more convenient forum. The Federal Court and Federal Court of Appeal still retained a broad jurisdiction to stay proceedings under s. 50(1) of the Federal Act. The Federal Court of Appeal, however, departed from the reasoning of the lower courts on the issue of whether the Orders and Judgments of the English courts were relevant to and should be included in a forum non conveniens analysis. The Court of Appeal considered that they were relevant and should be taken into account in the interests of international comity, to avoid parallel proceedings and to avoid inconsistent results. The Court of Appeal further held that the jurisdiction clause in the contract of carriage was a relevant factor to be taken into account in the forum non conveniens analysis noting that s. 46 did not declare such clauses to be null and void. The Court of Appeal then considered and weighed the various relevant factors and concluded that the factors connecting the dispute to Canada were relatively minor whereas those connecting it to England were much more significant. The Court of Appeal therefore concluded that English courts were a more convenient forum and granted the stay.
It is important to note that the Court of Appeal in this matter was particularly influenced by the facts that the Plaintiffs and the goods were not Canadian. At para. 88 of the Reasons, the Court of Appeal said in obiter that, when the Plaintiffs or the goods were Canadian, it was inclined to think that the jurisdiction clause and the assumption of jurisdiction by the English courts were factors that should be given no weight, as otherwise the policy of s. 46 would be frustrated.
Stay of Proceedings – Jurisdiction Clause – MLA s. 46
Sumisho Reftech Co. Ltd. v. The “Great Pride”, 2006 FC 388
This was an application to stay proceedings. The underlying matter concerned a contract for the carriage of goods from China to Japan and the parties to that contract were not Canadian residents. The only basis for bringing the action in Canada was that the Defendant COSCO had a Canadian office and the existence of this Canadian subsidiary gave the court jurisdiction under s. 46 of the Marine Liability Act. The Prothonotary granted the application for a stay subject only to COSCO's waiver of any time bar defence, which COSCO agreed to do. The Prothonotary refused, however, to order that the stay be conditional on Japan accepting jurisdiction, a condition requested by the Plaintiff.
Enforcement of Arbitration Award – Related Companies – Stay of Proceedings - Arbitration Clause
Pan Liberty Navigation Co. Ltd. v. World Link (HK) Resources Ltd., 2005 BCCA 206
In this matter the Plaintiff had obtained an arbitration award in London against a defaulting charterer under a charter party that required English law and arbitration. The Plaintiff commenced this action against the defaulting charterer to enforce the award but also included as Defendants various other corporate entities. The Plaintiff alleged that the corporate entities were one and the same and that their separate existence was a fraud. One of the entities, World Link (HK) was the charterer of the ship “Eirini” which had called at Vancouver. The Plaintiff obtained an ex parte Mareva Injunction against the ship's fuel and bunkers. The injunction was lifted when World Link (HK) paid the value of the fuel and bunkers into court. World Link (HK) then brought this application for a stay of proceedings. At first instance the stay was refused but on appeal to the Court of Appeal of British Columbia the stay was granted. The Court of Appeal held that the allegations of the Plaintiff fell squarely within the arbitration provision of the charter party because the real issue was whether World Link (HK), although not named in the charter party, was the defaulting charterer. These were matters that were properly to be heard and decided by the arbitrator according to English law. The Court of Appeal further indicated that it agreed with the approach taken by the English High Court in Norsk Hydro ASA v State Property Fund of Ukraine,  EWHC 2120, that when enforcing arbitration awards the enforcing court is neither entitled nor bound to go behind the award in question. (Note: This case should be compared with Trans-Pacific Shipping Co. v Atlantic & Orient Trust Co. Ltd. et al., 2005 FC 311.)
Jurisdiction Clause – MLA s.46 – Parallel Proceedings – Appeal from Prothonotary – Standard of Review
Ford Aquitaine Industries SAS et al. v. The “Canmar Pride” et al., 2005 FC 431
This action concerned the loss of or damage to several containers carried from LeHavre to Montreal. The damages were estimated at $6 million. The carriage was pursuant to a transportation services agreement which provided for American law and jurisdiction. The carrier under the transportation services agreement was OOCL but OOCL was expressly permitted to subcontract the carriage, which it did, to CP Ships. The Plaintiff originally commenced proceedings against only OOCL in a U.S. District Court. The Plaintiff attempted to discontinue those proceedings but was not allowed to do so. The Plaintiff also commenced this proceeding in the Federal Court against both OOCL and CP Ships. The Defendants brought this application to stay the Canadian proceedings. At first instance, the Prothonotary granted the application for a stay. He held that section 46 of the Marine Liability Act did not oust the court's jurisdiction under section 50 of the Federal Court Act to grant a stay on grounds other than a forum selection clause. He then applied the test from the decision of the British Columbia Court of Appeal in Westec Aerospace v Raytheon Aircraft Co., (1999) 173 DLR (4th) 498. That test was: 1) Are there parallel proceedings underway?; 2) If so, is the other jurisdiction an appropriate forum?; and, 3) Has the Plaintiff established by cogent evidence that there is some personal or juridical advantage available to him in the British Columbia action that is of such importance that it would be unjust to deprive him of it? The Prothonotary held that the Plaintiff had failed to meet the third element of that test. In this regard a main point argued by the Plaintiff was that a U.S. Court would apply the COGSA limit which was substantially lower than the limitation that would apply in a Canadian court applying the Hague-Visby Rules. The Prothonotary, however, considered that the issue of the applicable limitation would be argued in either court. On appeal, the appeal Judge first considered the appropriate standard of review from a discretionary order of a Prothonotary and noted that the test had been recently reformulated to require the reviewing judge to first determine whether the questions raised are vital to the final issue in the case. If so, the discretion should be exercised de novo and the reviewing judge need not consider the second branch of the test (whether the orders were clearly wrong). The appeal Judge considered the Prothonotary's decision final and thus proceeded to exercise her discretion de novo. The appeal Judge held that the Prothonotary had erred in applying the test from Westec. She considered that the Westec approach was incorrect in that it set up “loss of juridical advantage” as a separate test or step rather than weighing it with the other usual factors to be taken into account. Moreover, she considered that the objective was not just to determine if the foreign forum was equally appropriate to the domestic forum but whether it was more appropriate than the domestic forum. Nevertheless, weighing the relevant factors she concluded that the U.S District Court was a more appropriate forum and upheld the decision of the Prothonotary.
Stay of Proceedings – Arbitration Clause – MLA s. 46 – Charterparties – Bills of Lading and Incorporation of Charter Terms – Striking Claims
Dongnam Oil & Fats Co. v. Chemex Ltd. et al., 2004 FC 1732
This matter concerned damage to a cargo of bleached tallow to be carried from Newark, New Jersey to Inchon, Korea. The cargo was to be carried on board the ship “Tuapse”. The “Tuapse” was owned by Novoship but chartered under a head charter to Chemex. The head charter provided for London arbitration. The Plaintiff and Chemex entered into a voyage charter party which again called for London arbitration. The cargo was loaded at Newark and two bills of lading were issued which incorporated the voyage charter party. The cargo was carried on board the “Tuapse” to Nanaimo, British Columbia where it was transhipped to another vessel for carriage to Korea. The cargo was allegedly damaged during the transhipment. The Plaintiff subsequently commenced this proceeding and the Defendants Novoship and Chemex brought applications to stay the proceedings in favour of London arbitration. The Plaintiff argued that s. 46 of the Marine Liability Act applied making the arbitration provisions inapplicable. The Prothonotary disagreed ruling that a transhipment from one vessel to another was not loading or discharging at a Canadian port within the meaning of s. 46(1)(a). The Prothonotary further noted that section 46 should be interpreted strictly since it was a restriction on freedom to contract. The Prothonotary then considered whether the arbitration provisions were incorporated. With respect to the dispute between the Plaintiff and Chemex he found that there was clearly an arbitration provision in the voyage charter and therefore concluded that he had no alternative but to allow the stay. With respect to the dispute between the Plaintiff and Novoship, however, there was no direct contractual relationship between these two and therefore he had to consider the effect of the bills of lading. In this regard he noted that if the bills of lading had specifically referred to the arbitration provision, Novoship would be entitled to a stay. In addition, if the bills of lading incorporated the charter party terms and those terms provided that the arbitration provision applied to disputes under the bill of lading, then Novoship would be entitled to a stay. However, in this case the terms of the voyage charter party did not provide that the arbitration provision applied to disputes under the bill of lading and the bills of lading did not specifically refer to arbitration. Accordingly, Novoship was not entitled to a stay. Two subsidiary issues dealt with in these reasons concerned applications to strike out a claim for a declaration the Plaintiff did not owe dead freight and a claim for wrongful arrest. The claim for a declaration on the dead freight issue was struck on the grounds that the issue had been decided in an arbitration. The claim for wrongful arrest was struck on the grounds the Plaintiff was not the owner or in possession of the cargo at the time it was arrested.
Stay of Proceedings – Jurisdiction Clause – Bill of Lading
Z.I. Pompey Industrie v. ECU-Line N.V., 2003 SCC 27
The Plaintiffs claimed that cargo carried from Belgium to Canada and then on to the US was damaged. The Appellant shipowner sought to rely on an exclusive jurisdiction clause in the bill of lading referring claims to the Courts of Belgium. The matter arose before s.46(1) of the Marine Liability Act came into force. The Prothonotary refused to uphold the jurisdiction clause on the basis that there had been an unauthorized deviation. The Prothonotary's decision was upheld by the Federal Court Trial Division and Federal Court of Appeal. Unusually, the test applied by the Federal Court of Appeal was the tripartite test normally used in relation to interlocutory injunctions rather than the test from the The “Eleftheria”,  1 Lloyd’s L.R.237. The Supreme Court of Canada held that the Court of Appeal had applied the wrong test and that the correct test was that set out in The “Eleftheria” which requires that “strong cause” must be shown before the court will refuse to enforce an agreed jurisdiction. The Supreme Court held that there were strong public policy considerations in favour of upholding the “strong cause” test as it created commercial certainty. The Supreme Court also rejected the finding that there had been a deviation that rendered the jurisdiction clause ineffective.
Jurisdiction Clause – Bill of Lading – MLA s. 46
Nestle Canada Inc. v. The “Viljandi” et al., 2003 FCT 28
This was an an application for a stay of proceedings on the basis of a jurisdiction clause contained in a bill of lading. The Court refused the stay on the grounds that the action had been commenced after the Marine Liability Act was proclaimed in force (August 8, 2001) and, therefore, the matter was covered by s. 46(1) of the Marine Liability Act.
Carriage of Passengers – Jurisdiction Clause – Athens Convention
Friesen v. Norwegian Cruise Lines et al., 2003 BCSC 256
This was an application by the Defendant to stay proceedings commenced in British Columbia on the grounds of a jurisdiction clause contained in the passenger ticket. The Plaintiff, a British Columbia resident, was injured on an Alaskan cruise ship which had departed from the port of Vancouver. The Plaintiff argued that the matter was governed by the Athens Convention; Article 17 of which gave her the right to commence the proceedings in British Columbia. The Court, however, held that the Athens Convention was not applicable since Canada had not enacted the Convention at the time of the Plaintiff's accident. Moreover, the fact that the vessel was registered in the Bahamas, a signatory to the Convention, was held to not be sufficient to make Bahamian law applicable. The Court therefore held that the test set out in The Eleftheria,  2 All E.R. 641, was applicable and the onus was on the Plaintiff to establish a strong cause for not enforcing the jurisdiction clause. The Court held that the Plaintiff had met this onus in that virtually all of the witnesses resided in British Columbia and a stay of the action in favour of Florida would come close to denying the Plaintiff access to a court at all.
Jurisdiction clause -Marine Liability Act s.46 - Retrospective Application
Incremona-Salerno v. The “Castor” and “Katsuragi”, 2002 FCA 479
The issue in these applications was whether s. 46(1) of the he Marine Liability Act, (which provides that notwithstanding any jurisdiction or arbitration clause claims arising under a contract of carriage of goods by water may be brought in Canada where inter alia the port of loading or port of discharge is in Canada) applies to actions commenced prior to 8 August 2001, the date the Act came into force. The applications arose out of a contract for the carriage of goods by water from Italy to Canada in 1999. In February and March 2001, prior to the coming into force of section 46(1) of the Marine Liability Act , the Defendants brought the applications to stay the proceedings relying upon a jurisdiction clause in the bill of lading that gave exclusive jurisdiction to the courts of Hamburg. The motions, however, were not heard until after the coming into force of the Marine Liability Act and the Plaintiff argued that the Act applied. At first instance, the Motions Judge agreed with the Plaintiff and dismissed the stay applications. On appeal, however, the Court of Appeal held that section 46(1) was not retroactive and did not apply to actions commenced prior to 8 August 2001.
Stay of Proceedings - Jurisdiction Clause - Towage
Atlantic Cement Carriers Ltd. v. Atlantic Towing Ltd., 2002 FCT 761
This was an application by a tug owner to stay proceedings commenced in the Federal Court by the owner of a barge for damages sustained because of the sinking of the barge and for an indemnity for any amounts the barge owner might be required to pay to the owner of the cargo on board the barge at the time of the sinking. The sinking occurred during the course of a towing operation from Pictou, Nova Scotia to various ports in Newfoundland. The application for the stay was based upon a jurisdiction clause in the TOWCON agreement that specified the agreement was to be governed by English law and conferred jurisdiction on the High Court of Justice in London. The application was resisted on the grounds that s. 46 of the Marine Liability Act applied or, alternatively, that there were strong reasons to not enforce the jurisdiction clause. With respect to the application of s. 46 of the Marine Liability Act the Prothonotary held that the contract in issue was one of towage not carriage and that s. 46 therefore did not apply. With respect to whether there were strong reasons to deny the stay, the Prothonotary reviewed the various factors set out in the “Eleftheria”  1 Lloyd’s Rep. 23, and held that there were no strong reasons. Accordingly, the stay was granted.
Stay of Proceedings - Arbitration Clause - Commercial Arbitration Code
Mariana Maritime S.A. v. Stella Jones Inc., 2002 FCA 215
This was an appeal from an Order by the motions Judge dismissing an application by the Defendant carriers for a stay of proceedings. The facts were that the parties had entered into a “Conline” booking note for the carriage of the Plaintiffs’ cargo. The booking note specified that its terms would be superceded by the terms of the bill of lading which were said to be set out in full on the reverse of the booking note. In fact, as the booking note had been sent by facsimile, the terms were not on the reverse. It was, however, common ground that those terms did not include an arbitration clause. On the bill of lading that was actually issued there was added a typed “Centrocon” arbitration clause in the margin which called for London arbitration. It was this clause which the Defendants sought to enforce. The motions Judge referred to Article 8 of the Commercial Arbitration Code and noted that the court had no discretion where it finds an arbitration clause. However, the motions Judge found that on the facts of the particular case there was no evidence the Plaintiff had ever signed or agreed to the arbitration clause contained in the bill of lading and held it was therefore not part of the contract. On appeal, the Court of Appeal affirmed the decision of the motions Judge holding that if the carrier wanted to make the contract of carriage subject to the arbitration clause they should have made their intention known to the Plaintiffs.