An interesting English court decision where a subcontractor of the bill of lading carrier was able to exercise positive rights against a shipper who had taken proceedings and secured judgement in a jurisdiction other than what was specified in the jurisdiction clause in the bill of lading.   

The Facts 

A shipper contracted with a carrier, using the carrier’s online booking system, for transport of containerised timber from Guinea-Bissau to Huangpu, China. Bills of lading were not immediately finalised due to the shipper’s failure to send approval instructions as required by the booking procedures.   

The bills were finalised after the cargo’s arrival in China and issued by the carrier’s agent in Guinea-Bissau under some duress by a court order, in respect of debts due from the shipper to the Guinea-Bissau state. Thus, 13 bills of lading were issued by the agent on behalf of the carrier and handed to a Guinea-Bissau court. The state retained the bills until a third party discharged the debts, at which point the bills were released and the consignees took delivery of the cargo.    

The shipper issued proceedings for delay in Guinea-Bissau against the local agent (but not the carrier itself), and obtained a judgment in excess of USD10 million. 

The agent and the carrier issued proceedings in the English Commercial Court seeking damages or an indemnity, and a declaration that they had no liability to the shipper under the contract of carriage, because the Guinea-Bissau proceedings were in breach of a Himalaya clause and of an exclusive jurisdiction clause in favour of the English courts, which was explicitly referenced in the Himalaya clause. These clauses formed part of the carrier's standard terms and conditions, and were included on the back of the bills.

These clauses formed part of the carrier's standard terms and conditions, and were included on the back of the bills.

Consequently, the claimants argued, these terms were fully incorporated into the contracts of carriage between shipper and the carrier. The claimants argued further that the agent could rely on the clauses as a third party under the Himalaya clause.  

The shipper argued that there was no incorporation because the bills were provided after the contracts of carriage had been concluded. Further, the shipper claimed that the clauses were onerous and explicit attention should therefore have been drawn to them. 

The Judgment  

The court held that the shipper had accepted the carrier’s terms, including the exclusive jurisdiction and Himalaya clauses, by ticking boxes during the online booking process and that draft bills had immediately been issued containing these terms.   

The court rejected the shipper’s argument that the clauses were onerous or unusual, and should have been highlighted. The court found that these would be found in any well drafted bill and, in any case, there was an established course of dealing between the parties.    

After a fundamental review of the nature of Himalaya clauses, the court found that the agent could rely entirely on the clauses in the contract with the carrier at common law and also, except in respect of the claim for damages, under the UK Contracts (Rights of Third Parties) Act 1999.   

The court found that the agent could rely entirely on the clauses in the contract with the carrier at common law

An earlier decision, to the effect that a Himalaya clause did not bring with it enforcement of an exclusive jurisdiction clause was distinguished because, in contrast to the present case, there was no explicit reference in the Himalaya clause to the exclusive jurisdiction clause.  

The shipper’s argument that the issues before the English court had already been tried elsewhere (res judicata) was rejected because the Guinea-Bissau proceedings were contrary to natural justice and because the agent had not brought the proceedings or submitted to the jurisdiction of the court.  

Both the carrier and the agent obtained a declaration of non-liability under the bills of lading, due to Hague Rules timebar and exclusions in the bills for delay and losses caused by a party failing to pay its debts.

Comment 

The most important message from this decision is that an exclusive jurisdiction clause, if it is to be relied upon by a third party, should by expressly referenced within a Himalaya clause. A secondary point is that exclusive jurisdiction and Himalaya clauses are not unusual or onerous, and it is therefore not generally necessary to draw attention to them.  

MAERSK GUINEA-BISSAU & MAERSK A/S v ALMAR-HUM BUBACAR BALDE Sarl (“Raquel S”) [2024] EWHC 993 (Comm)

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