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Incorporation – jurisdiction and a proper law clause held incorporated – Congenbill 1994 Form

The Facts

Coal was shipped under a Congenbill 1994 form bill of lading containing the following term on the reverse:

All terms and conditions, liberties and exceptions of the charter party, dated as overleaf, including the law and arbitration clause, are herewith incorporated”.

A further clause provided for the application of the Hague or Hague-Visby Rules.

The voyage charter between the shippers and the voyage charterers (who had time chartered the vessel from the owners) was in the form of an email fixture recap which set out the main terms agreed and contained the following:

Otherwise as per proforma C/P Glencore / Eitzen latest C/P … logically amended as per main terms agreed

The Glencore / Eitzen charter was on an Amwelsh 1979 Form and contained the following clause:

This charter party shall be governed by English Law, and any dispute arising out of or in connection with this charter shall be submitted to the exclusive jurisdiction of the High Court of Justice of England and Wales”.

During the course of discharge, the cargo developed hot spots and was doused with fresh and salt water.

The receivers claimed that the salt water contaminated the cargo making it unusable for their purposes, namely, use in industrial boilers for the production of electricity.

Receivers thereupon arrested the vessel.

The vessel was allowed to complete discharge and to sail in return for the provision of first, a P&I Club letter of undertaking, and later, a bank guarantee furnished on behalf of the owners.

Owners instituted an action seeking a declaration of non-liability based on the application of English Law and the Hague-Visby Rules (in particular Article IV Rule 6 dealing with the shipment of inflammable or dangerous cargoes).

Receivers wished the matter to be heard in Morocco where the Hamburg Rules required proof only that the cargo was damaged on outturn.

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Charter Party Casebook