August 01 2012
Dutch Civil Procedure Code
Brussels I Convention
A case involving jurisdiction clauses under bills of lading decided by the Appeal Court of The Hague in September 2011 highlights how the Dutch Civil Procedure Code differs from current European regulations in its treatment of such issues. This judgment provides a comparison between the systems of Article 629 of the code and Article 17 of the Brussels I Convention.
The dispute arose from the carriage by sea of a cargo shipment from Florida to Rotterdam.(1) The bill of lading contained a jurisdiction clause stipulating that:
"All disputes relating to this bill of lading shall be determined by the courts of Singapore to the exclusion of the jurisdiction of the courts of any other country provided always that the carrier may in its absolute and sole discretion invoke or voluntarily submit to the jurisdiction of the courts of any other country…If carriage includes carriage to, from or through a port in the United States of America, the merchant may refer any claim or dispute to the United States District Court for the Southern District of New York in accordance with the law of the United States of America."
A Netherlands-based company, as a third-party bill of lading holder, claimed in respect of cargo damage from the shipowner. Meanwhile, the shipowner argued before the Rotterdam District Court, and subsequently before the Appeal Court of The Hague, that the Dutch courts did not have jurisdiction to hear the dispute.
Under Article 629 of the Dutch Civil Procedure Code, the court of the district in which the final destination under the bill of lading is located has jurisdiction over disputes involving contracts for the carriage of goods wholly or partly by sea from a place outside the Netherlands to a final destination in the Netherlands.
Article 629(2) of code contains a protective rule in favour of the third-party holder of a bill of lading in relation to voyages where goods are carried wholly or partly by sea from a place outside the Netherlands to a final destination in the Netherlands. Only under specific circumstances is a choice of forum that deviates from this rule deemed to be valid. A clause in which the jurisdiction of a named place in the carrier or consignee's country of residence is chosen constitutes a valid deviation from the main rule. A jurisdiction clause is also valid if it is incorporated in a separate document that does not refer to general conditions.
Article 629 aims to protect the consignee against abuse of jurisdiction clauses which:
According to the Dutch bill of lading holder in this case, the fact that the jurisdiction clause stated 'courts of Singapore' meant that the clause was too vague and did not meet the clarity requirement. The Hague Appeal Court, as well as the Rotterdam District Court, decided that the use of the plural word 'courts' was an indication that Singapore was the appropriate place for the entire judicial process, from first instance through any subsequent appeals, subject to locally applicable procedural law. The fact that the clause did not stipulate which court of first instance should be referred to did not mean that the clause was so unclear as to render it void.
The court also ruled that authorisation to refer to the US District Court for the Southern District of New York any claim or dispute involving carriage from, to or through a US port, in accordance with US law, was a valid addition in the consignee's favour. It held as valid a clause whereby the carrier may, in its absolute and sole discretion, invoke – or voluntarily submit to – the jurisdiction of the courts of any other country. Such freedom of choice may be advantageous to a carrier looking to sue a merchant in a country where the merchant provides sufficient opportunity for recovery. This was not a complicating factor for the consignee, because the consignee would have to apply to the courts of Singapore or, in case there was a choice, to the named judge in New York.
Contrast this with the ruling in a 1993 case before the Dutch courts(2) involving the EU Brussels I Convention. The dispute involved events arising from the carriage of cargo, under a bill of lading, from Indonesia to Amsterdam. The bill of lading stipulated that the contract of carriage was "governed by English law, and disputes determined in England according to English law to the exclusion of the jurisdiction of the courts of any other country".
Dutch cargo interests claimed against the UK shipowner for cargo damage caused during sea carriage. The shipowner argued that the Amsterdam District Court was not competent to hear the dispute. The EU Brussels I Convention applied, since the United Kingdom is party to the convention, and it had to be decided whether the choice of jurisdiction in the bill of lading was valid and in line with Article 17 of the convention. The determining factor was whether a reference to 'disputes determined in England' made clear to which court the claim should be submitted. The court ruled that it should be unambiguously clear to English attorneys that, under the meaning of this clause, only one court of jurisdiction was competent. The fact that the court was not mentioned by name or location did not mean that this requirement had not been met.
The Rotterdam District Court and the Appeal Court of The Hague have decided that under Article 629 of the Dutch Civil Procedure Code, the name of the place should be mentioned. This place should be situated in the country in which the carrier or the consignee has its residence. Another option is for the jurisdiction clause to be set out in a separate document, which should not refer to general terms and conditions.
However, under the European system, if a jurisdiction clause does not properly explain which court and instance is competent to hear a dispute, but the lawyers in that country nevertheless have no doubt on the subject, such a clause meets the requirements of Article 17 of the Brussels I Convention.
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