QUEEN'S BENCH DIVISION
Rolls Building, EC4A 1NL
B e f o r e :
| Harms Bergung Transport und Heavylift GmbH & Co KG
(1) Harms Offshore AHT 'Uranus' GmbH & Co KG
(2) Harms Offshore AHT 'Magnus' GmbH & Co KG
(3) Harms Offshore AHT 'Ursus' GmbH & Co KG
(4) Harms Offshore AHT 'Taurus' GmbH & Co KG
(5) Harms Offshore AHT 'Orcus' GmbH & Co KG
(6) Harms Offshore AHT 'Janus' GmbH & Co KG
Mr Chris Smith (instructed by Fleet Hamburg LLP) for the Claimant/Respondent
Hearing date: 15 April 2015
Crown Copyright ©
Mr Justice Simon:
Pursuant to the technical and commercial management agreement date 26 May 2009, as amended from time to time ('the Contract') between the Claimant as technical and commercial managers and the owners … and on the basis of acts of owners in way of tort or delict, the Claimant claims damages for wrongful termination of the Contract by owners by way of selling the Vessel without due notice or at all, causing loss and damage to the Claimants.
Further, under the articles of association of the corporate entity of the Owners, the Claimant was a co-owner of the Vessel by way of owning a share in the corporate entity of the Owners. Owners breached the terms of the articles of association by agreeing to sell the Vessel without due notice or at all. The Claimant seeks damages for the wrongful termination of the Contract and for selling the Vessel constituting a breach of the Contract and a breach of the articles of association, tort, and statutory duty in respect of all losses suffered as a result.
This Agreement is governed by German law.
Any and all disputes arising in connection with this Agreement or with respect to its validity, shall be decided upon through a Court of Arbitration based in Hamburg and in accordance with the Rules of Arbitration of the German Maritime Arbitration Association. The proceedings will be conducted in the German language.
(a) Has there been an agreement or mutually enforceable commitment to refer the ship management claims to resolution by this court? Alternatively, are the Defendants entitled to insist that the ship management claims are determined here?
(b) Whether the articles of association claims fall within a head of Admiralty jurisdiction as set out in section 20(2) of the Senior Courts Act 1981?
The first issue on this application: jurisdiction in relation to the ship management claims
The Claimant is in fact prepared to submit to the jurisdiction of the English Courts in respect of the substantive claims.
My clients each hereby confirm they accept this offer in respect of the damage claims arising from the allegedly unlawful termination of the six ship management agreements and hereby submit to the jurisdiction of the Admiralty Court for these claims only.
The Claimant is in fact prepared to submit to the jurisdiction of the English Courts in respect of the substantive claims. However, as the Defendant is not, the Claimant does not seek to subject these disputes to the jurisdiction of the English Courts in deciding on the merits. Instead, the Claimant has issued the in rem claim in respect of the Vessel in order to preserve its statutory rights to arrest for security in support of German Court proceedings and arbitration as it is entitled to do.
The Claim forms say the Claimant has a claim for damages for breach of the ship management agreement and/or for breach of the articles of association and is written in such a way as to suggest that the claim is subject to the jurisdiction of the Courts of England and Wales. However, the claim for damages arising from the breach of the ship management agreement is exclusively subject to a German Arbitration clause and any dispute about the alleged breach of the articles of association would be exclusively within the competence of the German Courts for dealing with company law disputes.
For property to be arrested to support arbitration the claimant must issue an in rem claim form, thereby breaching the arbitration agreement. It would then be expected that it would be the defendant who seeks to stay for arbitration. However, as now seems accepted, the arbitration agreement is not normally to be construed as excluding the power to arrest, and the issue of a claim form is proper despite its sole purpose being to obtain security. On that basis there should be no bar once security is obtained to the claimant seeking a stay of the action. If it is not so, the statutory provision leaves a claimant with the option of agreed arbitration without security or litigation with security, the arbitration agreement operating only at the option of the defendant.
The second issue: whether the articles of association claims fall within the admiralty jurisdiction as set out in section 20 of the Senior Courts Act 1981?
(a) any claim to the possession or ownership of a ship or the ownership of any share therein;
(b) any question arising between the co-owners of a ship as to possession, employment or earnings of that ship.
Has the Claimant established jurisdiction on the basis that it is claiming possession or ownership of a ship or a share therein?
Is there jurisdiction on the basis of a question arising between co-owners of a ship as to its employment?