New cargo recovery options post Brexit

English and Danish law is now in the same boat in the sense that neither country takes part in the EU regarding cooperation on legal affairs. However, Denmark has entered into a parallel agreement with the EU enabling the Brussels (recast) Regulation to apply and has acceded to the Lugano Convention. By contrast, the hasty nature of Brexit has left Great Britain in a situation where the Brussels (recast) Regulation no longer applies, and ratification of the Lugano Convention is not yet complete.

Either of these steps would have kept in place a regime in which English jurisdiction clauses would have to be respected by the Danish courts. That is probably no longer the case, at least not until Great Britain accedes to the Lugano Convention.

Denmark and Great Britain have both, however, ratified the 2005 Hague Choice of Courts Convention, which does a lot of the same things. It applies to exclusive jurisdiction agreements, which are agreements that refer jurisdiction to one state only. This also means that if one court is seized of a case, then another court must dismiss or stay a case concerning the same dispute, until the court first seized has decided whether it can hear the case.

It is important to note, however, that the Choice of Courts Convention does not apply to:

• the carriage of passengers and goods;
• marine pollution, limitation of liability for maritime claims, general average, and
  emergency towage and salvage.

It would appear, therefore, that Danish maritime law is not affected by the Choice of Courts Convention.

The upshot of Brexit in Danish maritime law

Under the Danish Merchant Shipping Act (Søloven) s. 310 a claim may be commenced in Denmark – on a mandatory basis – against a carrier where

• the carrier has its principal place of business in Denmark
• the contract of carriage (bill of lading or sea waybill) was made, if the carrier has a branch or agency in Denmark
• the goods were received for transport in Denmark, or the place of delivery after transport was in Denmark. This applies even if the goods were not carried by ship prior to or after the ocean carriage, as long as such carriage is covered by a single contract of carriage. For example, a bill of lading nominating a place in Denmark as place of receipt, a port of loading in Germany, a port of discharge in the US and a place of delivery in Canada (or in the opposite direction) would be subject to Danish jurisdiction, even if the leg from (or to) Denmark was performed by truck.

The Danish Merchant Shipping Act will also apply as the chosen law on a mandatory basis to many of these claims, namely if:

• the place where goods were received for transport, or the place of delivery are in a state party to the Hague-Visby Rules. See above what is the place of receipt and delivery.
• the contract of carriage (bill of lading or sea waybill) was issued in a state party to the Hague-Visby Rules
• the contract of carriage chooses the law of a state party to the Hague-Visby Rules

Similar rules apply in Norway, Sweden (where IUNO is present) and Finland. 

Put simply

The Danish courts have jurisdiction, and the Danish Merchant Shipping Act applies to a carrier domiciled in Denmark or to carriers who carry goods to and from Denmark under a bill of lading or seawaybill.

But the Danish courts have to yield to a choice of jurisdiction or law under the Brussels (recast) Regulation or Lugano Convention. Jurisdiction and choice of law clauses in, for example, a CMA CGM or Hapag-Lloyd bill of lading would therefore have to be respected.

To the contrary, those carriers choosing English law and jurisdiction may find that they can no longer rely on this in the Danish courts. The most notable example of this is of course Maersk Line, which is domiciled in Denmark and could therefore be sued in Denmark in virtually all cases, were it not for their English law and jurisdiction clauses.

Another carrier which attracts attention is MSC, domiciled in Switzerland which has ratified the Lugano Convention. MSC refer to English law and jurisdiction in their shipping documents. But this convention requires that a jurisdiction clause identifies a court in a convention state and hence England does not (yet) qualify.

IUNO’s opinion

Multiple disputes and irreconcilable judgments are not desirable at the best of times. It would appear, however, that the present situation allows for cargo interests to pursue claims in Denmark against ocean carriers that refer to the English courts for settlement of disputes, which was not possible before. Cargo interests may find that this is advantageous as Danish law confers benefits on them compared to English maritime law, and in terms of costs.

IUNO recommends seeking legal advice legal proceedings are about to be commenced after Brexit and under the new rules.