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Transport

Spanish venue though jurisdiction clause did not apply

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Legal news
calendar 6 December 2020
globus Denmark

In this case the Court had to decide whether a claim for compensation between a shipowner and a shipyard could be heard in Denmark. The dispute concerned a jurisdiction clause in the shipyard’s general terms and conditions. The shipowner alleged this clause had not been agreed between the parties. The Court found that the jurisdiction had to be where the place of performance had been agreed and therefore the jurisdiction was in Spain.

A Danish shipowner entered into a contract with a Spanish shipyard regarding the repair of a ship. However, the shipyard experienced problems with one of their slipways, and the repair got delayed. As a result, the shipowner had to cancel a planned charter. When the repair had been completed, the parties disagreed on an outstanding payment to the shipyard. Therefore, the ship was arrested in Italy and the shipowner had to cancel another charter. As a result, the shipowner sued the shipyard for damages for loss of revenue for the two cancelled charters and for the delay in the repair and arrest of the vessel.

When entering into the contract, the shipowner had granted the vessel’s master authority to enter into agreements of no more than 10,000 euro. The master had corresponded with the shipyard about the estimate of the repair. When the yard sent the estimate, they attached their general terms of conditions. These conditions had a jurisdiction clause stating that any dispute between the parties should be settled in the Spanish courts.

The shipowner disagreed, claiming that they had not accepted the terms of conditions since only the ship’s captain had received them. The shipowner alleged that the master did not have authority to accept the conditions as part of the agreement. The shipowner then alleged that the dispute should be settled in Denmark as the shipowner was Danish. The economic loss had also occurred in Denmark, as the payment for the two charters should have been paid to a Danish account.

The Maritime and Commercial High Court: Venue at the place of performance of the contract

The Court found that the jurisdiction clause in the terms of conditions had not been adopted by the parties, as there was no valid written agreement. No reaction to a jurisdiction clause could not be considered an acceptance.

The Court also found that the dispute originated from the parties’ original repair agreement and so it was a claim for damages within the scope of the contract. The right venue was thus the place where the contract was to be performed. This was Spain, not Denmark. The Danish Court therefore dismissed the case.

IUNO’s opinion

The case shows that questions regarding a jurisdiction clause rely on small details. In this case there was a single reference in the “fine print”. This is not unusual, but it was not established that the shipowner was aware of this and had accepted it. IUNO recommends ensuring that jurisdiction is agreed as clearly as possible. It should at least be ensured that the counterparty has received and accepted the contractual basis on which the jurisdiction agreement is stated.

[The Maritime and Commercial High Court’s ruling in case BS-4721/2020-SHR of 1 September 2020]

 

A Danish shipowner entered into a contract with a Spanish shipyard regarding the repair of a ship. However, the shipyard experienced problems with one of their slipways, and the repair got delayed. As a result, the shipowner had to cancel a planned charter. When the repair had been completed, the parties disagreed on an outstanding payment to the shipyard. Therefore, the ship was arrested in Italy and the shipowner had to cancel another charter. As a result, the shipowner sued the shipyard for damages for loss of revenue for the two cancelled charters and for the delay in the repair and arrest of the vessel.

When entering into the contract, the shipowner had granted the vessel’s master authority to enter into agreements of no more than 10,000 euro. The master had corresponded with the shipyard about the estimate of the repair. When the yard sent the estimate, they attached their general terms of conditions. These conditions had a jurisdiction clause stating that any dispute between the parties should be settled in the Spanish courts.

The shipowner disagreed, claiming that they had not accepted the terms of conditions since only the ship’s captain had received them. The shipowner alleged that the master did not have authority to accept the conditions as part of the agreement. The shipowner then alleged that the dispute should be settled in Denmark as the shipowner was Danish. The economic loss had also occurred in Denmark, as the payment for the two charters should have been paid to a Danish account.

The Maritime and Commercial High Court: Venue at the place of performance of the contract

The Court found that the jurisdiction clause in the terms of conditions had not been adopted by the parties, as there was no valid written agreement. No reaction to a jurisdiction clause could not be considered an acceptance.

The Court also found that the dispute originated from the parties’ original repair agreement and so it was a claim for damages within the scope of the contract. The right venue was thus the place where the contract was to be performed. This was Spain, not Denmark. The Danish Court therefore dismissed the case.

IUNO’s opinion

The case shows that questions regarding a jurisdiction clause rely on small details. In this case there was a single reference in the “fine print”. This is not unusual, but it was not established that the shipowner was aware of this and had accepted it. IUNO recommends ensuring that jurisdiction is agreed as clearly as possible. It should at least be ensured that the counterparty has received and accepted the contractual basis on which the jurisdiction agreement is stated.

[The Maritime and Commercial High Court’s ruling in case BS-4721/2020-SHR of 1 September 2020]

 

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Christopher Whitta-Jacobsen

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