Tryggingarfelagio Foroyar P/F v CPT Empresas Maritimas SA, Court of Appeal - Admiralty Division, March 16, 2011,  EWHC 589 (Admlty)
|Resolution Date:||March 16, 2011|
|Issuing Organization:||Admiralty Division|
|Actores:||Tryggingarfelagio Foroyar P/F v CPT Empresas Maritimas SA|
Case No: 2009 FOLIOS 1434 AND 1612Neutral Citation Number:  EWHC 589 (Admlty)IN THE HIGH COURT OF JUSTICEQUEEN'S BENCH DIVISIONADMIRALTY COURTRoyal Courts of JusticeStrand, London, WC2A 2LLDate: 16/03/2011Before :THE HONOURABLE MR JUSTICE DAVID STEEL- - - - - - - - - - - - - - - - - - - - -Between :- - - - - - - - - - - - - - - - - - - - -Nigel Jacobs QC and Michael McParland (instructed by Waltons and Morse) for the ClaimantTimothy Brenton QC and Robert Thomas (instructed by Ince and Co) for the DefendantHearing dates: 17th to 20th January 2011- - - - - - - - - - - - - - - - - - - - -JudgmentThe Honourable Mr Justice David Steel : 1. This is a jurisdiction dispute. The Claimants say they should be entitled to continue with proceedings which they have instituted in Chile. The Defendants say that the parties have agreed to refer the issues that have arisen between them to arbitration in England and that thus the Chilean proceedings should be enjoined. The parties2. Thor Fisheries (``Thor'') is a Faroese company which owned a number of large factory trawlers including ATHENA, HERCULES and POSEIDON. In the early afternoon of 4 July 2007, a fire broke out on board ATHENA off the coast of Chile. The vessel thereafter proceeded under her own power towards Talcahuano, escorted by POSEIDON. The fire was not finally extinguished until 18 July 2007 by which time ATHENA was heavily damaged.3. The Claimant, Trygginfarfelagio Foroyar P/F (``TF''), were the hull and machinery underwriters of ATHENA. As a result of a settlement agreement reached in November 2007, TF agreed to settle Thor's insurance claim for repair costs in the sum of DKK 213, 122, 621 (US$ 37, 124, 886).4. Ullerup & Thalund APS (``U&T'') is a Danish firm of brokers. They were instructed by Thor to assist in obtaining outside assistance in fighting the fire. They acted in a manner independent from their principals. At all material times they were represented by Mr Ole Thalund.5. CPT Empresas Maritimas S.A. (``CPT'') are a towage and salvage company incorporated in Chile. By an agreement dated May 2003, CPT and Wijsmuller Salvage BVM (later called Svitzer Wijsmuller Salvage BV) (``Svitzer'') had agreed to co-operate in the promotion of salvage related services in Chile, Peru, Ecuador and the West coast of Columbia.The background6. In July 2007 ATHENA (together with a sister vessel POSEIDON) was operating in international waters in the Pacific about 650 miles off the coast of Chile.7. At about 1300 UTC hours on 4 July 2007 a fire broke out on the vessel. Her crew managed to confine the fire and POSEIDON was able to render assistance. Authorisation was granted by the Chilean Maritime Authority for the vessel to proceed to Chile. Most of her crew were evacuated but the vessel was left with sufficient crew to proceed back towards Talcahuano, Chile, under her own power under escort by POSEIDON. 8. Following negotiations between Svitzer, on CPT's behalf, and Thor, which were largely conducted by email and telephone through the offices of Mr Thalund, an agreement was made for the provision by CPT of salvage type services to ATHENA at daily rates. Both the timing and terms of the agreement were the subject of vigorous dispute.9. These proceedings arise from the dismissal of CPT's services by Thor on 11 July 2007 and their replacement by another Chilean salvage company, Ultragas. Following the settlement of the insurance claim, TF made a claim against CPT on the grounds that the damage sustained by ATHENA post the engagement of CPT was caused by the negligence of CPT in facilitating the re-ignition and spread of the fire.10. To that end, TF commenced proceedings in Santiago, Chile in November 2008 giving rise to mandatory arbitration proceedings pursuant to Article 1203 of the Chilean Commercial Code (``the Code''). The claim was in the amount of the entire repair costs. These proceedings were formally served on CPT in August 2009. In its written defence dated 9 October 2009, CPT contended that the services had been rendered under the terms of the BIMCO Wreckhire form which contained an English arbitration clause and that, accordingly, the Chilean arbitrator lacked jurisdiction to determine the claim.11. On the same basis, CPT sought and obtained an interim anti-suit injunction from Beatson J in November 2009. The application was originally commenced ex parte before Blair J. It was adjourned and at a subsequent ex parte hearing on notice before Beatson J TF made provisional submissions without prejudice to its entitlement to seek to set aside the order in the light of any fresh evidence. The Chilean proceedings have remained stayed thereafter.12. Following the grant of the anti-suit injunction, CPT sought a declaratory award on jurisdiction from Mr Simon Kverndal QC being one of the panel of arbitrators appointed to hear arbitrations under Lloyd's Open Form. He had been purportedly nominated by CPT under the provisions of Clause 18 of the BIMCO Wreckhire standard form of contract. Before the publication of Mr Kverndal's award, TF commenced this action pursuant to section 72 (1) of the Arbitration Act 1996 raising the question whether there was a valid arbitration agreement.13. This hearing is not concerned with the merits of TF's claim to damages but solely with the question whether or not there is an arbitration agreement between the parties as contained in clause 18 of the BIMCO Wreckhire terms. It is common ground that, if the services were rendered on those terms, CPT is entitled to an order for a final injunction.Witnesses14. TF called one witness to give oral evidence of fact. This was Mr Ole Thalund. As already noted, he was at the relevant time a director of U&T and acted as an intermediary broker in the negotiations between Svitzer and Thor. Whilst due to receive commission for his services, he was essentially acting, as he put it, as a post box.15. TF also put in a number of statements. These included two from persons within the management structure of Thor: first, Mr Jogvan Martin Joensen, Project Development Manager; second, Mr Per Gulklett, Marketing Director. Neither statement was other than sketchy and neither witness was tendered for cross-examination despite a request to that effect. No statement was provided from the Managing Director of Thor, Mr Gunnbjorn Joensen.16. TF also called its lawyer in the Chilean proceedings to give oral evidence relating to his experience of the terms upon which salvage type services were usually rendered in Chile.17. As regards CPT, a number of witnesses of fact were called:i) Mr Martin Hoogenstraaten, a commercial manager of Svitzer then based in Rio de Janeiro.ii) Mr Hendrik Land, a commercial manager of Svitzer based in Holland.iii) Mr Sjouke (John) De Vries, a contract/commercial manager in Svitzer based in Holland (who gave his evidence via video link).All three of these witnesses had given statements, in Mr Hoogenstraaten's case no less than three. (CPT also tendered a witness statement from Mr John Savignone, a member of CPT's salvage department.) 18. CPT also called:i) Mr Beltran Felipe Urenda, CPT's lawyer in the Chilean proceedings.ii) Captain Klaas Reinigert, a salvage consultant.Both touched on the issue of the use of standard terms of contract in both Chile and worldwide. 19. I was satisfied that all the witnesses were seeking to assist the court to the best of their recollection. In particular I reject the submission by TF that Mr Hoogenstraaten's evidence was dishonest. I also reject the submission by TF that the fact that Mr De Vries gave evidence by video link was unsatisfactory and had some bearing on the credibility of his evidence. In any event, as will become apparent, the determination of the primary issue in this case is dependent in large part on the content of a number of telephone calls between Mr Thalund and those in Svitzer's offices in Holland and Brazil on the one hand and those in Thor's offices in the Faroe Islands on the other nearly four years ago. 20. It is accordingly another paradigm case for applying the following dictum of Lord Goff in Grace Shipping v. Sharp & Co  1 Lloyd's Law Rep. 207 at p. 215-6:"And it is not to be forgotten that, in the present case, the Judge was faced with the task of assessing the evidence of witnesses about telephone conversations which had taken place over five years before. In such a case, memories may very well be unreliable; and it is of crucial importance for the Judge to have regard to the contemporary documents and to the overall probabilities. In this connection, their Lordships wish to endorse a passage from a judgment of one of their number in Armagas Ltd v. Mundogas S.A. (The Ocean Frost),  1 Lloyd's Rep. 1, when he said at p. 57:-"Speaking from my own experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses' motives, and to the overall probabilities, can be of very great assistance to a Judge in ascertaining the truth."That observation is, in their Lordships' opinion, equally apposite in a case where the evidence of the witnesses is likely to be unreliable; and it is to be remembered that in commercial cases, such as the present, there is usually a substantial body of contemporary documentary evidence.''21. A proper appreciation of the overall probabilities and of the possible motives of the participants, sufficient to resolve the conflict of evidence in this case as...
To continue readingREQUEST YOUR TRIAL