On 12 April 2007, the Danish Supreme Court rendered a leading judgment on the interpretation of a Himalaya clause in a jurisdictional dispute. The Supreme Court, reversing the Danish Maritime and Commercial Court's judgment of 31 October 2005, thus found that the Himalaya clause in question related to liability only and therefore could not be relied on by the sub-carriers in respect of the jurisdiction clause of the bill of lading.
The facts of the case, which are evident from the Maritime and Commercial Court's judgment of 31 October 2005 in case S-22/03, were as follows:
A consignment of blankets had been sold C&F Monrovia and was to be carried by sea from Italy to Monrovia. When the containers had been loaded onto the ship, M issued a bill of lading under the title "Contract of Carriage", which included a jurisdiction clause stipulating that all proceedings concerning the bill of lading were subject to the jurisdiction of London courts.
In addition, the bill of lading contained a so-called Himalaya clause reading as follows:
"LIABILITY OF SERVANTS AND SUB-CONTRACTORS. It is hereby expressly agreed that no servant or agent of the carrier, including any independent sub-contractor employed by the Carrier in any circumstance whatsoever be under any liability whatsoever to the Merchant for any loss or damage or delay of whatsoever kind arising or resulting directly or indirectly from any act, neglect or default on his part while acting in the course of, or in connection with his employment and without prejudice to the generality of the ongoing provisions in this clause, every exception, limitation, condition and liability herein contained and every right, exception from liability, defence and immunity of whatever nature applicable to the Carrier or to which the Carrier is entitled hereunder shall also be available and shall extend to protect every such servant or agent of the Carrier (including any stevedore, terminal operator or any other independent contractor) acting as the aforesaid and for the purpose of the foregoing provisions of this clause the Carrier is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be his servant or agent (including all independent contractors as aforesaid) and all such persons shall to this extent be or be deemed to be party to this Bill of Lading. …."
During transit, the blankets were reloaded onto another ship on which M had 30 container slots at its disposal according to an agreement with T. T had time-chartered the ship from H. In the port of Monrovia, the ship capsized before the blankets had been delivered to the consignee, and the blankets were lost. The insurer of the goods (F) indemnified the consignee (R) and was subrogated to the consignee's claim for damages. Subsequently, F brought an action against T and H before the Danish Maritime and Commercial Court, submitting that pursuant to the Danish Administration of Justice Act, the Danish courts had jurisdiction over both defendants.
The defendants claimed that the action be dismissed, submitting that F's claim was based on the bill of lading, which contained a valid jurisdiction clause applying also to intermediate contracting carriers due to the Himalaya clause. In addition, the defendants submitted that the case was not related to Denmark in any way except that it was R's domicile.
The Maritime and Commercial Court's judgment was rendered by a unanimous court which found that irrespective of whether the C&F vendor was deemed to have acted as an independent party or as an agent of R as regards the conclusion of the contract of carriage, R was to be deemed a party to the contract of carriage by sea whose contents were laid down in the bill of lading. Accordingly, the court found that the legal relationship between T and H on the one hand and F on the other hand was to be determined on the basis of the bill of lading, cf. the Himalaya clause and the principle in section 286(1) of the Merchant Shipping Act. As the matter was accordingly "a dispute arising on or in connection with this Bill of Lading" as stated in the jurisdiction clause of the bill of lading, the Maritime and Commercial Court found that the action should rightly have been brought before the court in London, and T and H were thus successful in their claim for dismissal.
As previously mentioned, the five Supreme Court judges unanimously reversed the Maritime and Commercial Court's judgment, establishing that neither T nor H appeared as parties in the bill of lading and that they could therefore rely on the jurisdiction clause of the bill of lading only if so provided by the Himalaya clause. However, according to the Supreme Court's interpretation, the Himalaya clause merely entitled the sub-carrier to assert the contracting carrier's limitations and rights in relation to liability. Thus, the Supreme Court did not find that the clause included a jurisdiction agreement and therefore reversed the Maritime and Commercial Court's judgment, referring the case to consideration on the merits.
The Supreme Court judgment can be seen as yet another indication that jurisdiction agreements must be specified very clearly in the parties' contractual basis in order for the courts to acknowledge their effect. Intermediate contracting or performing carriers are therefore well advised to study carefully the wording of any Himalaya clause and its application in relation to issues other than liability.
For further information regarding this judgment or any other issue in respct of transport law, please contact Lawyer Ulla Fabricius or Lawyer Sisse Friis Mikkelsen.