MARITIME LAW
Practice
Motions by defendant Chemex Ltd. (Chemex), charterer of vessel Tuapse, and defendant Novorossiysk Shipping Co. (Novoship), owner of Tuapse, for stay in favour of London arbitration, pursuant to terms of charter party, bills of lading incorporating charter party, Commercial Arbitration Code, art. 8 contained in Commercial Arbitration Act—Stay sought against plaintiff Dongnam Oil & Fats Co. Ltd. (Dongnam), owner of part cargo of edible oil carried on Tuapse—In May 2001, Novoship time-chartered vessel to defendant Chemex under charter party containing London arbitration clause—In May 2002, Chemex sub-chartering vessel to plaintiff Dongnam for carriage of yellow grease, bleachable tallow from Newark, New Jersey to Inchon, Korea—Sub-charter on Vegoil voyage charter form, with amended arbitration clause providing for settlement of disputes in London under English law—Two bills of lading issued, both incorporating voyage charter party between Chemex, Dongnam—Plaintiff claiming breach of charter party, damage to cargo, in nature of steam, water damage and dilution, during vessel-to-vessel transshipment (with cargo never touching shore or dock) at Nanaimo, British Columbia from Tuapse to Chembulk Clipper—Chemex in fact successful in arbitration proceedings commenced in London, winning, among other things, award of dead freight—Awards final as not appealed—Plaintiff refusing to pay arbitration awards—Plaintiff arguing action should not be stayed in favour of London arbitration based on Marine Liability Act, s. 46—None of parties herein having any connection with Canada; contract not made in Canada—However, plaintiff submitting transshipment at Nanaimo constituting loading or discharging at port in Canada within meaning of Act, s. 46—Chemex’s motion for stay granted—Act, s. 46 not extending to transshipment; no loading took place—Loading joint obligation, process involving both cargo interest, shipowner—Here, pure transshipment between adjacent vessels, without any of usual aspects of loading—Narrow interpretation of legislation called for where encroachment or impingement upon commercial activity or contractual rights of strangers, who do not clearly and manifestly fall within legislation in question—Act, s. 46 restriction on freedom of contract, thus should be interpreted strictly—No subjects, citizens or residents involved herein; principals offshore companies finding themselves, at suit of plaintiff, in Canadian Federal Court action dependent upon Canadian statute, designed to facilitate activities of those having connection with Canada—Parliament did not wish to abolish, limit or interfere with rights of those companies unless clearly coming within bounds of legislation—H.B. Contracting Ltd. v. Northland Shipping (1962) Co. Ltd. (1971), 24 D.L.R. (3d) 209 (B.C.C.A.) applied—Act, s. 46(2) not applicable, as no evidence of any agreement, and as agreement under Act, s. 46(2) presupposing jurisdiction in Canada under Act, s. 46(1), plus agreed departure from that jurisdiction—With respect to incorporation of charter party arbitration clause in bills of lading, must be determined whether arbitration clause effectively incorporated into bills of lading; whether arbitration agreement clause, “null and void, inoperative or incapable of being performed,” according to Commercial Arbitration Code, art. 8(1): Thyssen Canada Ltd. v. Mariana (The), [2000] 3 F.C. 398 (C.A.)—Clearly agreement in charter party between Chemex, Dongnam, for London arbitration, thus effectively calling for stay between them in favour of London arbitration: Mariana, at para. 24—However, Novoship not entitled to rely on charter party London arbitration clause incorporated, by reference, into bills of lading—Rena K, The, [1979] 1 All E.R. 397 (Q.B.), applied: bill of lading incorporation wording general, not referring to arbitration, thus insufficient to import arbitration clause from charter party into bill of lading; no reference in charter party arbitration clause to arbitration under bills of lading—Therefore, Novoship’s motion for stay denied —Commercial Arbitration Code, being Schedule to the Commercial Arbitration Act, R.S.C., 1985 (2nd) Supp.), c. 17, s. 8—Marine Liability Act, S.C. 2001, c. 6, s. 46.
Dongnam Oil & Fats Co. v. Tuapse (The) (T-1843-02, 2004 FC 1732, Hargrave P., order dated 10/12/04, 25 pp.)