The English High Court has confirmed its commitment to exclusive jurisdiction clauses in a dispute involving an alleged wrongful arrest of a bulker by Idan Ofer's Eastern Pacific Chartering (EPC).
The Singapore company had sought to have a claim by Cypriot shipping company Pola Maritime thrown out in favour of proceedings in Gibraltar, but the Commercial Court stood firm and insisted it had a right to consider the case.
The dispute arose from a charter of EPC's 61,000-dwt bulker Divinegate (built 2019) by Pola Maritime in 2019.
The vessel was re-delivered after less than two months, but a row broke out over unpaid hire.
Pola Maritime said it was setting off various costs and expenses it claimed to have incurred during the course of the charter, which was governed by English law.
In order to secure its claims for money owed, EPC arrested the 37,000-dwt bulker Pola Devora (built 2012) in Gibraltar on 2 July 2020.
EPC said it did so on the basis of a Lloyd's List Intelligence report that described Pola Maritime as the beneficial owner.
However, the Cypriot company said it was merely the time charterer and the owner was Pola Rise OOO.
EPC released the vessel on 6 July, but has not conceded the ownership question and it denies the arrest was wrongful.
The company has claimed nearly $100,000 in the UK, while Pola Maritime has counterclaims of up to $139,000, plus a claim for damages of $54,000 in the wrongful-arrest dispute.
Cost of litigation will be high
Patricia Robertson QC, sitting as a deputy judge, said in her judgment that she did not wish to diminish the significance of the litigation for the parties.
But she added: "It will be immediately apparent from those figures that these sums ... are relatively modest by comparison with the likely costs of litigation in this court, never mind litigation in two different jurisdictions."
Robertson found that the wording of the exclusive English jurisdiction clause in the charterparty was sufficiently wide to permit Pola Maritime to make the wrongful arrest claim in the UK.
UK law firm Ince said the decision "confirms the English Court's commitment to upholding exclusive jurisdiction clauses and to construing them in a way that allows sufficiently related or connected claims to be dealt with in the same forum".
The company added: "In this case, the Gibraltarian proceedings were unlikely to go much further, so there was little risk of irreconcilable judgments."
No exclusivity in Gibraltar
The decision acknowledged that pursuant to the 1952 Arrest Convention, any claim for damages for wrongful arrest should be dealt with under the law of the place where that arrest took place.
But this did not mean that the Gibraltar Supreme Court also had exclusive jurisdiction, the court found.
It was clear that the purpose of the arrest in Gibraltar was to secure the claim under the charterparty that was to be brought in London, the judgment shows.
The court further held that the two sets of proceedings did not involve either the same cause of action or the same parties.
All this meant the deputy judge was not obliged to decline jurisdiction.
The court also emphasised that a "one-stop approach" in the English courts would be more efficient than siphoning off the claim to be dealt with at trial in Gibraltar.
