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JURISDICTION – BILLS OF LADING – BREACH OF HIMALAYA CLAUSE – BREACH OF EXCLUSIVE JURISDICTION CLAUSE – ONEROUS OR UNUSUAL TERMS

1. Summary and Facts:

Maersk Guinea-Bissau Sarl and Another v Almar-Hum Bubacar Balde Sarl [2024] EWHC 993 (Comm) the dispute arose from the contracts between Maersk A/S (“the Claimant”) and Almar-Hum (“the Defendant”) for the shipping of timber from Guinea-Bissau to Huangpu in December 2018, evidenced by 13 bills of lading issued by Maersk Guinea-Bissau. However, the bills were not finalized before the cargo arrived in March 2019 due to lack of approval from Almar-Hum. Amid the Defendant’s financial disputes with various authorities, Maersk Guinea-Bissau was ordered to issue and hand over the bills of lading to the Guinea-Bissau court until a third party settled the debt.

Pursuant to that event, the Defendant brought legal actions in Guinea-Bissau against Maersk GB, which led to injunctions, seizure of its bank accounts, assets and a judgment over 10 million USD. In response the Claimants initiated the proceedings in English courts, arguing that the defendant was in breach of an exclusive jurisdiction clause in favor of the English Court and a “Himalaya Clause”.

2. Legal Issues:

  • Whether Maersk’s standard terms formed part of the relevant contracts of carriage between the parties; and
  • Whether the standard terms were onerous and unusual and therefore required greater notice of their inclusion than Maersk A/S had provided.

3. Court’s Findings:

The Court concluded that Almar-Hum was liable for damages or indemnity for breach of the Himalaya and exclusive jurisdiction clauses in the relevant contracts of carriage. Based on the ground that: –

  • The contract of carriage was on the claimant’s standard bill of lading terms under which the carrier was the claimant;
  • The Claimant had given plentiful notice of its standard bill of lading terms which the Defendant had accepted by ticking boxes during the booking process notwithstanding the fact that the draft bills of lading has also been supplied in advance so that the bills are in compliance;
  • On this basis the terms of the bills of lading were found to be not onerous or unusual. Therefore, argument that Maersk’s standard terms were onerous and unusual in their entirety was unsustainable; and
  • Hence, it was found that Maersk A/S and Maersk GB were both entitled to enforce the Himalaya clause as well as the exclusive jurisdiction clause.

4. Practical Implications:

This decision reinforces strong legal effect to jurisdiction clauses and standard contractual protections. Whereas:-

  • It reinforces the protective effect of contractual jurisdiction agreements and ensures that parties cannot easily circumvent them by obtaining judgments in alternative forums; and
  • It confirms that such clauses are not merely defensive tools but can also be relied upon to bring claims for breach including damages.

The decisions has increased the legal certainty in global shipping by ensuring that companies and their local branches are protected.

If you need more information on our legal updates, our Knowledge and Law News Division at lawnews@yhalaw.com.my would be pleased to assist.

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