Triggering the end of jurisdiction clauses?

by Victor Mata

One of the trending topics after the entry into force of the Spanish Maritime Act was the applicability of its article 468, regarding jurisdiction and arbitration clauses. Insurers, cargo interests and freight forwarders were some of the interested parties addressing questions to lawyers regarding the possibility of bringing proceedings against shipping lines before the Spanish Courts, ignoring jurisdiction clauses, since the Spanish Maritime Act intended to put an end to jurisdiction clauses which had not been specifically agreed between the parties. However, its wording expressly stated that the issue should be considered according to international conventions and EU Regulations. Much has been written on the subject since then, particularly given that the majority of the clauses have a link to London and its Courts.

At the end of 2016 a number of Commercial Magistrates met to consider (among other issues) certain aspects of transport law. Those Magistrates, having analysed article 468 of the Spanish Maritime Act, reached the conclusion that in European matters, Brussels I Regulation (recast) is to apply fully in relation to the determination of the validity of jurisdiction and arbitration clauses. As is well known, the said regulation provides that the clauses are valid if that they have been agreed by the contracting parties or in the event that they are in usage of which the parties are or ought to have been aware and which in such trade is widely known to parties to contracts of that nature. In non-European matters, Spanish Courts may have jurisdiction to analyse the validity of the clauses.

What is happening in practice since the Spanish Maritime Act became effective in relation to jurisdiction clauses? As a starting point, the analysis of whether a jurisdiction clause is effective “must be carried out individually for each specific case”. This principle has been expressed, at least on two occasions, by the Court of Appeal of Valencia. As a consequence, and after fully considering the facts governing the different matters which have been heard in Court, it has been interpreted either that the clause is valid (for instance, when a bill of lading has been issued and the claimant is a shipper –High Court of Valencia-; when the claim has been commenced by the insurer of a freight forwarder against the shipping line –High Court of Valencia-; or when the claim has been brought against the shipping line by the cargo insurers –High Court of Madrid), or that the clause is invalid (when damage arose prior to loading the container into the vessel –High Court of Valencia-, or when the claimant was a mere receiver of a shipment and was not a party to the bill of lading –High Court of Barcelona-).

However, a very interesting argument may appear in the near future. The High Court of Valencia decided in favour of the validity of a jurisdiction clause linked to the Courts of London as the United Kingdom “is, at present, a Member State as the departure of the United Kingdom from the European Union has not materialised”. The judgment was dated 8 November 2016.

It was not a real surprise that last March 29 2017 Brexit was triggered by the British Prime Minister. In the light of the current situation, the specific analysis which will be carried out by the Spanish Courts anytime that a forum non conveniens issue is raised may start bringing different conclusions when there is a UK-linked clause. We will have to see if, in fact, there is a change in the Magistrates mentality now that the disconnection process has commenced. It is now the time to wait and see if there is a real increase of claims in the next few months, or what will shipping lines with London jurisdiction clauses do with them. Whilst it is foreseeable that they might keep their current clauses, hoping that the United Kingdom reaches an agreement with the European Union, the Spanish Courts may have a different view when analysing the clauses.

If you require further information or advice regarding the contents of this article please contact Victor Mata whose details appear below.

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About the contributor

  • Victor Mata Abogado

    Victor is normally involved in handling personal injury files, contractual disputes and salvage proceedings.

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