KDB Capital Corp v BHP Mitsui Coal Pty Ltd

[2007] FCA 1150

FEDERAL COURT OF AUSTRALIA

KDB Capital Corp v BHP Mitsui Coal Pty Ltd [2007] FCA 1150

KDB CAPITAL CORP, C & MERCHANT MARINE CO LTD AND C & SHIPPING CO LTD v BHP MITSUI COAL PTY LTD, BM ALLIANCE COAL OPERATIONS PTY LTD, BM ALLIANCE COAL MARKETING PTY LTD AND CARMEL JACOBSEN
NSD 1223 OF 2007

ALLSOP J
27 JULY 2007
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1223 OF 2007

BETWEEN:

KDB CAPITAL CORP
First Plaintiff

C & MERCHANT MARINE CO LTD
Second Plaintiff

C & SHIPPING CO LTD
Third Plaintiff

AND:

BHP MITSUI COAL PTY LTD
First Defendant

BM ALLIANCE COAL OPERATIONS PTY LTD
Second Defendant

BM ALLIANCE COAL MARKETING PTY LTD
Third Defendant

CARMEL JACOBSEN
Fourth Defendant

JUDGE:	ALLSOP J
DATE OF ORDER:	27 JULY 2007
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The proceeding stand over for directions to 3 March 2008 at 9.30 am.

2.Liberty to apply by any party, including the defendants, on 5 days’ notice.

3.The plaintiffs inform the defendants of the existence of the proceedings by providing a copy of the pleadings, or some other appropriate method.

4.If any defendant would wish to activate its rights in these proceedings, notwithstanding that it has not been served, leave is granted for that defendant to approach the Court to activate proceedings, particularly for any stay sought under the New York Convention.

5.At the time of notifying the defendants of the existence of the proceeding, terms of these orders also be made available, together with a settled copy of my reasons.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1223 OF 2007

BETWEEN:

KDB CAPITAL CORP
First Plaintiff

C & MERCHANT MARINE CO LTD
Second Plaintiff

C & SHIPPING CO LTD
Third Plaintiff

AND:

BHP MITSUI COAL PTY LTD
First Defendant

BM ALLIANCE COAL OPERATIONS PTY LTD
Second Defendant

BM ALLIANCE COAL MARKETING PTY LTD
Third Defendant

CARMEL JACOBSEN
Fourth Defendant

JUDGE:	ALLSOP J
DATE:	27 JULY 2007
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is the first return date of this matter. The claim is one under s 4(3)(b) of the Admiralty Act 1988 (Cth). The claim is one in the order of over $US300,000 in which the plaintiffs, being the owner and charterer, respectively, of the ship “Great Polaris”, claim in general average and under a general average bond against the defendants.  The ship is a bulk carrier which loaded coal in Queensland at Hay Point for carriage to Gijon in Spain.

2. There was a grounding in or near the Suez Canal which led to the need for tugs and other repairs and general average was declared.  Repairs were undertaken and during that course of events a general average bond was entered.  There was a guarantee of the general average bond by a French insurer.

3. The defendants have not been served.  The plaintiffs sought by communication with my Chambers that the matter stand over for a period of months to enable the matter to resolve otherwise in other parts of the world.  I indicated through my Chambers that I was not prepared to take this course without some discussion.  Mr Cox has attended today and appears for the plaintiffs.  He informs me that the defendants have not been served but he understands that they probably know of the commencement of the proceedings.

4. It is said that the proceedings were commenced to ensure that a possible time bar arising from the terms of the bill of lading and the date of the average adjustment did not expire.  It is ordinarily not appropriate for matters to be filed in the Court’s Registry invoking the exercise of judicial power and to have those proceedings deliberately not served.

5. There is apparently a possible suit against the French insurer in France.  Matters are also proceeding at some level, either judicial or non-judicial, in Switzerland, and I am informed that there is a London arbitration clause in the average bond.  The parties to the arbitration clause, I am told, may not be or are not any of the defendants.  Nevertheless, an issue at some stage may arise in relation to the operation of the International Arbitration Act 1974 (Cth) and any stay under that Act pursuant to the adoption by Australia in that Act of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) “the New York Convention”.  Likewise, if there is a competing arbitration clause which might be seen to be in conflict with the commencement of these proceedings, there might conceivably be grounds for an anti-suit injunction in London. 

6. I caused the matter to be listed today because I wished that my desire that the defendants at least be informed of the existence of these proceedings be clear.  This can occur in a way that is thought appropriate by the plaintiffs, whether by sending the process to the defendants otherwise than by attempted service, or some other means.  I think this is an appropriate course because it then enables the defendants to understand whether they wish something to be done about these proceedings.

7. The other reason I thought it appropriate to bring the matter into the public domain was to ensure this Court’s position in relation to any view that might be taken of an assumption of jurisdiction in the face of any arbitration clause. If there is an arbitration clause which is in conflict with these proceedings, s 7 of the International Arbitration Act is clear in its terms and operation: see Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45.

8. Therefore, on the conditions that I will identify, I am prepared to stand the matter over to a date early in 2008 with liberty to apply.

9. Mr Cox informs me that the bills have a charterparty incorporation clause.  Whether or not that is wide enough to incorporate the arbitration clause in the charterparty may be open to the usual debate, however, it may be another ground for the incorporation of a London arbitration clause.  Therefore, in those circumstances I make the following orders:

   (1)the proceedings stand over for directions to Monday, 3 March 2008 at 9.30 am;

   (2)liberty to apply by any party, including the defendants, on five days’ notice;

   (3)the plaintiffs inform the defendants of the existence of these proceedings by providing a copy of the pleadings or by some other method;

   (4)if any defendant would wish to activate its rights in these proceedings, notwithstanding the fact that it has not been formally served, leave is granted for that defendant to approach the Court to activate proceedings, particularly for any stay sought under the New York Convention;

   (5)at the time of notifying the defendants of the existence of the proceeding, terms of these orders should also be made available, together with the settled copy of my reasons.

10. The Court is alive to the necessity not to cause the accumulation of costs when it is unnecessary but the defendants are at least entitled to understand that the proceedings has been commenced and if they wish to take steps in them they can.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

Associate:
Dated:        10 August 2007

Counsel for the Plaintiff:	Mr E Cox
Solicitor for the Plaintiff:	Brian White & Associates
Date of Hearing:	27 July 2007
Date of Judgment:	27 July 2007