According to the plaintiffs, this damage establishes for them a cause of action secured by maritime lien under section 6 of the Admiralty Law Court Act of 1840; under section 6 of the Admiralty Law Court Act of 1861; and under the provision of section 41 of the Shipping (Vessels) Law, 5720-1960 .
- The ship's owner appeared on behalf of the ship (see power of attorney dated October 5, 2023). On November 7, 2023, the ship's owner filed a motion to stay the proceedings in this court (Application No. 7). In the application, it was claimed that the letters of undertaking signed by the plaintiffs included a unique jurisdiction clause, according to which all disputes relating to the plaintiffs' obligation to participate in the general damage payments would be heard only in the courts in London. In its application, the shipowner relied on the provision of section "C"To the letter of undertaking, which is as follows:
That this agreement shall be governed by English law and High Court of Justice of England and Wales shall have exclusive jurisdiction over any dispute arising out of this agreement and each party shall irrevocably submit to the jurisdiction of that court.
The shipowner further argued that the filing of the supplement to this court, after the plaintiffs had signed the undertakings, constitutes bad faith conduct (Request 7 is hereinafter: Request for a stay).
- In response to the request for a stay, the plaintiffs argued that the grounds in the addition of the claim in this case are not included in the grounds to which the jurisdiction clause applies. It was argued that the plaintiffs relied on the provisions of the cargo transportation agreements. It was argued that a distinction should be made between the claim for participation in the general damage, which is conducted between all the cargo owners who were on the ship, and the claim of a cargo owner against the maritime carrier. It was argued that when the cargo owner claims that the ship was unfit for sailing, his claim is based on the transport agreements, the bills of lading and the provisions of the Hague and Visby Rules that apply to sea transport. These claims must be clarified between the cargo owner and the sea carrier, and the cargo owner's undertaking to participate in the general damage payments does not detract from the causes of action against the sea carrier.
The plaintiffs also referred to a number of decisions in English courts that determined, so it was claimed, that disputes between the cargo owner and the sea carrier would be resolved in the courts in accordance with the usual powers, regardless of the place of jurisdiction of the claim for participation in the general damage payments. The plaintiffs also argued that there is no difference between a claim that the sea carrier is entitled to file against the cargo owner for payment of the transportation fees, and the cargo owner's claim for compensation for the damage caused to him due to the fact that the ship was unfit for sailing. These claims will be clarified in a separate proceeding according to the powers established by law.
- The ship's owner responded to the plaintiffs' arguments and argued that the petition for declaratory relief according to which the plaintiffs are exempt from participation payments in general damage, and the petition to obligate the ship and its owner to indemnify the plaintiffs for any contribution payment they will be charged, are "inherent" to the general damage proceedings. According to her, the proceedings should not be separated, and therefore the jurisdiction clause included in the undertaking also applies to all of the plaintiffs' claims. It was argued that the plaintiffs took upon themselves all the provisions of the letters of undertaking and did not object to them, and thus expressed their consent to the jurisdiction clause. It was argued that the wording of the jurisdiction clause in letters of undertaking is broader than the wording of the jurisdiction clauses that were included in the judgments to which the plaintiffs referred, and therefore no conclusions should be drawn from them regarding the validity of the stipulation in the present case.
- Before the request for a stay was discussed, the shipowner also filed a motion to dismiss the additional claim in limine (Application No. 12). In its application, the shipowner argued that the plaintiffs' petition is for "defensive declaratory relief", i.e., for a declaration that they are not obligated to pay a contribution to the general damage. It was argued that since the extent of the plaintiffs' participation in the general damage payments has not yet been determined, and the amount they must bear has not yet been determined, there is no room to discuss the defense arguments that the plaintiffs may face if they are required to pay their share. Moreover, it was argued that if the plaintiffs did not pay their share of the general damage payment, proceedings would be taken against them in the competent court in London.
It was argued that the rule is that the court does not usually grant declaratory and defensive remedies, and therefore the claim should be dismissed out of hand.
- It was further argued in the application that this court, sitting as a seaman's court, lacked jurisdiction to hear the addition of the claim. It was argued that a claim for participation in general tort payments does not constitute a claim for relief payments the jurisdiction to hear is set forth in section 6 of the Admiralty Act of 1840. It was further argued that a demand for payment of participation in general damage does not constitute "damage to cargo", and therefore is not included in the court's jurisdiction under section 6 of the Admiralty Act of 1861 or under Section 41 of the Shipping (Vessels) Law.
- The plaintiffs filed a response to the motion for dismissal and argued that according to the courts' rulings, a petition for defensive declaratory relief could also be discussed, in appropriate circumstances. In the present case, taking into account the fact that the shipowner does not deny that it intends to demand payment of the contribution from the plaintiffs, there is no impediment to hearing the petition for defensive relief. It was further argued that according to the correct interpretation of the provisions of the Admiralty Acts of 1840 and 1861 and the provisions of the Sections 41 According to the Shipping (Vessels) Law, the court has jurisdiction to hear the claim. It was argued that the term "damage to cargo" is interpreted extensively, and in any event, the claim can be changed from a claim by Hefza to a claim by a man against the owner of the ship.
- In a hearing held on March 12, 2024, the parties reiterated their arguments. During the hearing, counsel for the plaintiffs clarified that he had filed the claim out of concern that if he waited for the determination of the correspondence for the plaintiffs' share in the general damage, the shipowner might raise statute of limitations claims against them, since the substantial limitation period under the Hague-Visby Rules is only one year (section III(6) To The Hague Visby Rules included in the addendum of Transportation of Goods by Sea Ordinance).
- In light of the court's comments, the plaintiffs' counsel announced that he agrees "[...] that the claim will be limited to the claim of indemnity only." (p. 4, line 18). At the end of the hearing, the ship's owner was given the opportunity to submit a supplementary argument, which was indeed submitted.
Discussion and Decision
- In light of the plaintiffs' counsel's statement at the hearing, it remains to discuss only the plaintiffs' claims for a declaration regarding their right to indemnification for a payment that they will be required to pay by participating in the general damage following the incident, and there is no need to discuss the petition for defensive declaratory relief. As will be detailed below, I have reached the conclusion that the unique jurisdiction clause included in the undertaking agreements does not apply to the claim for indemnification, and therefore the proceedings should not be delayed. I also found that this court has substantive jurisdiction to hear the claim.
I will note that in view of the reduction of the remedies to which the plaintiffs are petitioning, there is no need to discuss the additional arguments raised in the motion for a stay and in the motion for dismissal, and therefore I will refrain from addressing these arguments. I will begin the discussion with a few general comments regarding the nature of a claim for participation of a cargo owner in general damage, then I will examine the court's authority to hear the indemnification claim, and finally I will discuss the request for a delay.