The “Belo Horizonte”- Jurisdictional Challenges after Seizure of Evidence
The “Belo Horizonte”- Jurisdictional Challenges after Seizure of Evidence
A voyage of the “Belo Horizonte” from Argentina to the United Kingdom has lead to interesting decisions regarding jurisdiction over the claim for the surrender of evidence seized on board. The evidence was seized and preserved by a bailiff in the Netherlands. Parties domiciled in the Netherlands as well as the United Kingdom and Germany were involved. In two separate proceedings, the Rotterdam Court ruled that it had no jurisdiction over the claim for surrender of seized documents. On one hand, the decisions show that the presence of certain evidence within the Dutch jurisdiction does not necessarily mean that Dutch courts can be requested to order the evidence to actually be surrendered for inspection to the requesting party. On the other hand, the decisions show that the order of such surrender is no provisional or protective measure within the meaning of the Brussels I bis Regulation and must be distinguished from the gathering of evidence.
The decisions of the Rotterdam Court are a result of the carriage under bill of lading of soya beans on behalf of Cefetra B.V. (Netherlands based) on board of the “Belo Horizonte” from Argentina to the United Kingdom. Cefetra supplies raw materials to the feed, food, and fuel industries. Cefetra Ltd. (UK based) was the holder of the b/l’s and English law applied to the b/l’s. The vessel is owned by MS ‘IDA’ Oetker and is time chartered by Rudolf A Oetker (both German based, together addressed as Oetker). MS ‘IDA’ Oetker is the carrier under the b/l’s. London arbitration is agreed upon for any dispute rising from the contract of carriage and the b/l’s.
The “Belo Horizonte” sailed from the port of loading on 19 June 2015. Two days later, the vessel suffered engine failure and was towed back to Argentina for repairs. The repairs took some time and the voyage was not recommenced until 24 July 2015. Meanwhile, general average had been declared by the Owners on 30 June 2015. Cefetra suspected the engine failure was the result of a lack of seaworthiness at the beginning of the voyage. If Cefetra could prove the vessel was not seaworthy, Oetker’s general-average claim would be barred. Rule D of the York Antwerp Rules establishes that even though a right to a contribution shall not be affected by the fact that the event giving rise to the general average act was due to the fault of one of the parties, this shall not prejudice any remedies or defences which may be open against or to that party in respect of such fault. Whether a claim for a general average contribution can be brought successfully in spite of the claimant’s actionable fault is approached differently in the various jurisdictions and the same applies regarding the question whether defences can be raised to such claims for contribution and, if so, when. In the case law of the Netherlands the leading view is that defences can be raised against a claim for a contribution in general average and that there is no obligation to first settle the contribution and subsequently reclaim the same. In Dutch case law the “pay first, sue later”approach is not followed.
During the voyage, experts commissioned by both Cefetra and Oetker visited the “Belo Horizonte” to preliminary assess the condition of the vessel and its engines. Further investigation was conducted upon arrival in England. Oetker, however, only granted permission for inspection of the engine room and refused to disclose the documents on board. Crew interviews were not allowed as well. Subsequently, Cefetra obtained leave to attachment for the purpose of preserving evidence in the Netherlands on 27 October 2015. The leave was effected by the bailiff on 28 October 2015 on board of the “Belo Horizonte”. Several documents were seized and handed over to a sequestrator. Cefetra initiated proceedings which lead to the first decision of the Rotterdam Court.
Rotterdam Court, 30 October 2015[i]
Cefetra requested the Rotterdam Court to order a provisional expert’s opinion in order to inspect the seized documents and interview the crew. Cefetra and Oetker agreed that main proceedings should take place in London, which means Dutch courts do not have jurisdiction over the matter. However, pursuant to Article 35 Brussels I bis, the courts of any Member State may order provisional and protective measures. Cefetra argued that their request meets the standard for a provisional and protective measure as it aims to preserve the evidence.
Nevertheless, on 30 October 2015 the Rotterdam Court ruled that it has no jurisdiction over the request. Unlike Cefetra have argued, the provisional expert’s opinion is not a provisional or protective measure within the meaning of Article 35 Brussels I bis. Although the court appointed expert would have the right to inspect technical aspects of the vessel, he would not have the right to hear witnesses i.e. to interview the crew nor would he have the right to inspect the seized documents. Inspection of seized documents may only take place upon a court order being granted on grounds of article 843a of the Dutch Civil Procedure Code (“DCPC”), but this was not demanded by Cefetra. Cefetra’s request did not aim as much to preserve evidence as it aimed to make further inspection of the condition of the vessel possible.
Rotterdam Court, 13 December 2017[ii]
Following the decision of the Rotterdam Court on 30 October 2015, Cefetra filed a claim on grounds of article 843a of the DCPC in new proceedings. Cefetra demanded that (i) the seized evidence is surrendered to Cefetra, or (ii) either Cefetra or an expert may inspect the seized evidence, or (iii) Oetker provide copies of the documents Cefetra named in the claim, or (iv) the above is ordered under the condition that the stage of disclosure is reached in the main proceedings.
Oetker contested the jurisdiction of the Rotterdam Court since Oetker are not incorporated in the Netherlands and the main proceedings should take place in the United Kingdom. Cefetra argued that jurisdiction can be derived from either Article 7 or, again, Article 35 Brussels I bis.
Pursuant to Article 73(2) Brussels I bis in connection with Article II of New York Convention 1958, the Rotterdam Court held that it has no jurisdiction as parties have agreed to arbitration for disputes arising from the contract and b/l’s. Article 7 Brussels I bis is therefore irrelevant in this matter. Jurisdiction pursuant to Article 35 Brussels I bis is not effected by the arbitration clause, which is in line with the decision of the European Court of Justice in Van Uden/Deco-Line.[iii]
However, Cefetra’s claim again did not constitute a provisional or protective measure within the meaning of Article 35 Brussels I bis. Seizure of documents is considered a protective measure, but not the subsequent claim for surrender or inspection of the documents. Cefetra did not demand such in order to preserve evidence, but to assess its chances in main proceedings which has irreversible effect. The fact that the claim for surrender or inspection of the evidence is a logical follow-up of the protective measure of seizure, is not sufficient to make it a protective measure itself. As a result, the Rotterdam Court held that it has no jurisdiction under Brussels I bis. Cefetra’s claim was therefore dismissed.
The decisions of the Rotterdam Court are consistent with the line set out in Dutch case law and literature. Dutch courts are not reluctant to provide a forum in international matters, but refuse to make the Netherlands an ‘attachment paradise’. When it comes to claims where jurisdiction is based on Article 35 Brussels I bis, the standard is rather strict. It must be a provisional or protective measure and there must be a territorial connection between the matter and the forum.
The recent decisions show that the presence of evidence in the Netherlands does not necessarily mean that Dutch courts can order the evidence to actually be surrendered. The Rotterdam Court does not explicitly reject jurisdiction due to a lack of territorial connection, though it can be read between the lines. In a prior case with similar facts, the Rotterdam Court did explicitly reject jurisdiction on grounds of insufficient connection. According to the Court, the mere fact that seized documents are located in the Netherlands, or are expected to arrive in the Netherlands, is no sufficient territorial connection.
On the other hand, the recent decisions show that the surrender or inspection of seized evidence is no provisional or protective measure within the meaning of Brussels I bis. If the aim of the claimant is to gain insight in their chances in main proceedings, it can not be said that the measure is provisional or protective. According to the European Court of Justice in Reichert II[iv] and St. Paul Dairy[v], it must be a measure meant to preserve a factual or legal situation pending a decision of the court having jurisdiction as to the substance of the matter. Seizure of evidence is considered such a measure, surrender or inspection of evidence is not. Regarding the request for a provisional expert’s opinion (and for a provisional examination of witnesses), it is argued in Dutch literature that it is no measure within the meaning of Article 35 Brussels I bis, because it is gathering of evidence rather than preserving a factual or legal situation. For the gathering of evidence, other mechanisms exist, such as the Evidence Regulation and Convention.