Spanish finding binding

National Navigation Code v Endesa Generacion SA [2009] EWCA Civ 1397; TLR 8 February

The defendants had commenced proceedings in the Mercantile Court in Almeira to arrest a vessel and claim damages for late delivery under a bill of lading for discharging a cargo of coal at a point short of the contractual point of discharge. The claimants commenced proceedings in the London Commercial Court claiming a declaration of non-liability and sought a stay from the Almeira court on the grounds that there was an arbitration clause incorporated by reference to a charter party in the bill of lading, alternatively that the Commercial Court was first seized. The Almeira court ruled that no arbitration clause was incorporated, refused to decline jurisdiction, but stayed proceedings pending the Commercial Court establishing its position as the court first seised. The first question was whether a judgment which was not on the merits that ruled that an arbitration clause had not been incorporated and that proceedings should not be declined for that reason was a judgment that must be recognised and enforced on jurisdiction and the recognition and enforcement of judgment in civil and commercial matters. A judgment on a preliminary ruling was a judgment within the regulation if it took place in proceedings, the main scope of which brought them within the regulation. Furthermore, a decision on whether an arbitration clause was incorporated into a contract would in most instances be very closely tied up with the merits of their contractual dispute where a court first had to ascertain what the terms of a contract were. A Regulation judgment could give rise to an issue estoppel as much in arbitration proceedings excluded from the regulation as in any other proceedings in an English court. The English court was bound by the decision that no arbitration clause was incorporated into the bill of lading. The appeal was therefore allowed and the arbitration proceedings dismissed.