FRENCH SHIPPING LAW
and Antoine Guillemot
Aquasea Yachting v Steamship Mutual Underwriting (The African Queen)
Arbitration—arbitration clause—binding effect—subrogation—competence-competence principle—insurance—P&I Club—direct actions—third parties
As owner of the vessel African Queen, Aquasea Yachting (“the Member”) benefited from P&I cover with the Steamship Mutual Underwriting P&I Club (“the Club”), covering its members for, in particular, personal injuries suffered by the crew, within the conditions and limitations provided by the P&I Rules.
During a water-ski excursion, a member of the crew was injured by the propeller of a speedboat covered by the vessel’s entry. The Club gratuitously compensated the medical costs of the crewmember but refused full compensation of the claim. The Club’s position was that the incident was not covered by the P&I policy by reason of an express exclusion with respect to the practice of water-skiing.
The crewmember took action against the Member for the balance of his claim. Upon his application, the French Commercial Court authorised arrest of the vessel. In order to release the vessel, the Member accepted to settle and pay an agreed amount for the crewmember’s full claim. The Member thus became subrogated to the crewmember’s claim.
The Member then proceeded to bring claim before the French Commercial Court against the Club for recovery of the settlement payment. The Club challenged the jurisdiction of the French Commercial Court pursuant to the arbitration clause provided by the P&I Rules.2
The Member argued that the Commercial Court had jurisdiction to rule on the matter as, acting in the right of the crewmember following subrogation, the Member was not bound by the arbitration clause provided for in the P&I Rules. The Member specifically invoked subrogation in the rights of the third-party crewmember as a reason to exclude the arbitration clause, which clause was binding on the Member, but not on the crewmember.