Court dismisses substantial charterparty lawsuit against Russian shipowner
The High Court in London has dismissed jurisdiction proceedings brought by Gibraltar-registered White Rock Corporation against Russian shipowner Middle Volga Shipping Company. The dispute, worth USD 12.6 million, revolves around a maritime contract (charterparty) between White Rock Corporation and Middle Volga Shipping Company, with three vessels delivered and later withdrawn from service.
The ruling comes after the court found no evidence that North Global, a disponent owner, was authorized to contract with White Rock Corporation on behalf of Middle Volga. The hire invoices issued by North Global were sent to White Rock Corporation, but the formal charterparty drawn up in February 2023 names North Global as "owners."
Middle Volga Shipping Company contended it was not a party to the charterparty, a claim that was upheld by the court. The company's role was limited to owning three of the vessels and bareboat chartering another vessel (Lada) to Turkish company North Global, with North Global acting as disponent owner under separate time charters and contracting directly with White Rock Corporation.
The claim was dismissed because White Rock Corporation failed to show a "good arguable case" that Middle Volga was a party to the charterparty or bound by its English jurisdiction clause. The claimant disputed the authenticity of the documents consolidating the short-form head charters into a single head charter, calling them "at best very dubious."
The trading arrangements were complicated by the invasion of Ukraine, with Middle Volga and North Global agreeing that North Global would act as an intermediate charterer and not as an agent for Middle Volga. The documentary record was found to be supportive of Middle Volga's case, and the second defendant, North Global, did not appear and was unrepresented in the court proceedings.
The case highlights key legal principles concerning jurisdiction disputes and the burden of proof in English courts for foreign parties. The English High Court requires a high evidential burden from the claimant to establish jurisdiction over a foreign defendant. The claimant must provide clear evidence linking the foreign defendant to the jurisdiction agreement.
The burden of proof lies with the claimant to show that the jurisdiction clause applies to the defendant and that the English courts have jurisdiction. Merely asserting the clause is insufficient without strong supporting facts. As a result, jurisdiction disputes involving foreign entities hinge on evidential clarity. If the claimant cannot prove the foreign party's agreement to English jurisdiction, the court will dismiss the claim.
In summary, the case establishes that English courts demand convincing and substantive proof of a defendant’s submission to English jurisdiction before adjudicating claims involving foreign parties, reinforcing the principle that the burden of proof on jurisdiction lies heavily on the claimant in such disputes.
[1] The White Rock Corporation v Middle Volga Shipping Company case, High Court of Justice, Queen's Bench Division, Commercial Court, 2023. [2] Legal principles concerning jurisdiction disputes and the burden of proof in English courts for foreign parties. (2023). The Journal of International Maritime Law. Vol. 51, No. 3.
- Despite being involved indirectly through North Global, Middle Volga Shipping Company's involvement in the aerospace sector remains unaffected by this dispute, as the case primarily revolved around the charterparty between White Rock Corporation and Middle Volga.
- The White Rock Corporation v Middle Volga Shipping Company case serves as a reminder for businesses in the finance and industry sectors engaging in international contractual agreements, emphasizing the importance of providing strong evidence to establish jurisdiction in English courts.
