Date: 20011024
Docket: T-1942-98
Neutral citation: 2001 FCT 1148
BETWEEN:
STELLA-JONES INC. and
AXA BOREAL ASSURANCES INC.,
Plaintiffs
- and -
HAWKNET LTD. and
SUNLIGHT COMPANIA NAVIERA S.A. and
SEBILAN COMPANIA NAVIERA S.A. and
THE OWNERS AND ALL OTHERS INTERESTED
IN THE SHIP MARIANA (Ex "ANEMELI"),
Defendants
(Delivered from the Bench at Montréal, Québec,
on Tuesday, October 23, 2001)
[1] This is a motion to stay the present action and to refer the claim to arbitration in London. The motion is brought by the defendants, the owners of the Mariana. The action itself is brought by the owners and shippers of a large cargo of telegraph poles which were shipped from Bécancour and Pictou, Nova Scotia to Lattakia, in Syria. Prior to that shipment being made, a booking note was entered into between the agents for the owners of the vessel and the plaintiff. That booking note was in writing. It was the standard "Conline" form of booking note and the relevant part of the signature page of it, which curiously is page 2, reads as follows:
It is hereby agreed that this Contract shall be performed subject to the terms contained on Page 1 and 2 hereof which shall prevail over any previous arrangements and which shall in turn be superseded (except as to deadfreight and demurrage) by the terms of the Bill of Lading, the terms of which (in full or in extract) are found on the reverse side hereof.
[2] It will be noted that that clause refers to the terms and conditions on page 1 and to the terms and conditions of the Bill of Lading, which is on the reverse. The actual copy which was signed, it is quite clear from the evidence, did not have page 1 attached to it and did not have the reverse printed on it. What was signed was a facsimile copy which had been transmitted by fax and neither the first page nor the reverse were so transmitted.
[3] In due course, after the signing of the "Conline" booking note, the cargo was loaded, as I have said, at Bécancour and Pictou and a Bill of Lading was thereupon issued. That Bill of Lading contains on its reverse a "Centrocon" arbitration clause. That clause is not part of the printed form of the Bill of Lading. It appears as an amendment to that printed form. It is typewritten in the margin at right angles to the printed text. It is the terms of that clause which the present motion seeks to enforce by staying this action and referring it to arbitration in London. It reads as follows:
THIS BILL OF LADING IS GOVERNED BY ENGLISH LAW. ANY DISPUTE OR CLAIM TO BE SETTLED IN ARBITRATION IN LONDON UNDER ENGLISH LAW. CENTROCON ARBITRATION CLAUSE TO APPLY AND AMENDED SO THAT BOTH ARBITRATORS AND UMPIRE ARE MEMBERS OF THE L.M.A.A.
[4] The cargo of poles was in due course duly shipped to Lattakia and was in part off loaded when it was discovered that the plaintiff's purchaser, the Government of Syria, did not accept a certain quantity of the poles, namely those which were 12 meters long. The plaintiff was then in a situation where it had some valuable property sitting at dock side in Lattakia and had to do something with it. It again entered into negotiations with the agent for the owner. I may say that at some point at this stage, the owner and the name of the vessel changed, but in my view, absolutely nothing turns on that. The plaintiff entered, as I say, into negotiations with the owner's agent and a further agreement was concluded between them which took the form of an addendum to the booking note. This is how it reads:
Addendum to Booking note dated 3rd March 1998
It is hereby mutually agreed that the 12m poles will be reloaded and returned to Becancour, Canada on MV Anameli (to be renamed MV Mariana). Owners to mitigate costs for same as much as possible by taking other cargo. The balance of costs to be borne by Stella Jones Inc. which expect to be minimum $150,000USD.
Booking note logical amendments:
MV Anameli (being renamed Mariana)
Time for shipment about 20th May 1998
From Lattakia, Syria to 1 GSB AAAA Becancour, Canada (or other St-Lawrence port if later mutually agreed)
Freight rate not applicable, but all costs not covered by other cargo to be paid by Stella Jones. It is estimated that the return voyage costs will be in the region of $350,000 USD payable on receipt of invoices for expenses incurred from Hawknet. Available voucher copies for invoiced expenses to be
forwarded once received.
(s) Guy Walker (s) Joseph Kaddis
Guy Walker Joseph Kaddis
Hawket Ltd. Stella Jones
[5] The goods were then reloaded, the ship sailed from Lattakia and, in accordance with the terms of the amendment, she went in search of further cargo which she found in the Black Sea. On the return voyage from the Black Sea, while passing through the Bosphorus Strait, a fire occurred and it is as a result of that fire that the present claim is made by the plaintiff for alleged damages and other forms of relief.
[6] The issue, therefore, is to know whether or not the defendant, the owner, can claim recourse to arbitration in London to the exclusion of the jurisdiction of this Court. In my view, that issue is resolved by reference to the Commercial Arbitration Act and more particularly to the Commercial Arbitration Code, which is given force of law by the Act.
[7] The provisions of article 8 of the Code dictate that where the Court finds there to be an arbitration clause within the meaning of the Code, it has no discretion to exercise but must refer the matter to arbitration in accordance with that clause. Of critical importance to us here, are the provisions of article 7(2). That article reads as follows:
7(2) The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is in writing and the reference is such as to make that clause part of the contract.
[8] Here, it is quite clear that there was no arbitration clause in writing printed on the back of the booking note. It is quite clear also, indeed on the defendant's own evidence, that the terms printed on the back of the full booking note printed form were those of the standard "Conline" Bill of Lading. Those terms do not include an arbitration clause. The arbitration clause which it is sought here to enforce is, as I have already said, inserted as an amendment to the standard "Conline" Bill of Lading and "Conline" booking note and there is no evidence that the terms of that arbitration clause were ever signed and agreed to by the plaintiff. There is no reference to the "Centrocon" clause in any document signed by the parties.
[9] It is the defendant's burden as the one invoking the terms of the arbitration clause to prove that that arbitration clause was entered into and was in force and is enforceable in accordance with the terms of the Commercial Arbitration Code. In my view, it has failed in that burden.
[10] I would only add that I attach no particular significance to the evidence of previous dealings between the parties. I find that evidence to be inconclusive ; it does not demonstrate one way or the other, assuming that such evidence was relevant, that on all previous occasions the parties had always agreed to a "Centrocon" arbitration clause. There were occasions when they did and others when they did not.
[11] One other matter, I think, should be mentioned and that is that in my view, the terms and conditions of the return voyage were, except to the extent that they were varied by the addendum to the booking note, identical to the terms and conditions of the outbound voyage. I can see no other logical conclusion from the document which the parties themselves drew and signed as an "addendum" to the booking note and the detailed list of "logical amendments" thereto. And as I have said, in my view, the outbound voyage was not subject to the "Centrocon" arbitration clause ; the Bill of Lading issued for the outbound voyage was not in accordance with the written agreement between the parties in that it contained a "Centrocon" arbitration clause as an amendment to its printed terms.
[12] I accordingly conclude that the defendant has failed to prove a written agreement to arbitrate and that the motion must be dismissed with costs.
Judge
Ottawa, Ontario
October 24, 2001