Assignment of Contract Rights Remains Subject to Arbitration Clause

Schifffahrtsgesellschaft Detlev Von Appen GmbH v Voest Alpine Intertrading GmbH (QBD (CommCt)), NLD 16th April 1997

Commentary

This decision may no longer be 'news worthy' but nevertheless remains of interest to those engaged in international arbitration and litigation and merits a brief mention.

Decision

The following two aspects of the decision are worth noting. On the basis of a subrogation, the right to make claims under the sub-charter was assigned from the voyage charterer to insurers but the right to make claims was found to be subject to the terms of the sub-charter, including the arbitration clause. The transferred rights were accordingly enforceable only by arbitration. The time charterers were therefore entitled to an injunction preventing the assignee from proceeding with a court action in Brazil.

Once the substantive rights had been transferred to the insurers, there was a sufficient contractual relationship between them and the time charterers for the matter to fall within the scope of RSCOrder 11 rule 1(1)(d) and leave to serve the proceedings out of the jurisdiction to be granted.

Background

The matter arose from a fire on board the vessel Jay Bola in which considerable losses were suffered by cargo owners. Insurers indemnified the voyage charterer and took an assignment of rights against the time charterer. The ship owner commenced a limitation action in the Admiralty Court. Insurers however did not bring a claim in London but commenced proceedings in Brazil, which was not a party to the London Convention.

For further information on this topic please contact Neil Aitken,
Charles Spragge or Gregor Kleinknecht at CMS Cameron McKenna
by telephone (+44 171 367 3000) or by fax (+44 171 367 2000) or
by e-mail ([email protected] or [email protected] or [email protected]).