Evidenced in writing

Evidenced in writing

TRADITIONALLY, in Italy, carriers have had substantial problems in enforcing the jurisdiction clauses contained in their bills of lading. In fact, Article 2 of the Italian Code of Civil Procedure did not allow Italian parties to accept foreign jurisdictions. Moreover, Italian courts were reluctant to consider the jurisdiction clause in a bill of lading as a "widely known and regularly observed usage" in international maritime trade pursuant to article 17.1 (c) of the 1968 Brussels Convention. Therefore, such jurisdiction clauses were often declared null and void.

However, as Andrea Salesi and Alessandro Pesce of Pesce & Associati point out, the situation now seems to be changing. Article 2 of the Code of Civil Procedure was abrogated by law no. 218/1995, which also reformed the formal requirements of the jurisdiction clauses. They no longer need to be agreed in writing but merely have to be evidenced in writing.

As a consequence, some very recent decisions have declared that the jurisdiction clauses are valid and enforceable, even if the shipper has not signed the relevant bills of lading. In particular, it has been held that the consignee accepted to derogate the Italian jurisdiction by negotiating the bill of lading containing the mentioned clause. The formal requirements provided by the law no. 218/1995 have been met, because written evidence of the jurisdiction clause had been given to the court by exhibiting the bill of lading which contained the clause.

Not surprisingly, the reform of the Italian legislation contributed also to a more favourable attitude by the courts towards the jurisdiction clauses governed by 1968 Brussels Convention (now replaced by European Regulation no. 44/2001). In fact, some decisions have acknowledged that in the sea transport business the bills of lading are commonly issued by the carrier's agents and are not signed by the shippers. Such practice has been regarded as a commercial usage which all the maritime operators should know. Therefore, the validity of the jurisdiction clauses in the bills of lading has been affirmed on the basis of article 17.1 (c) of the said convention.

The above mentioned decisions may be appreciated both because the courts proved to be aware of the international maritime practices and because they lead to similar solutions, irrespective of whether Italian domestic law or EU law applies. The outlined trend, however, is not yet shared by the majority of the Italian courts and, in particular, has not yet been tested by the Court of Cassation. Therefore, Italy is still far from being a safe place for the carriers who wish to litigate in their own jurisdictions.

Institute Hull Clauses under review

THE London-based Joint Hull Committee (JHC), a joint initiative by the International Underwriting Association and Lloyd's Underwriters' Association, has produced a consultative draft of its revised Institute Hull Clauses. The draft has been sent to various associations of underwriters, shipowners, brokers and claims practitioners, who have been invited to submit their own comments to the JHC.

Completion and distribution of the draft is in line with the schedule set out by the JHC as part of its plans to review the 1983 and 1995 Hull Clauses in order to bring them into line with current market practice. A key part of the JHC objective is appropriate consultation with the shipping and insurance industries.

Subject to satisfactory conclusion of the consultation and approval process, it is planned that the clauses will be released on November 1, this year. Although no far-reaching changes are anticipated, the JHC is keen to make the standard hull clauses as consumer-compatible as possible. JHC chairman Simon Beale says, "It is important that insurance wordings are not allowed to languish in the past."

The draft has been developed by JHC working groups, whose members have been drawn from underwriting and claims practitioners across the market, including brokers and average adjusters. Hill Taylor Dickinson are the lead lawyers on the project.