Spain opens its doors

OBTAINING the validity of foreign jurisdiction clauses in bills of lading has been a long, hard battle for many maritime practitioners in Spain. Traditionally, Spanish courts have been reluctant to accept foreign jurisdiction clauses, despite the parties agreeing in the bill of lading to refer their disputes to a particular court. After many years, however, the position has at last started to change.

Over decades, the Spanish Supreme Court has ruled that jurisdiction clauses are only valid and binding if expressly agreed by the cargo interests. In practice, this entailed the bill of lading being signed by the shippers and/or the receivers, a requirement unthinkable in other countries with a similar maritime tradition. This was clearly contrary to the usual practice in shipping and transport. The result was that all attempts by owners to challenge the jurisdiction of the Spanish courts usually failed, unless they were able to demonstrate that the claimants had expressly agreed to the jurisdiction clause and had waived their own jurisdiction in a clear manner.

Fortunately, the efforts of owners and P&I clubs are now bearing fruit, and nowadays Spanish courts of first instance and courts of appeal throughout the country are increasingly striking out claims brought by cargo owners and insurers for lack of jurisdiction, the requirement of the signature on the bill of lading no longer being necessary.

The legal basis for this significant development is Article 17 of the 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. The convention states that, if the parties - one or more of whom must be domiciled in a contracting state - have agreed that a court of a contracting state is to have jurisdiction, that relevant court shall have exclusive jurisdiction. This is subject to the agreement conferring jurisdiction being either (i) in writing or evidenced in writing, or (ii) in a form which accords with practices that the parties have established between themselves, or (iii) in the case of international trade or commerce, in a form which accords with a usage of which the parties are, or ought to have been, aware and which in such trade or commerce is widely known to - and regularly observed by - the parties to contracts of the type involved in the particular trade or commerce concerned.

Although the Spanish courts have taken some time to recognise the provisions of the convention (it was ratified by Spain as far back as 1990), they have at last realised that they cannot continue to apply the old principles of domestic law on which they used to base their own jurisdiction. Therefore, the convention - having primacy over national law - is now widely applied, along with relevant case law of the European Court of Justice.

While it remains to be seen whether the Supreme Court will uphold this trend, it is likely that Spain’s highest court will follow suit. The precedents set in Spain, and the decisions of the European Court of Justice, are solid enough to dispel any doubts the Supreme Court might have. The sole pending issue is whether jurisdiction clauses will be considered valid if only referring to the jurisdiction of an EU country, or whether the Spanish courts will apply the same principles to all cases. Only time will tell.

Whatever the case may be, this is an important leap forward in Spanish maritime law and yet another example of Spain catching up and leaving behind the remains of an old and too formalistic maritime legal system. But the process is not complete yet. Indeed, there still needs to be promulgation of a maritime code, together with the long-awaited creation of specialised maritime tribunals. Let’s hope that bears fruit in the foreseeable future.