Compagnie des Messageries Maritimes v Wilson

The question whether there were any special circumstances which should, apart from any other considerations, induce the court to refuse to stay the action does not appear to have been debated upon the original application, for what was, in effect, a preliminary objection was raised by the respondent. For the purposes of this objection the respondent relied upon s. 9 (2) of the Sea-Carriage of Goods Act 1924 which provides as follows: "Any stipulation or agreement, whether made in the Commonwealth or elsewhere, purporting to oust or lessen the jurisdiction of the courts of the Commonwealth or of a State in respect of any bill of lading or document relating to the carriage of goods from any place outside Australia to any place in Australia shall be illegal, null and void, and of no effect."

It was common ground between the parties that, even in the absence of such an enactment as s. 9 (2), contractual provisions such as those contained in the bill of lading in question could not deprive the local courts of jurisdiction. Perhaps it may be said that this proposition is so well established that it is unnecessary to cite authority for it. It is, however, upon this proposition that the argument of the appellant ultimately seized to justify its application in the face of s. 9 (2). Consideration of such cases as Law v. Garrett [1] ; Austrian Lloyd Steamship Co. v. Gresham Life Assurance Society Ltd. [2] ; Kirchner & Co. v. Gruban [3] ; The Dawlish [4] and The Cap Blanco [5] it was said, establishes that stipulations such as those in question in the present case do not oust the jurisdiction of the local courts but are treated in substance as submissions to arbitration to which effect is given by staying proceedings in the local courts in the absence of special reasons for refusing to adopt such a course (see also the discussion in Huddart Parker Ltd. v. The Ship Mill Hill [6] ). On that basis it is said that stipulations such as these do not oust the jurisdiction of the local courts which may, at their discretion, either entertain an action founded upon a contract containing such stipulations or stay further proceedings in the action and thereby refuse to entertain it. But at the same time it was urged upon us that contractual stipulations which purport to oust the jurisdiction of the local courts have always been regarded as "void" or "illegal" or "unenforceable". The appellant's argument therefore maintains that, quite apart from the effect of s. 9 (2), the stipulations under consideration in this case would be regarded as void, but that, notwithstanding this characterization of them, some effect would be given to them for they would be regarded as if they constituted a submission to arbitration.

1. (1878) 8 Ch. D. 26. 2. (1903) 1 K.B. 249. 3. (1909) 1 Ch. 413. 4. (1910) P. 339. 5. (1913) P. 130. 6. (1950) 81 C.L.R. 502.

The effect of the appellant's argument appears to me to assert that contractual stipulations such as these are, quite apart from the effect of the section, at one and the same time void and yet not devoid of all legal significance. It is, of course, clear that stipulations which purport to oust the jurisdiction of the courts have been described variously as void, illegal, invalid and unenforceable and have been said to be "contrary to the general policy of the law" and "against public policy", but, nevertheless, they have been treated as submissions to arbitration and given effect to as such. One of the many examples which may be given is to be found in The Cap Blanco [1] where Sir Samuel Evans said: "There remains to be considered clause 14 of the bill of lading, which provides that any disputes concerning the interpretation of the bill of lading are to be decided in Hamburg according to German law The authorities cited, namely, Law v. Garrett [2] ; Austrian Lloyd Steamship Co. v. Gresham Life Assurance Society Ltd. [3] ; Logan v. Bank of Scotland [No. 2] [4] and Kirchner & Co. v. Gruban [5] appear to me to establish the proposition that such a clause is to be treated as a submission to arbitration within the meaning of s. 4 of the Arbitration Act 1889. The tribunal at Hamburg is not specified, but a fair businesslike reading of the contract means that such disputes are to be tried by the competent court in Hamburg, and in accordance with German law. It is conceivable that the parties agreed to that clause in the bill of lading in order expressly to avoid a trial here under the jurisdiction which I decide exists in this court. In dealing with commercial documents of this kind, effect must be given, if the terms of the contract permit it, to the obvious intention and agreement of the parties. I think the parties clearly agreed that disputes under the contract should be dealt with by the German tribunal, and it is right to hold the plaintiffs to their part of the agreement. Moreover it is probably more convenient and much more inexpensive, as the disputes have to be decided according to German law, that they should be determined in the Hamburg court. Although, therefore, this court is invested with jurisdiction, I order that the proceedings in the action be stayed, in order that the parties may litigate in Germany, as they have agreed to do" [6] .

1. (1913) P. 130. 2. (1878) 8 Ch.D. 26. 3. (1903) 1 K.B. 249. 4. (1906) 1 K.B. 141. 5. (1909) 1 Ch. 413. 6. (1913) P., at pp. 135, 136.

Again, in Czarnikow v. Roth, Schmidt & Co. [7] Scrutton L.J. said: "I am of opinion that r. 19 of the rules of the Refined Sugar Association in so far as it purports to prevent a party to an arbitration before the Association from exercising his right under the Arbitration Act to ask for a special case for the opinion of the court on a question of law is contrary to public policy and so unenforceable. In countless cases parties agree to submit their disputes to arbitrators whose decision shall be final and conclusive. But the courts, if one of these parties brings an action, never treats this agreement as conclusively preventing the courts from hearing the dispute. They consider the merits of the case, including the fact of the agreement of the parties, and either stay the action or allow it to proceed according to the view they form of the best method of procedure; and they have always in my experience declined to fetter their discretion by laying down any fixed rules on which they will exercise it. If they allow the action to proceed they pay no further attention, and give no legal effect, to any further proceedings in the arbitration" [1] .

1. (1922) 2 K.B. 478. 2. (1922) 2 K.B. 478, at pp. 487, 488.

An illustration of the same principle is to be found in our own courts in Huddart Parker Ltd. v. The Ship Mill Hill [2] where Dixon J. (as he then was) said: "The provision standing as s. 5 of the Victorian Arbitration Act 1928 has been interpreted as covering an agreement referring matters to the jurisdiction of a foreign court: see per Sir Samuel Evans P. in The Cap Blanco [3] and the cases cited by his Lordship. It is a result which seems to take little account of the definition of the word "submission" (s. 27 of the Act of the United Kingdom) but it is sufficiently well settled" [4] .

1. (1950) 81 C.L.R. 502. 2. (1913) P. 130, at p. 135. 3. (1950) 81 C.L.R., at p. 508.

It is on the strength of such authorities as these that the appellant relies to establish that, quite apart from the provisions of s. 9 (2), stipulations such as those under consideration in this case would not operate to oust the jurisdiction of the local courts but would be treated as constituting a submission to arbitration. Yet, it is asserted, the stipulations would properly be characterized as void. To me, these two propositions cannot, in their literal sense, stand together for, if the stipulations are void, they can have no effect at all. The true explanation seems to me to be that stipulations such as these wear two aspects; they purport to oust or lessen the jurisdiction of the local courts and at the same time constitute a submission to arbitration. In so far as they purport to do the former they are void or unenforceable in this country, but in so far as they constitute a submission to arbitration the authorities show that effect is given to them as such. To my mind this is the key to the fallacy in the appellant's argument for it is contended, firstly, that, for the reasons already given, the stipulations do not oust or lessen the jurisdiction of the local courts and that, therefore, s. 9 (2) does not apply to them and, further, that, even if it does, s. 9 (2) has no greater or different effect upon them than the pre-existing law which characterized such stipulations as void. But the short answer to the first limb of this argument is that s. 9 (2) applies to stipulations which purport to oust or lessen the jurisdiction and not only to stipulations which have that effect. There are, of course, no such stipulations as the latter. The answer to the second limb is that the effect of s. 9 (2) is to render such stipulations "illegal, null and void and of no effect". In my opinion, this carries the matter much further than the pre-existing law which regarded such stipulations as void or ineffective only in so far as they purported to oust the jurisdiction of the local courts. Apart from the provisions of s. 9 (2) the only effect they would have had would have been as submissions to arbitration. Now s. 9 (2) says that such stipulations are to be illegal, null and void and of no effect. I do not think that the section could more plainly say that no longer are they to have this effect, and accordingly I am of opinion that the appeal should be dismissed.