The French Supreme Court recently confirmed in a ruling that, in certain cases, cargo receivers can bring foreign carriers before a French court, even if the bill of lading contains a forum selection clause, where the clause refers to a jurisdiction outside the EU.
In the case, a car company (the shipper) had instructed the carrier to transport cars from Belgium to South Korea. The carrier issued several bills of lading for the cargo. Upon arrival, part of the cargo was allegedly found to be damaged, according to the receiver. The subrogated insurer then paid compensation to the cargo receiver and filed a claim against the carrier at the Commercial Court of Paris under the relevant bill of lading. Under the French Civil Code, a foreign defendant can be brought before a French court unless a binding choice of law and forum has been agreed upon. The carrier contested the jurisdiction of the French court, based on the terms of the bill of lading, which designated the court in Seoul, South Korea, as the competent authority. The Supreme Court ruled that the clause could not be invoked as it was not sufficiently clear, had not been expressly accepted by the cargo receiver, and because such clauses are only valid under European law if they refer to a country within the European Union.
The impact of this ruling is significant, as in cases involving a French party, the parties run the risk that a choice of law and forum clause in the bill of lading will be declared invalid. This is particularly relevant now that the United Kingdom is no longer part of the EU. The effect of this is that, in the case of the United Kingdom, a party must now have expressly agreed to a forum selection clause. It is very possible that, in practice, such clauses will not hold up against a cargo receiver if the receiver chooses to file a claim in a French court. If English law is chosen, the advice is to carefully review the clause in advance to ensure there is an explicit acceptance of both the applicable law and the competent court or authority to resolve any disputes. If the parties choose England, the recommendation is to include an arbitration clause that clearly specifies both the applicable law and forum. Additionally, it is advised that the receiver, where possible, express agreement is obtained by the receiver to the incorporate of such a clause.
If members would like to learn more about this topic, they can contact the Claims team via claims@nnpc.nl.
