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An Important Decision for Australian Shippers

An important decision for Australian shippers and voyage charterers of the Federal Court Justice Foster has been handed down recently.

You are referred to Dampskibsselskabet Norden A/S v Beach Building & Civil Group Pty Ltd [2012] FCA 696.

This decision in respect of the Australian Carriage of Goods by Sea ("COGSA") under voyage charters is authority for the proposition that attempts to exclude jurisdiction of Australia Courts may be unenforceable by virtue of Section 11 of COGSA.

In this case an Arbitration Award obtained pursuant to an Arbitration clause in the Voyage Charter in London was held by His Honour to be unenforceable by virtue of Section 11 of COGSA.

Section 11 of COGSA reads:

"Construction and jurisdiction

(1) All parties to:

(a) a sea carriage document relating to the carriage of goods from any place in Australia to any place outside Australia; or

(b) a non‑negotiable document of a kind mentioned in subparagraph 10(1)(b)(iii), relating to such a carriage of goods;
are taken to have intended to contract according to the laws in force at the place of shipment.
(2) An agreement (whether made in Australia or elsewhere) has no effect so far as it purports to:

(a) preclude or limit the effect of subsection (1) in respect of a bill of lading or a document mentioned in that subsection; or

(b) preclude or limit the jurisdiction of a court of the Commonwealth or of a State or Territory in respect of a bill of lading or a document mentioned in subsection (1); or

(c) preclude or limit the jurisdiction of a court of the Commonwealth or of a State or Territory in respect of:

(i) a sea carriage document relating to the carriage of goods from any place outside Australia to any place in Australia; or

(ii) a non‑negotiable document of a kind mentioned in subparagraph 10(1)(b)(iii) relating to such a carriage of goods.

(3) An agreement, or a provision of an agreement, that provides for the resolution of a dispute by arbitration is not made ineffective by subsection (2) (despite the fact that it may preclude or limit the jurisdiction of a court) if, under the agreement or provision, the arbitration must be conducted in Australia."