Atlantic Cement Carriers Ltd. v. Atlantic Towing Ltd.

In Arbitration/Jurisdiction Clauses in Maritime Law on (Updated )

This was an application by a tug owner to stay proceedings commenced in the Federal Court by the owner of a barge for damages sustained because of the sinking of the barge and for an indemnity for any amounts the barge owner might be required to pay to the owner of the cargo on board the barge at the time of the sinking. The sinking occurred during the course of a towing operation from Pictou, Nova Scotia to various ports in Newfoundland. The application for the stay was based upon a jurisdiction clause in the TOWCON agreement that specified the agreement was to be governed by English law and conferred jurisdiction on the High Court of Justice in London. The application was resisted on the grounds that s. 46 of the Marine Liability Act applied or, alternatively, that there were strong reasons to not enforce the jurisdiction clause. With respect to the application of s. 46 of the Marine Liability Act the Prothonotary held that the contract in issue was one of towage not carriage and that s. 46 therefore did not apply. With respect to whether there were strong reasons to deny the stay, the Prothonotary reviewed the various factors set out in the “Eleftheria” [1996] 1 Lloyd’s Rep. 23, and held that there were no strong reasons. Accordingly, the stay was granted.