Introduction
Facts
Decision
Comment
Bills of lading generally include a provision that elects the jurisdiction and the applicable law for any claims that might arise from maritime carriage.
Despite this, Brazilian courts have always had an intense debate about whether this clause is valid as some courts have rendered decisions acknowledging that the bill of lading is an adhesion contract. This means that the party that hires the maritime carriage does not have the ability to bargain the terms of the contract.
A Brazilian court has recently decided on the validity of the jurisdiction clause and dismissed the lawsuit without an analysis of its merits.
The case involved an indemnity claim filed by the cargo consignee (the plaintiff) against a maritime carrier (the defendant) based on the allegation that the defendant had allegedly altered the consignee of the goods in the bill of lading, which supposedly prevented the plaintiff from withdrawing the cargo at the port. The case ran before the fifth Corporate Court of Rio de Janeiro State Justice System.
The defendant addressed several preliminary and merits arguments in its defence. Among these arguments was the allegation that the Court lacked jurisdiction as a jurisdiction clause had established that any claims should be construed and subject to German law and should run before the courts of the city of Hamburg.
The plaintiff refuted this argument alleging that this clause would be abusive and null in view of the nature of the bill of lading as an adhesion contract. Therefore, the defendant did not have the chance to question this clause and, hence, did not consent to it.
The case records were remitted to the judge’s chambers, and he rendered a decision dismissing the lawsuit without an analysis of its merits. The judge based this decision on the Court’s lack of jurisdiction due to the existence of the jurisdiction clause in the bill of lading.
The judge affirmed that article 25 of the Brazilian Civil Procedural Code (CPC) allowed the parties to elect a foreign jurisdiction to rule claims arising out of contracts.
The decision also mentioned that the clause was not abusive as the contract entered into by the parties was a merchant relationship of international purchase and transportation of goods. Thus, as both companies are used to the practices of international commerce, there was no vulnerability and no nullity in the jurisdiction clause.
The plaintiff’s attorneys did not lodge an appeal challenging the abovementioned decision and it became final and unappealable.
Despite the skeptical stance of the Brazilian jurisprudence regarding the validity of the jurisdiction clause, after the new Brazilian Civil Procedural Code entered into force in March of 2016, there seems to be a change in the previous understanding.
The mere allegation that the bill of lading is an adhesion contract is not acceptable as a sole ground for acknowledging the abusiveness and nullity of the clause.
Currently, prior to ruling on this matter, the judges had analysed:
- the relationship between the parties;
- the applicability of the consumer code; and
- the existence of vulnerability of one company before the other (either technical or financial).
In case the parties are not found vulnerable, even if considered to be an adhesion contract, many courts have been affirming the validity of the jurisdiction clause of the bill of lading.
All these factors denote how important it is that lawyers defend allegations, even if the jurisprudence is unfavorable to their clients. Through well-drafted applications, meetings with the judges, or even law or understanding alterations, the jurisprudence may shift as it is being recently verified for the maritime carrier in relation to the jurisdiction clauses of the bill of lading.
For further information on this topic please contact Rodrigo Baptista Dalhe, Marcelo Engelke Muniz or Lucas Marques at Kincaid / Mendes Vianna Advogados by telephone (+55 21 2276 6200) or email (rodrigo.dalhe@kincaid.com.br, marcelo.muniz@kincaid.com.br or lucas@kincaid.com.br). The Kincaid / Mendes Vianna Advogados website can be accessed at www.kincaid.com.br.