Legal eagle peregrine


A complex conflicts of laws judgment that provides guidance on a broad range of issues beyond the innate jurisdictional dispute. This is relevant for freight forwarders and shipping agents to consider.

The Facts

Mr Pier Luigi Loro Piana ("LP") negotiated with Peters & May Srl ("PMS") to receive a booking note from PMS's English principals, Peters & May Ltd ("PML") to carry his yacht ('My Song') from the Caribbean for a regatta in Sardinia. PML obtained a waybill from charterers of a ship that was bareboat chartered by Weco showing LP as shipper and consignee.

Although LP shipped the yacht and entered the regatta in his private capacity, the regatta was sponsored by, and the yacht was branded by, his family clothing company of which he was a minority shareholder. The yacht went overboard in heavy seas and was unsalvageable. PML denied liability, alleging collapse of the yacht's cradle, which had been provided and assembled by the yacht's crew.

The PML booking note included an English exclusive jurisdiction clause (the "EJC"). Despite this, LP commenced proceedings against PML, PMS and Weco in contract and tort for the value of the yacht before different Italian courts, which were then first seised.

Subsequently, Weco issued proceedings in England against PML and LP, and PML and PMS issued proceedings in England against LP, all claiming English jurisdiction ("negative declaratory relief"). These English proceedings were heard together.

The Judgment

The English Commercial Court considered and pronounced on the following seven issues.

  1. Was the PML Booking Note a Transport Contract?

    European law, under the Recast Brussels I Regulation (No 1215/2912) ("Recast"), allows a consumer to bring proceedings where the consumer is domiciled, and LP argued that this entitled him to bring proceedings in Italy. However, this protection does not extend to transport contracts (the policy reason for this is to avoid conflict with conventions, such as Hague-Visby and COGSA). LP sought unsuccessfully to argue that his contract with PML was not a transport contract, only a contract to arrange transport. 

    The court relied on European law precedent to find that there was a transport contract for the purposes of Recast, because its main purpose was transportation, and Recast did not distinguish different roles within the contract. There were further specific deciding factors in this case: the booking note was not limited to the arrangement of carriage, because it incorporated BIFA and with it a liberty to actually perform the carriage; further, the booking note contemplated charter of a carrying ship, referring to US COGSA, and allowed for remuneration in the form of freight rather than commission.

  2. Was LP a "Consumer" for the Purposes of Recast?

    In view of the decision at (1), it was unnecessary to decide this. Nevertheless, the court found that LP was not a consumer. Personal and business interests were mixed here. Although there was no relevant contract between LP and the clothing company, LP had not discharged the necessary burden of proving that the business interests were negligible. LP's position was not helped by his wealth (a billionaire) and his experience of yacht transports.

  3. Was LP a "Consumer" for the Purposes of UK Consumer Rights Act?

    Yes, because although there was a non-negligible business purpose, the yacht was being transported mainly for personal purposes. However, in view of the decision at (4), this did not assist LP. The fact that the definition of consumer did not affect any part of the final judgment, either at (2) or (4), relieved the court of the difficulty of dealing with the conflict between the two definitions.

  4. Was the Jurisdiction Clause "Unfair"?

    LP argued that the EJC was unfair under the UK Consumer Rights Act. It was buried in small print, was not drawn to his attention in PML's key facts, and required him to be sued in a foreign language. 

    PML in turn argued that the Consumer Rights Act could not undermine the Recast exclusion. LP had signed a note next to the clause and so cannot be said not to have read it, and, in addition to his wealth and experience, LP was guided by in house legal advisers. 

    The court therefore found that, although as stated at (3) LP was a consumer, the EJC was not unfair. 

  5. Was Weco's Claim "Interconnected"?

    Weco successfully relied on Recast to argue that PML, as co-defendant, was domiciled in England, and that Weco's interconnected claims arising from the casualty should be determined in the same way. 

    LP's argument that this argument was artificial and that he could not have contemplated being sued in England by a Danish bareboat charterer of a ship performing a voyage from Antigua to Genoa, just because the forwarder was English, did not succeed. LP should have foreseen this outcome from the EJC.

  6. Could Weco benefit from the Himalaya Clause?

    The decisions at (1) and (5) made it unnecessary to consider Weco's argument that, as a servant or agent of PML, it could claim jurisdiction under the Himalaya clause in the booking note. Nevertheless, the court did consider it. 

    The court found that Weco was PML's servant or agent, rejecting LP's submission that Weco was rather a bailee. But the court, relying on English precedent, found that the EJC could not be passed on as a benefit under the Himalaya clause, for two principal reasons: firstly, Himalaya clauses impact only on terms intended to benefit the carrier, not on mutual agreements of this type; secondly, clauses incorporating the terms of charters do not incorporate dispute resolution clauses in the absence of a clear and express term to this effect. 

  7. Could PMS Benefit from the EJC?

    LP argued that there was no binding EJC between himself and PMS which could prevent his action against PMS in Italy, which was not under the booking note. PMS argued in turn that LP was in fact seeking to enforce contractual claims under the booking note and was therefore subject to the EJC. The court accepted PMS's "conditional benefit" analysis.


The upshot of all this was basically twofold:

(i) PML (and PMS) could rely on the EJC to claim English jurisdiction, and this was unaffected by LP's consumer rights.  
(ii) Weco's right to claim in England against PML because of PML's domicile extended to its claim against LP, because of the interconnected nature of the claims.

A substantial part of this judgment was said 'obiter' and, as addressed below, other parts may soon be overtaken by events. Nevertheless it offers useful guidance to those involved in transportation, in particular freight forwarders, on the legal nature of booking notes, the definition of a transport contract, the status of incorporated BIFA terms, the extent to which Himalaya clause can be relied upon, the definition of a consumer and unfair consumer contract terms.

Impact of Brexit

From 1 January 2021 Recast will no longer apply in Great Britain. Detailed consideration of what will happen then is clearly beyond the scope of this report. However, one credible way forward appears to be accession to the Lugano Convention 2007, which currently governs jurisdiction and enforcement of judgments between the EU and the EFTA states (Switzerland, Norway and Iceland).  

Great Britain has applied for accession, but, while Switzerland, Norway and Iceland support the application, the necessary consent from the EU is still awaited. Although exactly reflecting the regulation which preceded Recast, the Lugano Convention differs from Recast in at least two respects:  

(i) Lugano lacks the convenient Recast provision, as demonstrated in this case, that the court designated by an exclusive jurisdiction clause has priority to decide on the validity of the clause, even if it is not first seised. 

The corresponding Lugano provision, that the court first seised always decides on this while all other proceedings are stayed, potentially allows parties to manipulate the system by starting proceedings in a slow jurisdiction in breach of an exclusive jurisdiction clause as a delaying tactic (known as the "Italian torpedo").

(ii) More fundamentally, the extent to which courts in non-EU states are bound by EU precedent is unclear - they are obliged only to "pay due account to it", and there is no mechanism for enforcement if courts deviate from EU law.

The resultant divergence in legal systems could lead to a resurgence of anti-suit injunctions, which are disallowed within the Recast ambit.

WECO PROJECTS APS v LORO PIANA & OTHERS ('My Song') [2020] EWHC 2150 (Comm)

We hope that you have found the above interesting. If you would like further information, or have any comments, please email us, or take this opportunity to forward to any colleagues who you may feel would be interested.

We look forward to hearing from you.

Peregrine Storrs-Fox

Risk Management Director, TT Club


  • TT Talk 269 Chinese Translation 671 KB


    Download PDF

Peregrine Storrs-Fox

Risk Management Director