Coast Lines Ltd. v. Hudig & Veder Chartering N.V.

Hudig & Veder Chartering N.V. (Hudig) (defendant), a Dutch company based in the Netherlands, chartered a commercial cargo ship, the Grangefield, from its owner, Coast Lines Ltd. (plaintiff), an English company based in England, for a planned transport of cargo from the Netherlands to Ireland. The Grangefield carried an English flag. The charter contract was signed in the Netherlands. The contract contained an indemnity clause requiring Hudig to indemnify Coast Lines for any loss. During the trip, the Grangefield encountered a storm and took on water, which damaged the cargo. The excess water was blamed on a corroded bilge pipe that failed, preventing the bilge from removing the water as it came aboard. The cargo owners sued Coast Lines In England for providing an unseaworthy vessel. Coast Lines admitted liability and then sought indemnity from Hudig. Coast Lines applied to the trial court for a writ to serve on Hudig outside of England, arguing that English law applied. Under English law, the contractual indemnity clause was enforceable. English law further followed the maxim that a contract must be construed, to the extent possible, to make it valid instead of invalid. Dutch law required the mandatory application of the Hague Rules, which made the shipowner responsible. Dutch courts would disregard the contrary contract term. The Dutch approach was at variance with the approaches of most countries. The trial court granted Coast Lines’ request. Hudig sought to set aside the service of the writ, which the court denied. Hudig appealed.