Compagnie D'Armement Maritime SA v. Compagnie Tunisienne de Navigation SA

[1971] AC 572 (1971)

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Compagnie D'Armement Maritime SA v. Compagnie Tunisienne de Navigation SA

United Kingdom House of Lords
[1971] AC 572 (1971)

Facts

Compagnie D’Armement Maritime SA, a carrier company (defendant), entered a tonnage contract with Compagnie Tunisienne de Navigation SA, a shipping company (plaintiff), for the carriage of oil between Tunisian ports. The parties used an English language charterparty for the written form of the tonnage contract, adapting the charterparty to reflect certain requirements. The contract contained a clause that provided the law of the “Flag of the Vessel carrying the goods” governed the contract. The contract also contained an arbitration clause providing the parties would refer all disputes to arbitration in London before a tribunal composed of two arbitrators appointed by the party and an umpire. Compagnie D’Armement Maritime SA used ships from one of its subsidiary companies with many different flags while performing under the contract. A dispute arose between the parties after Compagnie D’Armement Maritime SA ceased performance. The arbitrators in London made a preliminary determination that French law governed to the contract. An appeal ensued, and the court of appeals reversed the arbitral tribunal, holding that contracts with an arbitration clause providing for arbitration in London implies that English law governs unless the parties include a clause stating otherwise. The court of appeals found no clause in the contract providing for the application of a specific choice of law beyond the clause to apply the law of the flag of the vessel carrying goods and therefore found English law governed the contract.

Rule of Law

Issue

Holding and Reasoning (Diplock, J.)

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