Background
Smithbridge Guam Inc and Smithbridge Group Pty Ltd contracted with Swire Shipping Pte Ltd to carry two mobile cranes and related machinery from Tauranga, New Zealand and Brisbane, Australia to Guam aboard the MV Pacific Endeavour. A Liner Booking Note was executed on 27 May 2024, which incorporated Swire’s standard Bill of Lading Terms, including a clause providing for arbitration in London on LMAA terms. During loading at Brisbane on 6 June 2024, a Grove mobile crane was dropped and became a constructive total loss. The plaintiffs initiated proceedings in the Federal Court on 4 March 2026, claiming damages for breach of duties of care under the Australian Hague Rules and at common law. Prior to filing, on 23 February 2026, Swire had commenced arbitration in London. The plaintiffs sought and obtained an ex parte anti-arbitration injunction from Stewart J on 5 March 2026, restraining Swire from continuing the arbitration.
The Court’s Holding
The court held that the arbitration agreement in clause 4 of the Bill of Lading Terms was valid and enforceable and that the plaintiffs’ claims should be stayed and referred to arbitration in London. Justice Derrington found that although the Booking Note incorporated the Bill of Lading Terms by reference, including a supersession clause providing that the contract would be “superseded” by the terms of a bill of lading upon issuance, this did not render the Booking Note itself a “sea carriage document” within the Australian Hague Rules. The bills of lading actually issued (which provided for Singapore arbitration rather than London arbitration) did not conform to the terms contemplated by the Booking Note’s supersession clause, and the parties’ correspondence indicated they did not intend bills to be issued in conformity with those terms. Accordingly, the supersession clause was never effectuated, and the Booking Note—properly characterized as a contract of affreightment or voyage charterparty—remained the operative contract. Since the Booking Note was not a “sea carriage document” covered by section 11(2)(b) of the Carriage of Goods by Sea Act 1991 (Cth), that statutory prohibition on arbitration agreements did not apply, leaving the arbitration clause valid and enforceable under the International Arbitration Act 1974 (Cth).
Key Takeaways
- A supersession clause in a booking note referring to future bills of lading cannot render that booking note a “sea carriage document” under the Australian Hague Rules if the bills, when issued, do not conform to the terms specified in the clause.
- Where booking note terms differ materially from the actual bills of lading issued, the booking note remains the operative contract and is properly characterized as a contract of affreightment or voyage charterparty rather than a sea carriage document.
- Section 11(2)(b) of the Carriage of Goods by Sea Act 1991 (Cth), which prohibits agreements that limit the jurisdiction of Australian courts, applies only to sea carriage documents and does not prevent arbitration agreements in contracts of affreightment.
- An arbitration agreement in a cargo contract remains enforceable and may be specifically enforced under the International Arbitration Act 1974 (Cth), even where the underlying dispute involves loss or damage to cargo.
Why It Matters
This decision clarifies the boundaries between contracts of affreightment, voyage charterparties, and sea carriage documents under Australian maritime law. It demonstrates that courts will look to the actual conduct and terms of the parties—not merely formal incorporation clauses—to determine the true character of a carriage contract. The ruling limits the scope of statutory protections in section 11(2)(b) of COGSA 91 and confirms that modern maritime arbitration agreements, particularly those providing for London arbitration on LMAA terms, will generally be enforced in Australia provided they fall outside the statute’s narrow class of protected documents.
For shipping industry participants, the decision reinforces the importance of ensuring that bill of lading forms conform to supersession clauses in booking notes and highlights the risks of divergent dispute resolution clauses across contract tiers. It also signals that Australian courts will apply the International Arbitration Act robustly to maritime disputes and will not lightly grant anti-arbitration injunctions where a valid arbitration agreement exists.