Category: Uncategorized

Binding effect of non-variation except in writing clause endorsed by the UKSC

The facts

Rock Advertising Ltd entered into a contractual licence with MWB to occupy office space at Marble Arch Tower in Bryanston Street, London W1, for a fixed term of 12 months.

The licence fee was £3,500 per month for the first three months and £4,333.34 per month for the rest of the term.

Clause 7.6 of the agreement provided:

“This Licence sets out all of the terms as agreed between MWB and Licensee. No other representations or terms shall apply or form part of this Licence. All variations to this Licence must be agreed, set out in writing and signed on behalf of both parties before they take effect.”

Rock Advertising accumulated arrears of licence fees amounting to more than £12,000.

The company’s sole director, proposed a revised schedule of payments to a credit controller employed by MWB.

Rock contended that MWB orally agreed to vary the licence agreement in accordance with the revised schedule. Continue reading “576. Rock Advertising Limited v MWB Business Exchange Centres Limited [2018] UKSC 24”

Cargo damage – interpretation of NYPE ICA

The Facts

Agile Holdings Corporation let the vessel to Essar Shipping Ltd on a time charter for a single trip from Tunisia to India via Trinidad.

The cargo was a consignment of direct reduced iron and the charter was on the NYPE 46 form.

DRI is highly reactive and combustible in the presence of heat or water.

In the course of loading the cargo onto the vessel by means of a conveyor belt at Port Lisas, Trinidad, the belt was seen to have caught fire.

Supercargo inspected the holds and advised that loading could continue.

The DRI was still on fire through the voyage and upon discharge, the cargo interests, Essar Steel Limited – an associated company of Essar brought a claim against Agile.

Agile commenced an arbitration seeking from Essar a declaration that it was obliged as charterer to indemnify it against any liability it might be found to have to the cargo interests.

By clause 8 of the charter party:

“… Charterers are to load, stow, and trim, tally and discharge the cargo at their expense under the supervision of the Captain…”

By clause 89 of the charter party:

“Cargo claims as between the Owners and Charterers shall be settled in accordance with the Inter- Club New York Produce Exchange Agreement of February 1970 as amended September 1996 as attached, or any subsequent amendments.”

Clause (8) of the ICA provided as follows:

“Cargo claims shall be apportioned as follows:…(a) Claims in fact arising out of unseaworthiness and/or error or fault in navigation or management of the vessel: 100% Owners…

(b) Claims in fact arising out of the loading, stowage, lashing, discharge, storage or other handling of cargo: 100% Charterers unless [1] the words “and responsibility” are added in clause 8 [of the NYPE form] or there is a similar amendment making the Master responsible for cargo handling in which case: 50% Charterers 50% Owners save [2] where the Charterer proves that the failure properly to load, stow, lash, discharge or handle the cargo was caused by the unseaworthiness of the vessel in which case: 100% Owners

(c) Subject to (a) and (b) above, claims for shortage or overcarriage: 50% Charterers 50% Owners…

(d) All of the cargo claims whatsoever (including claims for delay to cargo): 50% Charterers/50% Owners…”

Finally, by Clause 49 of the charter party (“Clause 49”),

“Stevedore Damage

The Stevedores although appointed and paid by Charterers/Shippers/Receivers and or their Agents, to remain under the direction of the Master who will be responsible for proper stowage and seaworthiness and safety of the vessel…”

Agile’s case was that Clause (8) (b) applied without qualification so that Essar was 100% liable.

In the alternative it contended that Clause (8) (b) applied but in circumstances where there was clear and irrefutable evidence that the claim arose out of the act or neglect of Essar so that again, Essar was 100% liable.

Essar’s case was that Clause (8) (a) applied without qualification so that Agile was 100% liable.

In the alternative it relied upon Clause (8) (b) contending that Clause 49 was a “similar amendment making the Master responsible for cargo handling” in which case liability was 50/50. Continue reading “575. Agile Holdings Corporation v Essar Shipping Ltd (the “Maria”) [2018] EWHC 1055 (Comm)”

Straight bill of lading held to qualify as a bill of lading for the purposes of the Hague Visby Rules

The facts

Four containers of printing machinery were damaged in the course of their carriage by sea from Felixstowe to Boston, USA.

No document was issued to record the contract for the carriage of the goods from Felixstowe to Boston, the continuation of carriage which began in Durban.

The contract for the carriage from Durban to Felixstowe was covered by a straight bill of lading issued at Durban.

The good were trans-shipped and loaded on a different vessel at Felixstowe.

The shipper and seller of the goods  could have required the issue of a document to record the contract for the onward carriage of the goods from Felixstowe to Boston as per Article III 3.

The issue was whether the carriage was covered by a bill of lading or similar document of title for the purposes of the 1971 COGSA and the Hague Visby Rules within the meaning ascribed to “covered by” in the Happy Ranger.

If it was, a more generous package limitation would apply than the alternative regime, USA COGSA.

Findings

Messrs Mabbs, Hamsher and Moss concluded that a straight bill of lading did not fall within section 1(4) of the 1971 Act and article I (b) of the Rules.

Their award was confirmed by Langley J.

The Court of Appeal (Peter Gibson and Rix LJJ and Jacob J) held that a straight bill such as this, did qualify. The main judgment was delivered by Rix LJ.

The House of Lords (Bingham, Steyn, Rodger, Nicholls and Brown) agreed with the Court of Appeal.

Excerpts from Lord Bingham’s speech

I must acknowledge that the arguments advanced in the carrier’s written case and by Mr Simon Rainey QC in his very able oral submission, fortified by the reasons of the arbitrators and the judge and buttressed by weighty academic authority, have caused my mind, more than once, to waver. But I have on reflection concluded that the Court of Appeal reached the correct conclusion, for the reasons which they gave…

It is always the task of the court to determine the true nature and effect of a legal document, and in performing that task the court is not bound by the label which the parties have chosen to apply to it. Where, however, the court is considering a bona fide mercantile document, issued in the ordinary course of trade, it will ordinarily be slow to reject the description which the document bears, particularly where the document has been issued by the party seeking to reject the description…

This document called itself a bill of lading. It was not a bill transferable by endorsement, and so was not “negotiable” in the somewhat inaccurate sense in which that term is used in this context:  Kum and Another v Wah Tat Bank Limited…

But if this document was a mere receipt or sea waybill there was no purpose in following the traditional practice of issuing more than one original, and the time honoured language used in the attestation clause (see para 4 (6) above) was entirely meaningless…

The contract conditions clearly envisage that the consignee and bill of lading holder may become a party to the contract of carriage, and the conveyance of contractual rights by transfer of the bill of lading has been a, if not the, distinctive feature of a bill of lading, at any rate since the Bills of Lading Act 1855…

The conditions of this contract make no sense if the consignee, although holding the bill of lading, remains a stranger to the contract of carriage. They are unlike the standard terms of non-negotiable sea waybills of which examples are given in Gaskell, Bills of Lading: Law and Contracts (LLP, 2000), pp 727-733…

The requirement for production of the original bill against delivery does not lack a commercial rationale in the case of a straight bill: the shipper will not wish to part with an original bill to the consignee or buyer until that party has paid, and requiring production of the bill to obtain delivery is the most effective way of ensuring that a consignee or buyer who has not paid cannot obtain delivery. In this case, therefore, as in the case of an order bill, the bill is “a key which in the hands of a rightful owner is intended to unlock the door of the warehouse, floating or fixed, in which the goods may chance to be” (Sanders v Maclean,  per Bowen LJ).

Lord Bingham went on to consider the history of the bill of lading and referred to Proctor, The Legal Role of the Bill of Lading, Sea Waybill and Multimodal Transport Document (Pretoria, 1997), pp 25-26), and Lickbarrow v Mason (1794) 5 TR 683

As Rix LJ had done, he considered the travaux, local and foreign cases and the text books.

Commentary

The Hague Rules and the Hague Visby Rules being the product of an international conference are more susceptible to ambiguity than domestic legislation.

It was accepted by all the judges involved, among the most eminent of their time, that the Rules were primarily concerned with protecting third parties coming into possession of the bills.

The judges accepted that non- transferable sea waybills fell outside the Rules even where ordinary commercial shipments were involved.

Yet Article VI seems to suggest that the Rules were intended to extend to all shipments made in the ordinary course of trade.

Despite the focus in this case on 3^rd party rights, the Rules were historically also geared to bolstering the bargaining position of shippers against ship owners as immediate parties. This is reflected in Article III 3 which entitles a shipper to demand a bill of lading.

It perhaps unfortunate that the “bill of lading” label was given such prominence in the Rules.

The reasoning in this case navigates a course between the objectives of the Rules and ship owners’ documents designed to circumvent them.

 

Protective writ issued before sale of vessel upheld

The facts

Two German single-ship owning companies arrested this vessel as an associated ship in respect of charter claims against Hanjin.

As in the Mare Traveller,  change of ownership  took place before arrest but after issue of the protective writ.

Interested parties applied for the setting aside of the arrest on the same arguments presented to Burger AJ in the Cape High Court. Continue reading “573. The “Seaspan Grouse” KZN Local Division, case no’s 69 & 70/2018, 26 February 2018″

Proceedings in rem – properly brought by issue of writ and not affected by subsequent change of ownership of the vessel

 The facts

In November 1966, the plaintiffs, cargo owners, issued a writ in rem against ship owners, Smith Rederi Aktiebolaget, the Monica Smith, claiming damages for breach of contract .

In January 1967, the ship owners sold the ship to the defendants, Rederi Aktiebolaget Tankoil, who renamed her the Monica S.

On 9 February 1967, the writ was amended to reflect the changed details.

Tankoil applied for an order setting aside the amended writ or service of it. Continue reading “572. The Monica S.; Owners of Cargo Laden on Ship Monica Smith v Owners of Ship formerly “Monica Smith” now “Monica S” [1967] 3 All ER 740″

Protective writ set aside on basis that vessel no longer owned by entity liable

The facts

Creditors of Hanjin Shipping issued protective writs out of various South African courts against more than 70 Hanjin beneficially owned ships to facilitate their arrest in rem, as associated ships, when they called at local ports.

Tebtale, owners of Mount Meru, one of the vessels affected, applied to have her removed from the list.

Tebtale had purchased the Mount Meru after the issue of the writs and were not liable in personam to the particular creditor in question.

The Mount Meru found its way onto the list as a ship associated with the Mare Traveller, the vessel against which the creditor had a claim in personam. Continue reading “571. Tebtale Marine Inc v MS Mare Traveller Schiffahrts GMBH & Co KG (the “Mare Traveller” and the “Mount Meru”) 2018 (2) SA 490 (WCC)”

Security arrest – seminal case on requirements

  The facts

 The Thalassini Avgi loaded general cargo in various ports in the Far East, for carriage to various ports in the Middle East, including Aden, in the People’s Democratic Republic of Yemen.

The owner was Astromando Compania Naviera SA.

Astromando time chartered the vessel to Nippon Yusen Kaisha.

NYK issued bills of lading in respect of the various consignments of goods taken on board the ship including goods destined for consignees in South Yemen.

At Aden, a fire broke out on board the vessel damaging much of the cargo and the vessel.

The Yemeni consignees, being the holders of the bills of lading, arrested the Dimitris in Port Elizabeth as an associated vessel.

It was common cause that the Dimitris was an associated vessel.

The West England Shipowners Mutual Protection and Indemnity Association (Luxembourg) issued a letter of undertaking to obtain the release of the vessel confined to judgments in Japan and South Africa. Continue reading “570. Cargo laden and lately laden on board the MV Thalassini Avgi v MV Dimitris 1989 (3) SA 820 (A)”

“always accessible” applies to entry and departure

The facts

The charter of the vessel was for carriage from the US Gulf to the Republic of Congo and Angola. The charter party, on an amended GENCON 1994 form, provided:

“10. Loading port or place (Cl.1)

1 good safe berth always afloat always accessible 1-2 good safe ports in the USG in Charterers’ option …”

While the vessel was loading at an unnamed Gulf port,  a bridge and lock were damaged.

As a result the vessel was unable to leave the berth until 14 days after she had completed loading.

The Owners claimed damages for detention from the Charterers for the period of delay.

Findings

The arbitrator, Ian Kinnell QC, found the warranty applied to entry but not departure, following London Arbitration 11/97 (1997) LMLN 463.

In the absence of other authority, Mr Justice Robin Knowles CBE,  found the warranty to include departure, as a matter of ordinary language.

 

Associated ship arrested to provide additional security – onus on applicant to prove reasonable and genuine need on a balance of probabilities

The facts

Bocimar NV, a Belgian corporation, concluded a contract with the International Colombia Resources Corporation of Colombia, a seller and shipper of coal, in terms of which Bocimar undertook to carry a cargo of between 60 000 and 64 000 metric tons of coal from Puerto Bolivar, Colombia, to Rotterdam in the Netherlands.

Bocimar chartered the Crna Gora to perform the contract of carriage.

She was owned and controlled by Zeta Ocean Shipping Ltd which was owned by Boka Ocean Shipping Corporation. Boka also owned Kotor which owned the MV Kordun.

The vessel was refused entry to the port of Rotterdam by reason of economic sanctions imposed by the Security Council of the United Nations Organization in respect of the Federal Republic of Yugoslavia (Serbia and Montenegro) and reinforced by a resolution of the European Community.

Application was made on behalf of Bocimar and Enerco BV of Holland, one of the consignees of the cargo of coal, to the District Court of Rotterdam for an order directing the State of the Netherlands to permit the Crna Gora to enter the port of Rotterdam and to discharge her cargo. The Court refused to grant the order sought.

The Dutch authorities were eventually persuaded that if the cargo was not discharged there was a serious danger that the coal would ignite spontaneously and cause damage to the vessel, ships in the vicinity and harbour installations. Later, on the application of Zeta the President of the District Court in Rotterdam ordered the release of the cargo.

Intercor held Bocimar responsible for losses caused by the delay. Bocimar, in turn sought an indemnity from Zeta.

Bocimar arrested the Crna Gora in Rotterdam in order to secure its claim against Zeta. At the same time arrests of the vessel were also effected by three banks, mortgagees of the vessel, in order to secure their interest in the vessel.

In addition, Bocimar made application ex parte to the Cape of Good Hope Provincial Division, exercising its Admiralty Jurisdiction in terms of the Admiralty Jurisdiction Regulation Act 105 of 1983, for an order under s 5(3) of the Act for the arrest of the MV Kordun, then at berth in the port of Saldanha Bay, for the purpose of providing further security for Bocimar’s claim. Continue reading “568. Bocimar NV v Kotor Overseas Shipping Ltd ( the “Crna Gora” and the “Kordun”)1994 (2) SA 563 (A)”

Bill of lading holder entitled to full damages from ship owners for damaged cargo irrespective of compensation received from sellers in terms of separate contract of sale.

The facts

Bills of lading issued by the master of the vessel, a refrigerated cargo ship, acknowledged shipment at Guayaquil, Ecuador, in apparent good order and condition of 249,250 boxes of fresh bananas for carriage to Libya. The cargo deteriorated during the carriage and was discharged at Tripoli in that damaged condition. Altfadul, the consignee, received the cargo in its damaged state.

The difference between the value of the cargo as in fact discharged and its value had it been sound on arrival, was US$4,567,351.

Altfadul rejected the cargo, under the contract of sale and claimed a refund of the price.

The seller, CoMaCo. S.p.A., was also the charterer of the vessel under a voyage charter on the Gencon form with additional clauses. The bills of lading were on the Congenbill form issued for use with the Gencon form of charter. They referred to and incorporated the terms and conditions, liberties and exceptions of the voyage charter, including its arbitration clause.

CoMaCo agreed a credit of US$2,586,105.09 in favour of Altfadul, to be spread over three subsequent shipments.

SIAT was the cargo insurer, at the instance of CoMaCo.

Altfadul, as holder, assigned its rights under the bill of lading to CoMaCo who assigned them to SIAT.

Ship owners claimed that damages had to be reduced by the credit given by CoMaCo ie US$ 2 586 105. Continue reading “567. Sevylor Shipping and Trading Corp v Altfadul Company for Foods, Fruits & Livestock and SIAT (Societa Italiana Assicurazioni e Reassicurazioni S.p.A. (the “Baltic Strait”) [2018] EWHC 629 (Comm)”