Allan & Anderson Ltd v A. H. Basse Rederi A/S (Piraeus)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeThe Master of the Rolls,Lord Justice ORR,Lord Justice ROSKILL
Judgment Date10 May 1974
Judgment citation (vLex)[1974] EWCA Civ J0510-2
Date10 May 1974

[1974] EWCA Civ J0510-2

In The Supreme Court of Judicature

Court of Appeal

Appeal (by leave of Mr. Justice Mocatta) by plaintiffs from order of Mr. Justice Mocatta on 19th December 1973.

Revised

Before:

The Master of the Rolls (Lord Denning),

Lord Justice Orr and

Lord Justice Roskill.

Between:
(1) Allan & Anderson Limited
(2) J. B. Bowen Limited
(3) Citrus Fruit Company (Cardiff) Limited
(4) Rankins Fruit Markets Limited
(5) Ronald J. Young & Company Limited
(6) Rowe & Company (Cornwall) Limited
Plaintiffs Appellants
and
A.H. Basse Rederi A/S
Defendants Respondents

Mr. ANDREW LONGMORE (instructed by Messrs. Richards, Butler & Co.) appeared on behalf of the Appellant Plaintiffs,

Mr. STEWART BOYD (instructed by Messrs. Thomas Cooper & Stibbard) appeared on behalf of the Respondent Defendants,

The Master of the Rolls
1

This is an unusual case about service out of the jurisdiction. In April of 1970 buyers in England were concerned to acquire potatoes from sellers in Egypt. The English buyers were firms in Bristol. Liverpool and Cardiff. They established irrevocable transferable credits in favour of the Egyptian sellers. Each of the English buyers told their English bank, the issuing bank, to issue an irrevocable credit in favour of the Egyptian sellers. Accordingly the English bank wrote out to an Egyptian bank asking them to notify the Egyptian sellers of the opening of the credit. The English bank stated the terms of the credit and asked the Egyptian bank: "Please advise the beneficiaries (the Egyptian sellers) of the opening of this credit…… We undertake that all such drafts conforming to the terms of the credit will meet with due honour on presentation." The Egyptian bank (being the advising or notifying bank) then notified the Egyptian sellers (the beneficiaries) of the opening of the credit and of its terms.

2

In each case the potatoes were duly loaded at Alexandria on the "Piraeus". Bills of lading were issued, to which I must refer later. When the potatoes got to London they were found to be in very bad condition. Some of them had to be dumped overboard. Others were rotten and of very low value. The English buyers or their assignees sought to claim damages in respect of this bad condition. They looked at the bills of lading. Each was on a stock printed form "liner bill of lading" of a Danish company. A.H. Basse Rederi A/S of Copenhagen. Many of these forms were in the possession of a shipping agency in Alexandria. This agency filled in the description of the goods shipped. The printed form had a space for signature headed in print "Signed for the Master by". But the words "for the Master" were blottedout. The space was filled in this way: "Signed by Alexandria Co for Shipping Agency

3

Memphis Shipping Agency

4

C. Spinavis

5

As Agents"

6

On the back of the bill of lading there were printed conditions. Condition 3 read:

7

Jurisdiction

8

Any dispute arising under this Bill of Lading shall be decided in the country where the Carrier has his principal place of business, and the law of such country shall apply except as provided elsewhere herein."

9

Accepting the bill of lading at its face value, the carrier was the Danish company, A.H. Basse Rederi A/S. So according to condition 3 any dispute under the bill of lading had to be decided in Denmark.

10

Condition 17 said:

11

Identity of carrier

12

"The Contract evidenced by this Bill of Lading is between the Merchant and Owner of the vessel named herein (or substitute) and it is therefore agreed that the said Shipowner only shall be liable for any damage or loss due to any breach, non-performance of any obligation arising out of the contract of carriage."

13

On 23rd April 1971 the English buyers or their assignees (who were the receivers of the cargo) brought an action for damages in the High Court in England against (1) the shipowners, a Panamanian company called Chryssovalandou Shipping Co. S.A.; (2) the company, whose bill of lading form was used, A.H. Basse Rederi Ltd. of Copenhagen; (3) the charterers, a Dutch company called Danemar Soheepvaart Mij N.V. The Court gave leave toserve that writ out of the jurisdiction. The action is still actively being pursued against the shipowners and the charterers. But a question arose in respect of the service on A.H. Basse Rederi. That company said that if there is any cause of action against them, it is on the bill of lading contract, and under that contract, if there is any question arising on it, it has got to be litigated abroad in Denmark. That is such a formidable point that the receivers of the cargo are not pursuing the writ in the first action against A.H. Basse Rederi The first action is proceeding only against the shipowners and the charterers.

14

On 7th Nay 1973 the receivers of the cargo issued a second writ. This was against A.H. Basse Rederi only. They issued this writ because in the first motion, the shipowners had specifically denied that any bills of lading were signed either by or on behalf of the Master or the shipowners. So the receivers of the cargo issued this second writ alleging that if the shipowners are right in saying that the bills of lading were issued without their authority, then A.H. Basse Rederi a/s liable for breach of warranty of authority. The receivers of the cargo have applied for leave to serve this second writ out of the jurisdiction on A.H. Basse, the Danish company. The receivers of the cargo rely on Order 11, r. 1 (f) and (g). This means that we have to inquire into this implied warranty of authority, was it a contract made within the Jurisdiction so as to come within Order 11, r. 1 (f)? or was there a breach committed within the jurisdiction so as to come within Order 11 r. 1 (8)?

15

To answer this question. I must summarise the facts. They follow the usual commercial practice in regard to documentary credit. The goods were shipped on board ship at Alexandria. The bills of lading were signed in Egypt. Together with the otherdocuments required by the credit, the Egyptian seller took the bills of lading to the Egyptian bank (which was the advising or notifying bank). That bank examined the documents, including the bills of lading. It found them all in order and issued sight drafts on its own account for payment. In making the payment the Egyptian bank (the advising or notifying bank) was acting as agent for the English issuing banks. The Egyptian bank, having paid, would be entitled to be recouped by the English bank. And the English bank would be entitled to be recouped by their English customer on whose request they issued the credit.

16

On that view of the facts, it is plain to me that the warranty of authority was given in Egypt. It was given when the shipping agents took the documents (including the bills of lading) to the Egyptian bank and got payment against those documents. The warranty was not only given in Egypt. It was relied upon in Egypt. It was relied upon by the Egyptian bank when it paid against the...

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