Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Wilberforce,Viscount Dilhorne,Lord Salmon,Lord Russell of Killowen,Lord Keith of Kinkel
Judgment Date18 May 1978
Judgment citation (vLex)[1978] UKHL J0518-1

[1978] UKHL J0518-1

House of Lords

Lord Wilberforce

Viscount Dilhorne

Lord Salmon

Lord Russell of Killowen

Lord Keith of Kinkel

Vanden Avenne-Izegem P.V.B.A.
(Respondents)
and
Bremer Handelsgesellschaft M.B.H.
(Appellants)
Vanden Avenne-Izegem P.V.B.A.
(Appellants)
and
Bremer Handelsgesellschaft M.B.H.
(Respondents)

Upon Report from the Appellate Committee to whom was referred the Cause Vanden Avenne-Izegem P.V.B.A. against Bremer Handelsgesellschaft m.b.H., That the Committee had heard Counsel as well on Tuesday the 21st, Wednesday the 22nd, Thursday the 23rd, Monday the 27th and Tuesday the 28th days of February last as on Wednesday the 1st, Thursday the 2nd and Monday the 6th days of March last upon the Petition and Appeal of Bremer Handelsgesellschaft m.b.H. of Spitalerstrasse 22, 2000 Hamburg 1, West Germany praying that the matter of the Order set forth in the Schedule thereto, namely an Order of Her Majesty's Court of Appeal of the 17th day of June 1977 might be reviewed before Her Majesty the Queen in Her Court of Parliament and that the said Order might be reversed, varied or altered or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament might seem meet; as also upon the Case of Vanden Avenne-Izegem P.V.B.A. lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 17th day of June 1977 complained of in the said Appeal be, and the same is hereby, Reversed and that Question 1 of the Questions of Law set out at paragraph 24 of the Special Case stated by the Board of Appeal of the Grain and Feed Trade Association Limited be, and the same is hereby, answered in the negative and that the Order of Mr Justice Mocatta of the 13th day of July 1976, set aside by the Court of Appeal be, and the same is hereby, Restored: And it is further Ordered, That the Respondents the buyers Vanden Avenne-Izegem P.V.B.A. do pay or cause to be paid to the Appellants the sellers Bremer Handelsgesellchaft m.b.H. the Costs incurred by them in the Courts below and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments if not agreed between the parties: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Queen's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.

Upon Report from the Appellate Committee to whom was referred the Cause Vanden Avenne-Izegem P.V.B.A. against Bremer Handelsgesellschaft m.b.H., That the Committee had heard Counsel as well on Tuesday the 21st, Wednesday the 22nd, Thursday the 23rd Monday the 27th and Tuesday the 28th days of February last as on Wednesday the 1st, Thursday the 2nd and Monday the 6th days of March last upon the Petition and Appeal of Vanden Avenne-Izegem P.V.B.A. of Zuidkaai 19-21, Izegem, Belgium praying that the matter of the Order set forth in the Schedule thereto, namely an Order of Her Majesty's Court of Appeal of the 17th day of June 1977 might be reviewed before Her Majesty the Queen in Her Court of Parliament and that the said Order might be reversed, varied or altered and that the Petitioners might have the relief prayed for in the Appeal or such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament might seem meet; as also upon the case of Bremer Handelsgesellschaft m.b.H. lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 17th day of June 1977 complained of in the said Appeal be, and the same is hereby Reversed, and that Question 1 of the Questions of Law set out at paragraph 24 of the Special Case stated by the Board of Appeal of the Grain and Feed Trade Association Limited be, and the same is hereby, answered in the negative and that (Question 2 of the Questions of Law in the Special Case not therefore requiring to be answered) the Order of Mr. Justice Mocatta of the 13th day of July 1976, set aside by the Court of Appeal be, and the same is hereby, Restored and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants the buyers Vanden Avenne-Izegem P.V.B.A. do pay or cause to be paid to the Respondents the sellers Bremer Handelsgesellschaft m.b.H. the Costs incurred by them in the Courts below and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments if not agreed between the parties: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Queen's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.

Lord Wilberforce

My Lords,

1

This case is one of many which arose out of an embargo imposed by the United States Government on 27 June 1973 which prohibited the export of soya bean meal (s.b.m.) and a number of other agricultural commodities. Some of these cases have reached the courts and are the subject of reported decisions ( [1975] 2 Lloyd's Rep. 118, Tradax v. Andre [1976] 1 Lloyd's Rep. 416, Finagrain v. Kruse [1976] 2 Lloyd's Rep. 508, Bunge v. Kruse [1977] 1 Lloyd's Rep. 492 and others). Many others are pending and will be affected by the decision in the present appeal.

2

The contracts in the present, and previous cases, were made on the form GAFTA 100 and the main questions involved turn upon various provisions of that form�in particular clause 21, a contractual frustration clause, and clause 22,force majeure. The contract with which this case is concerned was made on 5 April 1973 for 2,500 metric tons sbm. "from origin" (i.e., from the U.S.A.) to be delivered c.i.f. Rotterdam by instalments of 500 m.t. per month. In fact the relevant figure for the purpose of this appeal is 280 m.t. per month since there was a "wash-out" of 220 m.t. per month under a previous contract. The present dispute relates to the June 1973 instalment.

3

The embargo was imposed on 27 June 1973 and it is not disputed that it made export impossible from 27 June to 2 July inclusive except for goods which were "on lighter destined for an exporting vessel or for which loading aboard an exporting vessel had actually commenced as of 5 p.m. E.D.T. June 27, 1973": this exception, referred to in the case as "the loophole" was not available to the sellers. In the Bulletin which announced the embargo it was said that a decision as to licensing exports of the commodities subject to the embargo would be announced no later than July 2, 1973. On 2 July, 1973, by Bulletin No. 88, a licensing system was introduced which provided for the issue of licences for 40 per cent of any outstanding sbm. contract.

4

Between 27 June and 2 July 1973 the embargo, as regards the sellers, was absolute. On 29 June 1973 the sellers sent a warning notice to the buyers mentioning clauses 21 and 22 of Form 100 and stating, "The fulfilment of the above contract (of 5 April 1973), in particular its June instalment, might be affected".

5

On 3 July 1973, at 17.54 hrs. the sellers, after hearing of Bulletin No. 88, sent a telex asking for the buyers' agreement that the contract(s) should be fulfilled by the supply of 40 per cent or by such proportion as should be released by the U.S. authorities. The telex further contained this sentence:

"In addition, we invoke for the June instalment theForce Majeure extension of G.A.F.T.A. 100 and nominate as shipping ports the usual ports on the Lakes/East Coast/Gulf."

6

The sellers obtained (about 7 July 1973�the exact date is not found) an export licence in respect of the outstanding monthly instalments�including that for June, and were able to ship about 800 m.t. (798�331 m.t.) on board theKyravathia, one of their chartered vessels, the bill of lading being dated 8 July. On 9 July 1973 the sellers sent a telex to the buyers invoking cancellation under clause 21 in respect of part-quantities for which export licences could not be obtained.

7

The first series of legal questions arises in respect of clause 21. The clause will be set out in the report of this appeal. It is not disputed that the embargo falls within the initial words of this clause, but six questions arise:

1. As to the advice clause, having regard to the fact that the clause was not invoked until 9 July 1973, and having regard to the form of the advice.

2. As to causation.

3. As to the effect of the extension clause.

4. Buying afloat.

5. As to 90 tons which became available in June.

6. As to 112 tons, for which the sellers were held liable by the Court of Appeal.

1. The advice clause.
8

No point as to this was taken before the arbitrators, so there is no finding as to the fact of delay. The buyers desired to take the point that the clause is a condition precedent, the onus of satisfying which is on the sellers so that in the absence of a finding the sellers must fail: alternatively they ask for a remission for findings on the question of delay. The sellers do not object to the point being raised, but themselves contend that the clause is not a condition precedent, but is either a warranty or an intermediate term. They accept that, if it is either of these, the ease might have to be remitted on this point, if in the end it was relevant.

9

The...

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