Cargill International S.A. v C.P.N. Tankers (Bermuda) Ltd (Ot Sonja)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HIRST,LORD JUSTICE ROCH,SIR DAVID CROOM-JOHNSON |
| Judgment Date | 28 May 1993 |
| Judgment citation (vLex) | [1993] EWCA Civ J0528-2 |
| Docket Number | QBCMI 92/1332/B |
| Court | Court of Appeal (Civil Division) |
| Date | 28 May 1993 |
APPEAL OF PLAINTIFF
[1993] EWCA Civ J0528-2
Before: Lord Justice Hirst Lord Justice Roch Sir David Croom-Johnson
QBCMI 92/1332/B
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(COMMERCIAL COURT)
MR E. BROADBENT and MR M. COBURN appeared on behalf of. The plaintiff. (Instructed by Mare Fisher Brown, 1. Norten Folgate, London.)
MR N. HAMBLEN appeared on behalf of the Defendants. (Instrcuted by Holman Fenwick Willan, Marlowe House,. Hayes Avenue, London.)
(AS APPROVED)
INTRODUCTION
This is an appeal by the plaintiff charterers, Cargill International SA, against the judgment and order of Saville J. dated 21st September 1992 in favour of the defendant disponent owners CPN Tankers (Bermuda) Ltd, of the vessel "OT SONIA".
The plaintiffs had claimed by their originating summons a declaration that the plaintiffs' claims against the Defendants under a charterparty dated 14th February 1989 were not time barred, alternatively, it they were time barred, an extension of time for the commencement of arbitration proceedings under the arbitration clause in the charterparty pursuant to section 27 of the Arbitration Act 1950.
The case raises an important point on the construction of the limitation provision in Article 3(6) Carriage of Goods by Sea Act of the United States approved by Congress
on April 16th 1936 (The U.S. Act), which was incorporated in the charterparty by clause paramount, and which prescribes a one year time bar.
The charterparty was on the ASBATANKVOY form for carriage of a cargo of vegetable oils from ports in the Hamburg-Rotterdam range to China.
The charterparty provided that disputes should be referred to arbitration in London, and that it should be governed by English law.
The plaintiffs claimed that in breach of the charter, the vessel presented for loading at the first loadport with tanks that were dirty and unsuitable for the carriage of the cargo, and that this necessitated the cleaning of the tanks, which in turn delayed the start of loading, and allegedly caused consequential financial loss and expense to the plaintiffs.
The plaintiffs also claimed that, at the second loadport, cargo was permitted to leak from tank 4C to tank 5C, and was thought to have been contaminated; they alleged that this also caused financial loss and expense, incurred in pumping the cargo back into the correct tank and in carrying out analyses to discover whether contamination had
in fact occurred. The total damages claimed amounted to about $143,000. Both alleged breaches occurred in the period March/April 1989.
No suit was brought within the ensuing year, the appointment of an arbitrator having only taken place in February 1992.
After some exchanges between the parties' agents and/or their solicitors throughout 1990 and 1991, the plaintiffs on the 16th December 1991 issued the originating summons claiming the declarations referred to above.
In refusing the declarations, Saville J. determined two points of principle in the defendants' favour and it is these two decisions which form the subject matter of this appeal.
The learned Judge also, in the exercise of his discretion, refused the extension of the time sought, and there is no appeal against that discretionary part of his order.
The case turns on the proper construction of the fourth paragraph of section 3(6) of the US Act ("the limitation clause") which is in the following terms:
"In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered."
The two issues of principle are:
(1) Do the words "loss or damage" refer only to physical loss of or damage to the goods, or do they extend to loss or damage related to goods?
(2) If the latter, does the time limit operate where the goods to which the loss or damage relates have never been loaded on the vessel?
The answer to the first question affects the entire claim since, if the plaintiffs are right, none of the claim is time barred, seeing that none of the loss or damage claimed was in relation to direct physical damage to the goods.
On the other hand the answer to the second question only affects a small part of the claim, which concerns cargo destined for loading on the vessel, but allegedly diverted to another vessel due to the delay in the start of loading.
The learned Judge disposed of both points shortly and succinctly, answering the two questions as follows:
"In the present case that time limit would have expired some time in April or May 1990. The question here is whether the claims that I have described in general terms are claims for loss or damage within the meaning of section 3(6) Carriage of Goods by Sea Act. In my view on the authorities they are. They are claims that relate to the goods in the sense described by Mr. Justice Pearson (as he then was) in Goulandris v Goldman [1958] 1Q.B. 74.
It is the case in the present instance that two items of the first head of claim relate to loss and expense in respect of goods which in the event were sent on another vessel, but it seems to me that this does not matter since they were clearly (and, indeed, the claim depends on this) goods which were at the time of the alleged breach intended to be carried on this vessel."
QUESTION 1.
The relevant sections of the US Act.
The context of the limitation clause both within the rest of section 3(6) and in the Act as a whole has an important bearing on the arguments of both sides. The full text of section 3(6) provides as follows:
"(6) Unless notice of loss or damage and the general nature of such loss or damage can be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice must be given within three days of the delivery.
Said notice of loss or damage amy be indorsed upon the receipt for the goods given by the person taking delivery thereof.
The notice in writing need not be given if the state of the goods as at the time of their receipt been the subject of joint survey or inspection.
In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided, That if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered.
In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods."
This is an exact counterpart of Article III Rule 6 of the Hague Rules, incorporated into English law by the Carriage of Goods by Sea Act 1924, with the exception (irrelevant for present purposes) that the proviso in the fourth paragraph is omitted in the latter.
Section 3(8) and section 4(1) and (2) of the US Act, which are the counterparts of Article III Rule 8 and Article IV Rules I and II of the Hague Rules, provide as follows:
"(8) Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with the goods, arising from negligence, fault, or failure in the duties and obligations provided in this section, or lessening such liability otherwise than as provided in this Act, shall be null and void and of no effect. A benefit of insurance in favor of the carrier or similar clause, shall be deemed to be a clause relieving the carrier from liability.
SECTION 4. (1) Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy, and to secure that the ship is properly manned, equipped, and supplied, and to make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried fit and safe for their reception, carriage, and preservation in accordance with the provisions of paragraph (1) of section 3. Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other persons claiming exemption under this section.
(2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from-
(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier, in the navigation or in the management of the ship;
(b) Fire, unless caused by the actual fault or privity of the carrier;
(c) Perils, dangers, and accidents of the sea or other navigable waters;
(d) Act of God;
(e) Act of war;
(f) Act of public enemies;
(g) arrest or restraint of princes, rulers, or people, or seizure under legal process;
(h) Quarantine restrictions;
(i) Act or omission of the shipper or owner of the goods, his agent or representative;
(j) Strikes or...
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