Ceval International Ltd v Cefetra BV
| Jurisdiction | England & Wales |
| Judge | Evans,Peter Gibson,Henry L JJ. |
| Judgment Date | 23 November 1995 |
| Date | 23 November 1995 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal (Civil Division)
Evans, Peter Gibson and Henry L JJ.
Nicholas Hamblen (instructed by Holmes Hardingham Walser Johnston Winter) for the appellant buyers.
Angus Glennie QC (instructed by Middleton Potts) for the respondent sellers.
The following cases were referred to in the judgment of Evans LJ:
Congimex Companhia Geral de Comercio Importadora Exportadora SARL v Tradax Export SAUNK [1981] 2 Ll Rep 687.
Pyrene Co Ltd v Scindia Navigation Co LtdELR [1954] 2 QB 402.
Bill of lading — GAFTA 100 contract of sale — Discharging costs — Goods shipped “liner out”— Sellers refused to pay costs of discharge — Payment made by buyers — Indemnity sought from sellers — Whether seller obliged to indemnify buyers for costs of discharge from hold to ship's rail.
This was a buyers' appeal against a decision of Longmore J in the Commercial Court allowing an appeal against a decision of GAFTA appeal arbitrators, who had set aside the original arbitration awards. The issue was whether cl. 20 of a widely used bill of lading obliged the receiver of goods discharged from the carrying vessel to pay the costs of discharge from the hold to the ship's rail.
The sellers entered into a chain of two contracts of sale with the buyers for the sale of soya bean meal pellets. The contracts of sale were on c.i.f. terms with delivery at Ghent. They incorporated GAFTA Form 100, by cl. 16 of which the cost of discharge from) hold: to ship's rail was for sellers” account and from ship's rail over board for buyer's account. By cl. 20 of the bill of lading the merchant was responsible for the cost of discharge arranged by the carrier's agents. “Merchant” was defined as including the shipper, the consignee, the holder of the bill of lading, the receiver and the owner of goods; Clause 20 was contained in a printed form widely used in the liner trades, where goods were carried in individual parcels and consequently the shipowner always undertook to arrange and to bear the costs of discharge, at least to the ship's rail.
The cargo was shipped on liner terms to Ghent, where — the grain silo operators refused to begin discharge without? receiving payment or a guarantee for the costs of discharge from the hold, to the ship's rail. The buyers telexed the sellers for payment or a guarantee. The sellers refused. To obtain the cargo the buyers paid and; sought reimbursement from the sellers of the costs of discharge to the ship's rail. The invoices remained unpaid. The buyers began arbitration proceedings, contending that the terms of the bill of lading imposed liability on the sellers for all discharging costs.
The arbitration award in favour of the sellers was set aside by the Board of Appeal of GAFTA, which found the sellers liable to reimburse the buyers for the discharging expenses. Longmore J in the Commercial Court allowed the sellers' appeal and certified that the question of law on the construction of cl. 20 of the bill of lading was of general public importance under s. 1(7) of the Arbitration Act 1979. The buyers appealed.
Held, allowing the buyers' appeal:
1 Clause 20 of the bill of lading was concerned with the practical arrangements for working out the terms agreed between the shipper and the shipowner before the goods were shipped. The terms “liner out” agreed in the booking note at the time of shipment remained binding on the shipowner and those terms did not oblige the buyers, as between themselves and the shipowner, to bear the costs of discharge inboard the ship's rail.
2 The clear words of cl. 20, para. 2, “the merchant paying the actual cost of such operations directly to the stevedores or carriers” agents”, required the buyers as receivers to pay the cost of the whole discharge operation either to the stevedores direct or to the carriers” agents if demanded by them. Those words did not limit the unqualified undertaking in cl. 16 of the contracts of sale. They provided for the practical arrangements, which were that in all cases the shipowners were to appoint the stevedores and the buyers were to pay the actual costs, independently of the liabilities agreed and of the final settlement of account between the parties.
3 Clause 20 therefore required the buyers to pay the whole of the stevedores” costs of discharge even though as between themselves and the shipowners the delivery terms were “liner out”. Under cl. 16 of the sale agreement the buyers were obliged to pay the stevedores” costs under the delivery orders tendered by the sellers. In so far as those included costs incurred inboard of the ship's rail, the buyers were entitled to recover an indemnity from the sellers in respect of them.
Evans LJ: The issue in this appeal is whether cl. 20 of a bill of lading form which we are told is in widespread use obliges the receiver of goods discharged from the carrying vessel to pay the costs of discharge for that part of the discharging operation, namely, from the hold to the ship's rail, which are or may be for the account of the shipowner.
These costs, as well as those of the second part of the discharging operation, from the ship's rail to the shore, were in fact paid by the receivers in the two cases under appeal. The question is whether under the bill of lading terms they were bound to do so. If they were, then they can recover an indemnity against the payments from the sellers of the goods to them. That is because the sellers undertook in the contracts of sale that they would provide shipping documents which as between the buyers/receivers and the shipowner would not make them liable for those costs: see Congimex v TradaxUNK[1981] 2 Ll Rep...
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