Cho Yang Shipping Company Ltd v Coral (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HOBHOUSE,LORD JUSTICE EVANS,LORD JUSTICE HUTCHISON |
| Judgment Date | 15 May 1997 |
| Judgment citation (vLex) | [1997] EWCA Civ J0515-6 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | CCRTF 96/0280/C |
| Date | 15 May 1997 |
[1997] EWCA Civ J0515-6
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
(HIS HONOUR JUDGE HALLGARTEN QC)
Royal Courts of Justice
Strand
London WC2
Lord Justice Evans
Lord Justice Hobhouse
Lord Justice Hutchison
CCRTF 96/0280/C
MR S CROOKENDEN QC (instructed by Messrs Clyde & Co, London EC3M 1JP) appeared on behalf of the Appellant/Plaintiff.
MISS P MELWANI (Instructed by Messrs Stockler Charity, London EC4A 1NE) appeared on behalf of the Respondent/Defendant.
Introduction:
In this action the Plaintiff shipowners, Cho Yang Shipping Co Ltd of Seoul, Korea, seek to recover freight from the Defendants, Coral (UK) Ltd of London W1, under three bills of lading issued in Hamburg for the carriage of containers containing sugar from Hamburg and Bremerhaven to Dubai and Mina Qaboos. Each bill of lading was issued in Hamburg by EOS Europa-Overseas Schiffahrtsargentur GmbH (EOS), the Plaintiffs' German agents, and related to the carriage of 20 containers.
The action was tried in the Central London County Court by Judge Hallgarten QC. Documentary and oral evidence was adduced. In February of last year he gave judgment for the Plaintiffs against Coral. Coral have appealed to this Court.
The three shipments were —
25 June 1993 per The DRS Rostock
30 June 1993 per The Cho Yang Success
16 July 1993 per The St Petersburg Senator
Only the second of these vessels was owned by the Plaintiffs but they were all sailing as part of the liner service operated by the Plaintiffs and the bills of lading were issued by EOS on their behalf. It is accepted that, apart from one point which can be left on one side until later in this judgment, all three shipments raise the same question and that it suffices to refer to the second shipment on the Success.
The bill of lading:
The Success bill of lading was (like the others) on the Plaintiffs' form for issue by EOS. It was dated Hamburg 30 Juni [ie June] 1993. It named Coral as the shippers and consigned the goods to their order. The port of loading was Bremerhaven and the discharge port was Mina Qaboos. In the box headed "Particulars Furnished By Shipper" there appeared, besides the marks and description of the goods, the words "'Freight Prepaid'" and "Clean On Board". Before it was issued there was added—it must have been by EOS—the stamped words "Freight Prepaid As Arranged" as well as "Shipper's Load, Stow And Count" and "Shipped On Board 30 Juni 1993". (This statement was not correct as to the knowledge of EOS the containers were not in fact shipped on board until 8th July; but nothing turns on this in the present case.) The form used stated that freight was payable at Hamburg. The box provided for "Freight Rates Charges" was left blank save for two stipulations that certain charges at the discharge port should be paid by the consignee. The back of the bill of lading contained typical liner clauses. The definitions of "merchant" and "charges" included respectively the shipper and freight. Charges were deemed to be fully earned on receipt of the goods to be paid non-returnable in any event. There was a wide lien clause. There was no further clause dealing with freight as such; there was a clause which referred to the Plaintiffs' tariff but no reliance has been placed on this and it was not in evidence. The wording of the bill of lading was all in the English language. It was expressly made subject to Korean law and jurisdiction.
The legal context:
In the absence of some other consideration, the shipper is contractually liable to the carrier for the freight. (Scrutton, 20th Edn, Art.172) This is because the carriage is for reward and the personal liability to pay the reward is a contractual liability (whether the carriage was as a common carrier or pursuant to a 'special' contract). The personal liability is that of the person with whom the performing carrier has contracted to carry the goods. This person is normally the shipper. ( Domett v Beckford 5 B & Ad 521) But the shipper may be shipping as the agent of the consignee in which case the contract will be with the consignee. (eg Fragano v Long 4 B & C 219, Dickenson v Lano 2 F & F 188) A contract to pay the freight will not always be implied from the fact of shipment and the issue of a bill of lading. ( Smidt v Tiden LR 9 QB 446) It is possible for there to be more complex contractual schemes; the performing carrier may be in contractual relations with others as well, as, for example, where there is a voyage or time charter; this can affect the position.
In English law the bill of lading is not the contract between the original parties but is simply evidence of it. (eg The Ardennes [1951] 1 KB 55) Indeed, though contractual in form, it may in the hands of a person already in contractual relations with the carrier (eg a charterer) be no more than a receipt. ( Rodocanachi v Milburn 18 QBD 67) Therefore, as between shipper and carrier, it may be necessary to inquire what the actual contract between them was; merely to look at the bill of lading may not in all cases suffice. It remains necessary to look at and take into account the other evidence bearing upon the relationship between the shipper and the carrier and the terms of the contract between them. (Scrutton Art 33) The terms upon which the goods have been shipped may not be in all respects the same as those actually set out in the bill of lading. It does not necessarily follow in any given case that the named shipper is to be under a personal liability for the payment of the freight.
As will be readily appreciated, the inclusion of the words 'freight prepaid' in the bill of lading does not of itself show that the shipper is not to be under any liability for the freight if it has not in fact been paid. (eg The Nanfri [1979] AC 757) Such words are not, in English law, words of contract (eg Compania Vascongada v Churchill [1906] 1 KB 237) and their insertion in the bill of lading does not without more serve to negative a preexisting, undischarged, contractual liability to pay the freight. Indeed, a request to the carrier that he issue a freight prepaid bill of lading before the freight has in fact been paid would normally imply a personal undertaking by the person making the request that it would be paid. (cf the implied indemnity where a charterer requests the master to sign bills of lading: The Caroline P [1984] 2 Lloyds 466.) Thus, in the present case, the mere inclusion of those words in the bill of lading does not preclude a liability of Coral for the freight but it is part of the evidence to be taken into account when considering whether or not Coral were under a contractual liability to the Plaintiffs for the freight.
The parties have argued this case solely upon the basis of English law. No foreign law has been pleaded nor has any evidence of it been adduced. There is a certain artificiality about this. The shipment was at a German port and the bill of lading was issued in Germany. In German law a bill of lading has a different contractual status. A German Court has already considered a similar claim by the Shipowners against another shipper, a German company.
The facts of this case:
The primary facts are not now in dispute: the findings of the Judge are accepted. In this case the shipment of the containers of Coral's sugar on the Success arose from a chain of contractual relations. Coral contracted with Nortrop Speditions- und Schiffahrtsgesellschaft mbH of Hamburg. Nortrop contracted with Interport Speditions- und Befrachtungskontor Stoob GmbH also of Hamburg. Interport contracted with EOS the Hamburg agents of the Plaintiffs acting on their behalf. The relevant contracts related to other shipments besides those concerned in this case. The communications relevant to the making of the various contracts extended back to the preceding September, 1992. It is not necessary to trace the steps by which the contracts came about. They seem to have originated from a long term contract between Interport and Nortrop. The Judge held that in all the relevant transactions the parties were dealing with each other as principals and not as agents (apart from EOS).
The contracts were not mere booking contracts; they were contracts for the carriage of certain numbers of containers during stated periods from German ports to Gulf ports at stated freights. It is not now in dispute that as a result of each of these contracts the one party became liable to pay to the other, for each shipment made, the freight which those two parties had agreed upon between them. Thus Coral became liable to pay to Nortrop US$1010 per container, Nortrop to pay to Interport US$1000 and Interport to pay to EOS (as the agents of the Plaintiffs) US$980 less 2 1/2% commission. At all material times Coral had no knowledge of the existence of Interport and had no dealings with them; similarly they had no knowledge of any freight rate other than the $1010 to which they had agreed. Nortrop had no authority to impose any liability upon Coral to pay freight to the performing carrier (whoever it might be). The agreement between Coral and Nortrop was that Coral would pay Nortrop the freight they had agreed, not any one else. Nortrop gave no authority to Interport to contract on behalf of Coral; Nortrop did not disclose to Interport the identity of the goods owners.
It was also part of each contract that an owner's freight prepaid liner bill of lading would be issued. At the relevant times in Hamburg there was an Association of forwarding agents, shipping companies and shipping...
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