David Agmashenebeli, The (Cargo owners) v The David Agamashenebeli (Owners)
| Jurisdiction | England & Wales |
| Judge | Colman J |
| Judgment Date | 31 May 2002 |
| Court | Queen's Bench Division (Admiralty) |
| Date | 31 May 2002 |
[2002] EWHC 104 (Admlty)
Queen's Bench Division (Admiralty Court).
Colman J.
T Saloman QC and K Maxwell (instructed by Ince & Co) for the claimants.
S Hofmeyr QC and P MacDonald Eggers (instructed by Richards Butler) for the defendant.
The following cases were referred to in the judgment:
Boukadoura Maritime Corp v Marocaine de l'Industrie et du Raffinage SA (The Boukadoura)UNK [1989] 1 Ll Rep 393.
Caparo Industries plc v DickmanELR [1990] 2 AC 605.
Compania Naviera Vasconzada v Churchill & SimELR [1906] 1 KB 237.
Hedley Byrne & Co Ltd v Heller & Partners LtdELR [1964] AC 465.
Heskell v Continental Express LtdUNK (1950) 83 Ll L Rep 438.
James McNaughton Paper Group Ltd v Hicks Anderson & CoELR [1991] 2 QB 113.
Korle Lagoon, The (24 June 1971, High Court at Brussels).
Meyerstein v Barber (1866) 2 CP 38; (1870) LR 4 HL 317.
National Petroleum Co v AthelviscountUNK (1934) 48 Ll L Rep 164.
Naviera Mogor SA v Societe Metallurgique de Normandie (The Nogar Marin)UNK [1988] 1 Ll Rep 412.
Oceanfocus Shipping Ltd v Hyundai Merchant Marine Co Ltd (The Hawk)UNK [1999] 1 Ll Rep 176.
Peter de Grosse, TheELR (1875) 1 PD 414.
Rasnoimport V/O v Guthrie & Co LtdUNK [1966] 1 Ll Rep 1.
Reney v Kirkcudbright MagistratesELR [1892] AC 264.
River Gurara v Nigerian National Shipping Line Ltd [1997] CLC 1322; [1998] QB 610.
Rosario, The SS (3 Nov 1967, High Court at Brussels).
Sidney J Groban and Union Tractor Ltd v SS Pegu and Elder Dempster Lines LtdUNK (1971) 331 F Supp 883.
Silver v Ocean Steamship Co LtdELR [1930] 1 KB 416.
Spring v Guardian Assurance plcELR [1995] 2 AC 296.
Taylor v BurgerUNK (1898) 8 Asp MLC 364.
Trade Star Lines Corp v Mitsui & Co Ltd (The Arctic Trader) [1997] CLC 174.
Shipping — Bill of lading — Title to sue — Shifting berth — Extent of duty of shipowner and master to state apparent order and condition of goods in bills of lading — Master entitled to clause bills because of discoloration of cargo but in breach of duty by failing to state extent of discoloration — Cargo owners not entitled to damages since as matter of causation master entitled to issue claused bills and would probably have done so — Claimant had title to sue and rights of suit had not been transferred to buyer — Transference of bill of lading after it had ceased to be document of title was pursuant to antecedent agreement — Claimant entitled to recover berth shifting expenses after master wrongfully failed to shift to berth — Carriage of Goods by Sea Act 1992, s. 2(2)(a).
This was an action by cargo owners against shipowners raising the question of the circumstances in which a master was entitled to decline to sign clean bills of lading.
In 1995 Transmarine sold to Agrosin 35,000 metric tons of urea in bulk FOB Kotka, Finland. The goods specification was “white colour, free flowing, free from contamination, prilled form, treated against caking, free from harmful substances, production of Novgorod Acron, Russia”. Agrosin then on sold 35,000 metric tons of urea in bulk C & F Free Out CQD one safe berth, one safe port South China for delivery during May 1995. The cargo was carried on the David Agmashenebeli which was subchartered by Agrosin from Baff which had the vessel on a voyage charter from Meezan which had time-chartered the vessel from its owner, Georgian Shipping. Under the time charter the master was to sign, if required to do so by charterers, bills of lading for cargo as presented, in conformity with mate's or tally clerk's receipts. Clause 45 of the voyage charter provided that no damaged cargo was to be loaded into the holds. In such circumstances the master had the right to stop loading but charterers and shippers were “to be immediately informed to arrange removing of any contaminations for charterers” expenses/time”.
The vessel arrived at Kotka and gave notice of readiness to load. There was a dispute as to whether the holds had been properly cleaned. After further cleaning loading commenced but within three hours the master sent messages to all parties stating that the cargo contained rust, plastics and other contaminants and was of a dirty colour. The master drew up a letter of protest. Agrosin's surveyor reported that about 0.1-0.2 per cent of the prills were “somewhat discoloured yellow or beige of various shades”, and further that “the loaded commodity is somewhat dirty in the surfaces in the ship's holds due to the using of dirty trimming equipment in the ship's holds”. He regarded the contamination as trivial and the discoloration as minor and unimportant. The mate's receipt was claused with the following wording “Cargo discoloured also foreign materials, e.g. plastic, rust, rubber, stone, black particles found in cargo”. There then began a dispute involving the shipowners, Meezan and Agrosin as to whether similar clausing should appear in the bills of lading which had not yet been issued. Agrosin presented two draft clean bills of lading to Baff for shipowners” approval. The description of the goods included “Bulk Urea”, “colour white” and “Prilled Free Flowing at Loading Free from Harmful substances”. The bills of lading signed on behalf of the master were claused with the same words as the mate's receipt. They identified Agrosin as the shipper and described the urea in the same manner as the mate's receipt. Agrosin accepted the claused bills of lading under protest and without prejudice to its rights to challenge the entitlement of the master to clause the mate's receipt or the bills.
Agrosin's buyer had sold on the cargo to Guangxi. By reason of the refusal of the master to sign clean bills of lading Agrosin declined to pay the freight due under the sub-voyage charter with Baff; the latter withheld voyage charter freight from Meezan and the latter withheld time charter hire due to the shipowners under the head charter and the shipowners threatened to lien the cargo to secure their hire. Agrosin having paid Acron direct under its purchase contract, could not obtain payment under the documentary credit opened by Guangxi. To enable the vessel to enter the discharge port and deliver its cargo Agrosin, Meezan and the shipowners created a documentary and contractual structure under which Agrosin presented the mate's receipt and accepted claused bills of lading under protest and without prejudice. The bills were signed on behalf of the master, claused with the same words as the mate's receipt, but showed the shipper as Agrosin and were consigned to order. In the box headed “Place and date of issue” appeared the words “London UK” and “as at Kotka Finland Port 4/5/95”. In accordance with the parties” agreement, Agrosin presented the three bills back to the shipowners” representative in London who then marked two out of three “Accomplished” and returned those two bills to Agrosin's representatives, while retaining the third and issuing to Agrosin an acknowledgement of receipt by the ship of that bill. The discharge of the cargo then began. After agreeing a reduced price for the cargo Agrosin discounted the letter of credit with its bank, with the consent of Guangxi, and released the cargo to its buyers. The bills of lading were afterwards transferred to the Bank of China.
On discharge the cargo surface was found very slightly wet mostly due to condensation which was stated to be normal. Surface cargo was also found very slightly contaminated by coal dust and rust which was considered to have dropped from the hatch covers and not to be serious. Most of the cargo was found in white colour, only a very small part was in yellowish colour. The receivers complained to the master that many parts of the cargo were contaminated by coal dust and rust caused by the vessel and that there was also water damage which made the cargo very dirty and hard and difficult to discharge. The independent inspector reported that the cargo itself was found in normal condition, free flowing and white in colour. All the stains, contamination, discoloration and wet damage were caused by the unclean condition of the cargo holds and various parts of the ship's structure and/or rainwater (due to hatch covers leaking) mixed with coal/rust dust from the ship and/or dirty shore grabs and/or oil leaking from the bulldozer at discharge. The total quantity of damaged or contaminated cargo was estimated at 279.2 metric tons, i.e. 0.8 per cent. The inspection found no evidence of foreign materials such as plastic, rubber and stone as mentioned in the master's remarks on the bill of lading.
The claimants argued that the master's clausing of the bills of lading amounted to a breach by the shipowners of the contract of carriage. The defendant shipowners contended that the claimants had no title to sue and that the ultimate receivers or their buyers had title to sue. The claimants also contended that the master unjustifiably declined to take the vessel into its discharging berth at the time when the harbour master had indicated that this should be done, in consequence of which the claimants suffered additional expenses by way of payments to the port authority.
Held, ruling accordingly:
1. Under art. III, r. 3 of the Hague and Hague-Visby Rules the bill of lading was required to show the apparent order and condition of the goods. A refusal to issue a bill which made any statement as to the apparent order and condition of the goods would thus be a failure to comply with the contractual obligation imposed by the rule.
2. The contractual obligation that the bill of lading should state the apparent order and condition of the goods required that the master should make up his mind whether in all the circumstances the cargo, in so far as he could see it in the course and circumstances of loading, appeared to satisfy the description of its apparent order and condition in the bills of lading tendered for signature. If...
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