Electrosteel Castings Ltd v Scan-Trans Shipping & Chartering Sdn Bhd

JurisdictionEngland & Wales
JudgeMr Justice Gross
Judgment Date09 October 2002
Neutral Citation[2002] EWHC 1993 (Comm)
CourtQueen's Bench Division (Commercial Court)
Date09 October 2002
Docket NumberCase No: 2002/316

[2002] EWHC 1993 (Comm)





The Honourable Mr Justice Gross

Case No: 2002/316

Electrosteel Castings Limited
Scan-trans Shipping & Chartering Sdn Bhd

Mr. Michael Collett (instructed by Hardwick Stallards) for the Claimant

Mr. Michael Ashcroft (instructed by Holman Fenwick & Willan) for the Respondent

Hearing date : 23 rd September, 2002

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

Mr Justice Gross



By an Interim Final Arbitration Award ("the award"), issued on the 28th February, 2002, the sole arbitrator ("the arbitrator"):

(1) Recorded that the parties had agreed that, pursuant to s.31 of the Arbitration Act 1996 ("the Act"), he should answer certain questions going to his own jurisdiction as preliminary points;

(2) Found that the Respondent ("Scan-Trans") was entitled to claim demurrage and/or damages for detention from the Claimant ("Electrosteel");

(3) Further found, that Scan-Trans was still entitled to bring this claim, notwithstanding that Electrosteel was no longer the owner of the cargo at the time the claim arose.


Electrosteel now applies to this Court:

(1) Under s.67 of the Act ("the s.67 application"), for an order that the award be set aside or varied, on the ground that, as Scan-Trans was not a party (as principal) to any contract with Electrosteel, there was, accordingly, no valid arbitration agreement between them - and no entitlement on the part of Scan-Trans to claim demurrage or detention from Electrosteel.

(2) Under s.69 of the Act ("the s.69 application"), for leave to appeal against the arbitrator's further finding, recorded in paragraph 1(3) above. It was made clear by Electrosteel that the s.69 application only arose in the event that Electrosteel failed on its s.67 application.



Before going further, it is convenient to dispose of the s.69 application. As I indicated to the parties during the hearing, leave would be refused, regardless of the view to which I came on the s.67 application. Assuming, without deciding, in favour of Electrosteel that the term in question was incorporated into the relevant contract between the parties, the arbitrator's construction of that term was right or, at least, not obviously wrong. Further, the suggested question of law was not one of general public importance. These conclusions do not, however, assist Scan-Trans unless it is successful in resisting the s.67 application. It is unnecessary to say more of the s.69 application.



I return to the s.67 application. The facts are these. A part-cargo ("the cargo") of some 1447 bundles of ductile iron pipes and 50 packing cases containing rubber gaskets and lubricants was transported from Calcutta to Algiers. There was, allegedly, delay at Algiers and Scan-Trans claims demurrage or damages for detention from Electrosteel. As already foreshadowed, the central question is whether Scan-Trans was a party, as principal, to any contract with Electrosteel.


Negotiations for the carriage of the cargo were conducted between Scan-Trans (from its Malaysian office) and Electrosteel, through Marcons Shipmanagement Pvt Ltd of Mumbai ("Marcons"). For present purposes and deferring for the moment questions as to their admissibility, the principal communications may be summarised as follows:

(1) On the 27th October, 2000, Mr. Jesper Svenstrup of Scantrans ("Mr. Svenstrup") telexed Captain Adil Vesuvela of Marcons, saying this:

"Ref telcon this mrng Carrier's are prepared to fix along below lines …

Carrier: East Enterprise & Transport Association Ltd, Nassau Bahamas…

Adil, can we get around not paying frt tax as Carrier's are situated in Bahamas, we here act only as agents for Carrier's"

(2) On the same day, Marcons replied to Scan-Trans:

"merchants counter on accept/except basis asf …"

There followed the details of the Electrosteel counter at that stage. Captain Vesuvela asked Scan-Trans to counter firm on an accept/except basis and then added this:

"jesper, if the frt beneficiary is in Bahamas, then full frt tax of 3.6 pct is payable. If you can have a danish frt beneficiary (say monsted) with proper documentation, 100 pct frt tax relief is avlbl. we must make the booking note and remit the frt accdngly."

(3) On the 28th October, 2000, Mr. Svenstrup responded by telex:

"Thanks very much Chrt s counter which on behalf of Carrier's A/E reply 30 mins Carrier's: Scan-Trans Shipping & Chartering Sdn Bhd, Kuala Lumpur or nom on behalf of Carrier's"

(4) Still on the 28th October, Marcons reverted with the merchant's (ie. Electrosteel's) counter, recording (amongst other things) a request that "all carrier's subs to be lifted by 14.00 hours IST on 30/10/2000". In the course of the hearing it was clarified that IST meant Indian Standard Time. Captain Vesuvela now awaited Mr. Svenstrup's "acceptance of abv in order draw out the b/n".

(5) Finally on the 28th October, 2000, there came the "recap telex" from Scan-Trans to Marcons:

"We are pleased to recap fixture with no subs from merchant's side and only, carrier's subject checking costs in Algeria and Master approval of stowage. "SOCOFL STREAM" or sister sub

Carrier: Scan-Trans Shipping & Chartering SDN Bhd, Kuala Lumpur or nom


- Electro Steel, Calcutta

- Conline B/N 2.5 pct ttl YE

- Subject checking expenses in Algeria

- Subject to Master's approval of stowage


Please confirm this recap is in accordance with your notes, and issue and get the Booking Note signed."


A Booking Note was drawn up by Marcons and signed by both Electrosteel and Scan—Trans on the 30th October, 2000 ("the Booking Note"). As will become apparent, the status of the Booking Note was very much in dispute; Electrosteel argued that it contained the contract between the parties; Scan-Trans submitted that, at most, it evidenced the contract (already made in or evidenced by the recap telex). Further, the terms of the Booking Note are in one particular respect in dispute, as explained below. Postponing for the time being the argument as to the status of the Booking Note and before recording the terms or alleged terms of the Booking Note, it is first necessary to describe the physical make-up of the Booking Note, to note the sequence in which it came to be signed and to identify the pages signed.


In physical terms, the Booking Note comprised three pages:

(1) Page 1 of the "Conlinebooking Liner Booking Note" form, a pre-printed form headed "Full Terms of the Carrier's Bill of Lading Form*". Nineteen numbered clauses were set out, together with two "Additional Clauses", lettered "A" and "B". (For completeness, "A" was the clause with which the s.69 application was concerned.)

(2) Page 2 of the "Conlinebooking Liner Booking Note" form, as amended - a matter to which I shall return. This page contained numbered boxes completed by the parties.

(3) A document headed "Additional Clauses to MV "SOCOFL STREAM" - Conline B/N dated 30.10.2000" containing typed clauses (aa) to (kk).


As to the sequence in which the Booking Note came to be signed, it was common ground (or not in dispute) that: (1) Marcons drew it up and faxed it, unsigned, on the 28th October, 2000 to Electrosteel for signature; (2) on the 30th October, Electrosteel signed it and returned it to Marcons; (3) on the 30th October, Scan-Trans, having received it from Marcons, signed by Electrosteel, themselves signed it; (4) still on the 30th October, it was faxed back by Marcons to Electrosteel, now containing the signatures of both parties.


With reference to the pages of the Booking Note already physically identified, the parties signed page 2 of the "Conlinebooking Liner Booking Note" form (as amended) and the document headed "Additional Clauses to MV "SOCOFL STREAM" - Conline B/N dated 30.10.2000". The parties did not sign page 1 of the "Conlinebooking Liner Booking Note" form.


Turning to the terms of the Booking Note, the parties were, as already foreshadowed, in dispute as to which of the terms on page 1 of the "Conlinebooking Liner Booking Note" form were incorporated therein. For convenience, I shall record the material terms (or alleged terms), in the following order: first, those found on page 2 of the "Conlinebooking Liner Booking Note" form (as amended) ("[page 2]"); secondly, those found on the document headed "Additional Clauses to MV "SOCOFL STREAM" - Confine B/N dated 30.10.2000" ("[additional clauses]"); thirdly, those found on page 1 of the "Conlinebooking Liner Booking Note" form ("[page 1]").

(1) [page 2]

"2. Place and date

Calcutta/30 Nov 2000



Scan-Trans Shipping & Chartering SDN BHD, Kuala Lumpur, Malaysia or Nominee


Merchant (see clause 1)

Electrosteel Castings Ltd Calcutta, India


Vessel's name



Description of goods

- Abt 6850 CBM/abt 3265 MT ductile iron pipes in bundles + packing cases

- As part cargo carriers option

- Full cargo to be loaded. No shut out


Demurrage rate (if agreed)

USD 6,000 per day/prorata


Special Terms, if agreed

Additional Clauses aa) to kk) both inclusive to be considered fully incorporated in this Booking Note

Signature (Carrier)

[stamp of Scan-Trans and Mr. Svenstrup's manuscript signature]

As agents only



Signature (Merchant)

For Electrosteel Castings Ltd.

B. Govindarajan

Dy. General Manager-Exports

Dt: 30/10/00

(2) [additional clauses]

dd) Documents/cargo to be ready prior vessel's arrival in port. Merchants to present/receive cargo under vessel's hooks as fast as vessel can load/discharge Merchants not responsible for any berthing...

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