Fidelitas Shipping Company Ltd v V/O Exportchleb

JurisdictionEngland & Wales
Judgment Date29 July 1963
Judgment citation (vLex)[1963] EWCA Civ J0729-2
Date29 July 1963
CourtCourt of Appeal
Fidelitas Shipping Company Ltd.
V/O Exportchleb

[1963] EWCA Civ J0729-2


Lord Justice Harman

Lord Justice Pearson and

Lord Justice Ungoed-Thomas

In The Supreme Court of Judicature

Court of Appeal

From Mr Justice Megaw

MR R. A. MacCRINDLE Q.C.(instructed by Messrs Richards Butler & Co.)appeared as Counsel for the Appellants.

MR M. J. MUSTILL (instructed by Messrs Middleton, Lewis & Co.)appeared as Counsel for the Respondents.


This is an appeal from a decision of Mr Justice Megaw which is embodied in an order of the queen's Bench Division (Commercial List) of the 4th March, 1963. By this order the Court expressed an opinion on a question of law submitted by an Umpire appointed under an arbitration clause in the contract between the parties. This was the only question submitted to the Court for answer and the only order was that the special case be remitted to the Umpire to readjust the figures between the parties, he having by his award of the 21st November, 1962, decided the question the contrary way to that reached by the Judge.


The facts of the case are stated in detail in the Umpire's award and are further set out in the Judgment delivered by the learned Judge on the 4th March last and I shall not repeat them except so far as is necessary to make this Judgment intelligible. The claimants being owners of a motor vessel called the "Sophia" flying the Greek flag chartered it to the respondents on a grain carrying voyage first by a charterparty dated the 21st September, 1960, which provided for a voyage from Zhdanov on the Black Sea to Basrah on the Persian Gulf. The ship duly arrived at Zhdanov, as was required, on the 1st October and gave notice of readiness to load, but for some reason nothing happened until the 6th October when it was agreed to cancel the charterparty, and a new one was made on that date, which is one of the documents here in question. This was for a voyage to an English port. The only question before us and before Mr Justice Megaw is whether Clause 27 called the cesser clause, absolved the charterers from liability for delay in loading which came about by the events which happened at the port of loading between the 1st and the 23rd October, 1960. There was a number of other questions but these have been settled by the Umpire and we are not now concerned with them.


Clause 7 of the charterparty, which is styled "Commencement of lay days", provides that these days at port of loadingare not to count before the 1st October, 1960. This looks odd in a document dated the 6th October but it is explained by the fact that it comes from the earlier charterparty and that there was a contemporary oral agreement between the parties that loading time was to count from the notice already given on the 1st October under the earlier document. This oral agreement was eventually reduced to writing by a document dated the 12th October, 1960, which reads: "Addendum No'1 to charterparty per m.v. Sophia dated London 6th October, 1960, With reference to the above dated charterparty… time is to count,… from the notice already given and accepted at Zhdanov on the 1st October, 1960, under the vessel's original charterparty dated 21st September, 1960. All other terms, conditions and exceptions of the above charterparty remaining unchanged". This, whether physically annexed to the charterparty document or no, was plainly intended to and does in my opinion form part of it.


Delay was caused by disputes about the fitness of the vessel which have since been determined in favour of the owners. She completed loading on the 23rd October at Zhdanov when bills of lading were issued. The outstanding claim concerns demurrage during the period between the 1st and the 23rd October. The umpire held that the cesser clause did not protect the charterers: the Judge held the contrary.


Clause 27, so far as relevant, provides that the charterers' liability should cease when the cargo was shipped - "the owner or his agent having a lien on the cargo for freight, dead-freight, demurrage, lighterage at port of discharge and average". It was admitted before us that in this Court these words were apt to cover demurrage at the port of loading. Demurrage is dealt with by Clause 13 of the charterparty and its terms are set out in the Judgment. The other relevant document is the bill of lading, a document in Russian and English. The specimen before us shows typed into a box at the beginning of the documentthe words "All terms and conditions as per charterparty". It further provides for goods to be carried - "suect (sic) to all conditions terms and clauses inserted into this bill of lading". Further it is provided: "Nothing in this bill of lading, whether printed, or written, or stamped, shall limit or affect the above mentioned conditions". Lastly: "The shipper, the receiver of goods and the holder of the bill of lading as well as any other person interested hereby expressly accept and agree to all printed, written or stamped provisions terms and reserves of this bill of lading, including these on the back hereof". On the back is a number of clauses headed: 'The following are the conditions and exceptions hereinbefore referred to". Under Clause 12 are provisions for loading which are to some extent inconsistent with the like provisions in the charterparty. Clause 13 gives the carrier a lien in respect of "freight and all other charges and expenses duo under the contract of carriage".


The Umpire by his award decided that the chartererd liability for demurrage did not cease because according to him the addendum of the 12th October was not incorporated into the bill of lading by the reference in it to the terms and conditions of the charterparty. This was the first point taken by Mr MacCrindle and is purely one of construction., 'What do the words "as per charter-party" mean? Mr MacCrindle argued that this is a mere reference to the piece of paper headed "The Russian Black Sea and Azof Charterparty 1926" and dated the 6th October, 1960 under which the parties had contracted and that the collateral oral agreement later embodied in the letter of the 12th October is not imported. As a matter of construction I find this argument quite unconvincing. If one asked what at the date of the bill of lading, that is to say, the 23rd October. 1960, was the contract of carriage between these parties, it seems to mo clear that it was the charterparty of the 6th October as amended by the letter of the 12th October andthat any receiver of the goods who asked what the charterparty was must have been shewn these two documents. This is enough to resolve this point as the learned Judge did, but I am further inclined to agree with him that even witheut the addendum the reference in Clause 7 of the document of the 6th October would be enough to date the beginning of the lay days back to the 1st October. Accordingly in my judgment the appellants' first point fails.


The second point taken is upon the construction of the words of the cesser clause about the owner having a lien. It was argued on the authorities that the cesser clause has no operation except to the extent and in so far as it confers on the owner a lien corresponding to that which he had under the charterparty. Looking at these words alone I would agree that they are not apt to create a lien although they have been treated in some of the cases as theugh they do so. They are, however, in my judgment apt to operate as a proviso, that is to say, that you are to look and see whether in the hands of the receiver of the goods the owner will have, by virtue of the bill of lading or some other subsequent document, a comparable lien operative against the receiver. This is the way in which this type of clause was explained by Lord Davey in ( Hansen v. Harrold Brothers 1894., 1 queen's Bench, p. 612). where he said this at p. 620: "The argument for the defendants has failed to carry conviction to my mind. I am not going to say whether all the cases on the cesser clause are reconcilable, still less to attempt to reconcile them. I think that we may decide the present case witheut going counter to any of the earlier authorities. The general principle applicable, where the cesser clause is connected with the provision as to lien as in the present case, is laid down in Clink v. Radford. I will not repeat what has been cited from the judgments in that case, but it appears to me that Lord Justice Bowen put the principleto he applied on grounds that were logically as well as commercially sound. I will adopt Tor the purpose of argument the view contended for by the defendants' counsel, viz., that the intention is that the liabilities of the charterer shall cease when the vessel is loaded, and that there shall be in the place of them a lien for all freight and demurrage under the charterparty. We must, however, remember the principle laid down by Lord Justice Bowen in Clink v. Radford, viz., that where in a clause such as this there are linked together a provision as to cesser of liability and a corresponding provision as to lien, according to legal construction and grammar the two ought to be read as correlative provisions. It is to be observed that the words 'the master and owners having a lien, &c' do not create a lien; the lien arises subsequently on the goods shipped, and could only in this case come into operation when the vessel was rechartered. There are no goods on which a lion can be created at the time of the execution of the charterparty, and, so far as concerned the shippers, such a lien could not be created on their goods by the contract between the ship owners and the charterers. The words, therefore, do not themselves create a lien, but point to a lien to be created hereafter. They import, in my opinion, a contract to give or procure a lien. I should myself think it a reasonable construction to hold that the creation of...

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