Glencore International AG v MSC Mediterranean Shipping Company SA and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Andrew Smith |
| Judgment Date | 10 July 2015 |
| Neutral Citation | [2015] EWHC 1989 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2013 FOLIO 424 |
| Date | 10 July 2015 |
[2015] EWHC 1989 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Andrew Smith
Case No: 2013 FOLIO 424
John Passmore QC (instructed by Gateley plc) for the Claimant
Yash Kulkarni (instructed by Duval Vassiliades) for the First Defendant
Hearing dates: 6 & 7 July 2015
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.
Glencore International AG ("Glencore") claims against MSC Mediterranean Shipping Company SA ("MSC") damages for breach of contract, bailment and conversion in relation to a cargo of three containers of cobalt briquettes. The cargo had been been shipped from Fremantle to Antwerp on the "MSC Eugenia" under a bill of lading (the "B/L") issued by MSC and dated 21 May 2012. The B/L permitted transhipment, and the goods were transferred to the "MSC Katrina" before they arrived. It named Glencore as the shipper, and C Steinweg NV ("Steinweg"), Glencore's agents at Antwerp, as "Notify Parties". It was a negotiable bill, the consignee box being completed "to order". There is an express choice of English law as applicable to the B/L, and the parties agreed upon exclusive jurisdiction of the English High Court.
Glencore complains that only one of the containers was delivered and the other two were misappropriated. The evidence does not show quite what happened to the missing containers, but it is common ground (and recorded as such in the list of issues) that they were "delivered to unauthorised persons". MSC contends that it complied with its obligations and is not responsible for the loss, or that Glencore is estopped from alleging otherwise. It raises no other defence. Other issues on the pleadings have been agreed: there is no longer any dispute about Glencore's title to sue, and damages have been agreed, subject to liability, at $1,109,364.78. Glencore has not pursued a claim against the second defendant, MSC Home Terminal NV ("MSC Home"). Both parties proceeded on the basis that the issues are all to be decided by reference to English law.
The trial took place over two days. I am grateful to the parties' advisers: the papers were in excellent order, and counsels' submissions were clear, precise and succinct. Glencore was represented by Mr John Passmore QC, and MSC by Mr Yash Kulkarni. Glencore called two witnesses: Ms Corin Gautschi, whom it employs as a "Contract Administrator" and who has overall responsibility for the logistics and operation of Glencore's cobalt contracts, but was not directly involved with this shipment; and Mr Charles Reynolds-Payne, a Commercial Manager at Steinweg with overall responsibility for its warehousing operations at Antwerp. MSC called no oral evidence. It put in evidence under the Civil Evidence Act, 1995 statements of Ms Evy Soen, who at the relevant time worked as a Commercial Assistant in the Import Operations Department with Mediterranean Shipping Company Belgium NV ("MSC Belgium"), the local agent for MSC; Mr Wouter Bassier, an Import Manager of MSC Belgium; and Mr Geert Dreessen, MSC Belgium's Chief Information Officer. MSC did not make Ms Soen or Mr Bassier available for cross-examination, and Glencore did not wish to cross-examine Mr Dreesen.
When the cargo arrived at Antwerp, it was handled under an electronic release system ("ERS") used for containerised cargo at the port terminal. In essence, under the ERS carriers do not issue paper delivery orders or release notes against bills of lading, but instead provide computer generated electronic numbers (or "import pin codes"), which holders of bills present to the terminal and so take delivery of their goods. The B/L contained this express term: "If this is a negotiable (To order/of) Bill of Lading, one original Bill of Lading, duly endorsed must be surrendered by the Merchant to the Carrier … in exchange for the Goods or a Delivery Order". Glencore argues that therefore, as a matter of construction of the B/L or by implication, MSC should have delivered the cargo only on presentation of it or a delivery order given in exchange for it. MSC contends that it handled the cargo in accordance with the express terms of the B/L properly interpreted or an implied term that permitted use of the ERS or in accordance with an agreement varying the B/L's original terms. Alternatively, it contends that Glencore is estopped from disputing that MSC was entitled to act as it did because of its pattern of previous dealings with Steinweg. The issues about previous trading and variation include questions about Steinweg's authority in this regard.
The ERS was introduced with effect from the start of 2011. Under it, when a consignee or its local agents presented a bill of lading and paid freight and other charges, the carrier sent to it at a designated email address a release note, which provided the addressee with a pin code. Each code was automatically generated by the system and corresponded with a code stored (under encryption) in the Port Authority's data base. As I understand the evidence and find, the shipping company and its agent had no access to it. The ERS was introduced as an alternative procedure to the existing practice at Antwerp whereby, when bills of lading were presented, carriers exchanged them for documents that were presented to the terminal to take possession of goods. According to Mr Dreesen, it was thought carriers would see commercial advantage in adopting the more efficient ERS, but it is not mandatory and still has been adopted by only some of the carriers who operate to the Port of Antwerp.
At around the end of August 2010, the Antwerp Port Authority (or Alphaport) circulated a notice about the proposed ERS. By a resolution of 3 September 2010, the Port Authority approved two sets of "model terms": a "model covenant between the terminal operator and the shipping company or its ship's agent for the electronic release of containers in the Port of Antwerp" (the "operator's covenant"), and a "model covenant between the shipping company or its ship's agent and the forwarder for the electronic release of containers in the Port of Antwerp" (the "forwarder's covenant"). Articles 1 and 2 of the operator's covenant included the following:
"Article. 1: Obligatory use of the electronic release procedure
For the purpose of delivering full import containers, the parties hereby agree only to use an electronic release procedure in which:
1) the container is released by the shipping company or its ship's agent, to the consignee or the latter's representative, by communicating an electronic release code generated individually for each container, which is also communicated to the terminal operator;
2) delivery of the container by the freight handler to the consignee or the latter's representative can only be made once the latter has entered the container number together with the corresponding release code mentioned under (1) above in the terminal operator's ICT system.
The release procedure mentioned in the first paragraph is governed by this covenant. …
Article 2: Exclusion of other procedures and codes
The release procedure mentioned in art. 1 replaces all other release procedures previously used by the parties.
No right of delivery may be conferred by any codes or references other than the release code mentioned in art. 1, such as the booking number".
Articles 2 and 3 of the forwarder's covenant were materially identical.
The operator's covenant also provided that:
i) "These conditions apply without prejudice to the applicable legal and contractual provisions governing liability for loss and damage to cargo" (article 1);
ii) "The shipping company or ship's agent can at any time announce that the release has expired or has been withdrawn.
The parties can agree that the release shall expire de jure if the container is not collected within the free period.
In particular, the release can be cancelled on the orders of the competent authority.
If the release expires or is cancelled, then the terminal operator shall not deliver the container …" (article 4).
There were also provisions about the "release" being withdrawn in an appendix to the forwarder's covenant, which dealt with "Conditions for the electronic release of containers in the Port of Antwerp":
iii) "If the container is not collected within free period as specified either in the release notice or in other applicable rules or regulations, then the release of the container may be withdrawn without notice and demurrage shall be owed …" (article 3);
iv) The release may be withdrawn during the free period if additional costs are incurred, or in other special cases. This withdrawal of release shall be notified to the consignee or the latter's representative. A new release and/or de facto delivery may be made conditional on prior payment of the costs still outstanding" (article 4).
Thus the scheme of the ERS is that, once a code is issued, the forwarder is able, and as against the shipping company (including in this term here and elsewhere its agent) entitled, to use it to obtain the goods and the shipping company is entitled to withdraw it and prevent the forwarder obtaining the goods only in the circumstances specified in articles 3 and 4. However, the operator is to stop the code being used to release the goods if instructed by the shipping company to do so, whether or not the instruction involves a breach of its agreement with the forwarder. The forwarder is left to its contractual remedies against the shipping company.
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