Intraco Ltd v Notis Shipping Corporation (Bhoja Trader)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DONALDSON |
| Judgment Date | 19 June 1981 |
| Judgment citation (vLex) | [1981] EWCA Civ J0619-2 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 81/0257 |
| Date | 19 June 1981 |
[1981] EWCA Civ J0619-2
Lord Justice Donaldson
Lord Justice Ackner
81/0257
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (INTERLOCUTORY LIST)
Royal Courts of Justice,
MR R. AIKENS (instructed by Messrs. Ince & Co.,) appeared on behalf of the Appellants.
MR D. DONALDSON (instructed by Messrs. Holman, Fenwick & Willan) appeared on behalf of the Respondents.
The judgment which I am about to give is that of the Court.
The dispute between the parties concerns the sale of a ship, the M.V. "Notis", now re-named the "Bhoja Trader". The Sellers were Notis Shipping Corporation of Liberia, a one-ship company managed from Greece. The Buyers were Intraco Limited, a Cayman Island company managed from Ceylon. The agreement for sale was made at the beginning of April and was based upon the Norwegian Sale Form of Contract. Delivery took place on 16th April at Calcutta.
This form of contract includes in clause 9, lines 82–89, a guarantee that the vessel at the time of delivery is free from all encumbrances and maritime liens or other debts whatsoever. It goes on to provide an indemnity in respect of the consequences of any such claim incurred prior to the time of delivery.
Clause 15 is an arbitration clause which the parties amended to provide for English law to apply and for London Arbitration.
The agreed price was US $810,000. US $41,000 had been paid as a deposit, US $369,000 was payable in cash on delivery and the balance of US $400,000 was payable with in 90 days of delivery by means of a bank guarantee to be given by the London branch of Banquede l'Indochine et de Suez ("the bank").
Shortly after delivery, the vessel was arrested in Calcutta, and the purchasers had to provide security amounting to US $200,000 to obtain her release. The validity of the arrest was challenged in the Indian Courts, which have held that it was not justified, save to the extent of the relatively small amount of US $4,500. However, the decision of the Appeal Court to this effect is under appeal to the Supreme Court, and no decision has yet been given. The provision of the security took a little time, and the purchasers claim that this led to their suffering large losses due to the cancellation of cargo bookings for the vessel. Arbitration proceedings have been or are about to be begun in London by the purchasers against the sellers alleging breach of the sale contract and claiming damages.
The Sellers have no assets in this country other than their righ to under the bank guarantee. Accordingly, the purchasers applied ex parte to Mr Justice Robert Goff for an injunction restraining the Sellers from calling upon the bank to make payment. This injunction was granted in order to hold the position until it could be considered inter partes.
The inter partes proceedings were heard by Mr Justice Staughton, and it is against his decision that the purchasers appeal and the Sellers cross-appeal.
Mr Justice Staughton refused to continue the injunction restraining the Sellers from calling upon the bank to make payment under the guarantee, but granted a Mareva injunction restraining the Sellers "Until further order from removing from the jurisdiction or otherwise disposing of any of their assets and in particular moneys payable under a guarantee given by the Banque de 1' Indochine et de Suez dated 14th April 1981 in favour of the Defendants, save insofar as the same exceed the sum of US $50,000".
In refusing to interfere with the Sellers' right to call upon the...
To continue reading
Request your trial
-
Bocotra Construction Pte Ltd and Others v Attorney General
... ... the facts were not clear, that no shipping instructions were ever received by Polimex ... In Intraco Ltd v Notis Shipping Corporation , the sellers ... beginning of April 1981, sold their vessel `Bhoja Trader` to the buyers. The contract was in the ... ...
- Malaysia Overseas Investment Corporation Sdn Bhd v Sri Segambut Supermarket Sdn Bhd
-
Group Josi RE (formerly Groupe Josi Réassurance S.A.) v Walbrook Insurance Company Ltd
... ... That is United Trading Corporation v. Allied Arab Bank Ltd (1985) 2 Q.R. 554 ... 251 at p. 256 , of Donaldson LJ in Intraco Ltd v. Notis Shipping Corporation (1981) 2 ... ...
-
Z Ltd v A-Z and AA-LL
...He must hold it pending further order. 34The injunction does not prevent payment under a letter of credit or under a bank guarantee, see Intraco v. Notis (1981) 2 Lloyd's Law Reports 256; Power Curber International Ltd. v. National Bank of Kuwait (1981) 1 Weekly Law Reports 1233: but it m......
-
Demand Bonds - A Pound Of Flesh
...Fabrics CC supra at 817 G Loom Craft Fabrics CC supra at 815 G - J. Intraco Limited v Notis Shipping Corporation (Bhoja Trader) [1981] 2 Lloyds Rep 256 Tins Industrial Co. Limited v Kono Insurance Limited (1987) 42 BLR 110. The Merchant of Venice, Act 1 - Scene 3. R D Harbottle (Mercantile)......
-
On-Demand Bonds: Is Substantial Compliance Enough?
...(A). The Appeal Court quoted the following from the English decision of Intraco Ltd v Notis Shipping Corporation (The Bhoja Trader) [1981] 2 Lloyd's Rep 256 (CA): Irrevocable letters of credit and bank on-demand bonds given in the circumstances such as that they are the equivalent of an irr......
-
RESTRAINING A CALL ON A PERFORMANCE BOND: SHOULD ‘FRAUD OR UNCONSCIONABILITY’ BE THE NEW ORTHODOXY?
...v Chase Manhattan Bank NA (Practice Note)[1984] 1 Lloyd’s Rep 251, 254, of Donaldson LJ in Intraco Ltd v Notis Shipping Corporation[1981] 2 Lloyd’s Rep 256, of Lloyd LJ in the Dong Jin Metal case, 13 July 1993, and of both Clarke and Phillips JJ in the present case. [emphasis mine] Furtherm......
-
AN ANALYSIS OF RECENT JUDICIAL DEVELOPMENTS IN SELECTED AREAS OF CIVIL PROCEDURE
...2 SLR 733, at pp 744—745. 118 [1984] 1 Lloyd’s Rep 251, at p 257. 119 [1993] 1 SLR 65. 120 Ibid, at p 70. In The ‘Bhoja Trader’[1981] 2 Lloyd’s Rep 256, Donaldson LJ said: ‘Thrombosis will occur if, unless fraud is involved, the courts intervene and thereby disturb the mercantile practice o......
-
The Mareva journey - from the atlantic to the Caribbean
...1 All . E.R.456. 20 [1989] 1 All E.R. 1002. 21 Ibid., at 1018. 22 [1986] 3 All E.R. 487, at 495-496. 23 [1986] 2 All E.R. 970. 24 [1981] 2 Lloyd's Rep. 256. 25 (1975) C.A. Transcript 411. (b) whether the grant of such an injunction can be reconciled with the basic precepts enunciated by Lor......
-
The Documentary Nature of Demand Guarantees and the Doctrine of Strict Compliance (Part 1)
...of payment undertaking.3See also O’Brien op cit note 2 at 159.4See Intraco Ltd v Notis Shipping Corporation (The ‘Bhoja Trader’) [1981] 2 Lloyd’s Rep 256 (CA)at 257.5See SITPRO’s Financial Guide: Demand Guarantees (2007) at 2 (available at http://www.sitpro.org.uk,visited on 3 May 2009). (S......