Ismail v Polish Ocean Lines (Ciechocinek)

JurisdictionEngland & Wales
JudgeTHE MASTER OF THE ROLLS,LORD JUSTICE ORMROD,LORD JUSTICE SHAW
Judgment Date04 February 1976
Judgment citation (vLex)[1976] EWCA Civ J0204-1
Date04 February 1976
CourtCourt of Appeal (Civil Division)
Fawzia Ismail
Respondent
and
Polish Ocean Lines
Respondents(Appellants)

[1976] EWCA Civ J0204-1

Before:

The Master of the Rolls

Lord Justice Ormrod

Lord Justice Shaw

In The Supreme Court of Judicature

Court of Appeal (Civil Division)

MR. C. STAUGHTON, Q.C. and MR. A. COLMAN (instructed by Messrs. Holman, Fenwick and Willen) appeared on behalf of the Respondents (Appellants).

MR. A. LLOYD, Q.C. and Mr. J. MANCE (instructed by Messrs. Ince and Co.) appeared on behalf of the Claimant (Respondent).

THE MASTER OF THE ROLLS
1

The people of Egypt grow new potatoes in the Nile Valley and ship them to England. In April 1970 Dr. Ismail shipped a cargo Alexandria on the vessel "Ciechocinek". She was owned by the Polish Ocean Lines, a State Corporation. He had chartered her for a voyage to England. She was a brand-new ship, built at Constanza in Rumania, and this was to be her first commercial voyage. She could carry cargo up to 1,400 tons in weight, if there was space in the holds for it. But potatoes were a bulky cargo needing good ventilation. So on her way from Constanza to Alexandria the Chief Officer made a plan to see what quantity of potatoes she could carry. He calculated that the vessel could only carry 1,000 tons of potatoes properly ventilated. To do this they would require 20 cubic metres of 'dunnage', that is, lengths of wood placed in position so as to make space between the bags. But they only had 7 cubic metres of dunnage aboard. So they would need another 13 cubic metres to be supplied at Alexandria.

2

When they got to Alexandria, there were lorries full of potatoes waiting on the quay ready for them to be loaded on to the vessel. Dr. Ismail was not himself there. But he had his brother, Mr. Ismail, there and he had authorised Mr. Ismail to give instructions on his behalf as regards the loading. Now, Mr. Ismail was not willing to restrict the cargo to 1,000 tons, as the Master and Chief Officer wished. Dr. Ismail was paying a lump-sum freight of £9,250 for the voyage, irrespective of the quantity. No matter whether it was 1,400 tons or 1,000 tons, Dr. Ismail would still have to pay only £9,250. At any rate, Mr. Ismail insisted on the vessel leading 1,400 tons. He said that the 1,400 tons must be loaded at once, and as quickly as possible. He said that no dunnage was available at Alexandria: and that the potatoes were packed in a new kind of bags which made dunnage unnecessary. The Master demurred. He was dubious about it. Mr. Ismail said that he would get a surveyor's certificate to 3ay that dunnage was unnecessary and that he would give the Master a guarantee in writing against the consequences of stowing the cargo in this way. In addition, Mr. Ismail appeared to have an expert knowledge of potato shipments – far more than the Master or the Chief Officer. So the Master feltthat he must accept Mr. Ismail's ward. He agreed to the 1,400 tons being loaded, and they were loaded.

3

The Master made several requests for the promised certificate and guarantee. But they were not forthcoming. The master delayed sailing for a short time in the hope that they would come, hut they did not come. In the end he decided that he could wait no longer. He set sail from Alexandria on 14th April, 1970, and arrived at Boston in Lincolnshire on 27th April, 1970. Oil discharging the cargo, a large number of the bagged potatoes were found to be rotten. Dr. Ismail claimed damages. The total of rotten potatoes was £63;000. And the total freight was only £9,250. Even under the Merchant Shipping Acts, the liability of the ship would be limited to £40,000. But Dr. Ismail wanted £63,000.

4

The matter was referred to arbitration in London. It was heard for ten days. There was much dispute as to the cause of the damage. The arbitrators found that two-thirds was due to improper stowage (because there was no dunnage, etc.); and one-third due to inherent vice (because the potatoes were too hot when shipped and the bags were not suitable, etc.). The arbitrators held that the ship was liable for the improper stowage and awarded Dr. Ismail two-thirds of the damage. But they stated a Special Case. The Judge affirmed the award. The shipowners appeal to this Court.

5

THE MATERIAL CLAUSES OF THE CHARTERPARTY

6

The obligation to load and stow the cargo was put on the charterers – not on the owners – by these printed clauses:-

7

"18(c): Free in and stowed. The Charterers shall load and stow the cargo free of any expense whatsoever to the Owners" "19: The Charterers shall provide and pay for all dunnage material as required by the Master for the proper stowage and protection of the cargo, the Owners allowing the use of all dunnage available on board. The dunnage shall be laid under Master's supervision."

8

There was this typewritten clause 49 which is of special importance:-"49: Dunnaging and stowage instructions given by the Charterers to be carefully followed, but to be executed under the supervision pf the Master and he is to remain responsible for proper stowage and dunnaging."

9

There were these incorporated clauses of the Hague Rules "Article III: Subject to the provisions of Article IV the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried."

10

(In one or two places, the Judge seemed to think that Article III applied hero. But I do not think it did. Article III does not mean that the shipowner is to do all the loading, stowing, etc. himself. It only means that, in respect of any loading or stowing which he is obliged under the contract to do, he must do it properly and carefully, see Pyrene Co. v. Scindia Navigation Co. (1957) 2 Q.B. 417 by Devlin J.,(approved in 1958 A.C. at pp. 619, 620, 624). In the present case the shipowners were under no obligation to do any of the loading or stowing. Sc Article III did not apply.)

11

"Article IV 2: Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from:-

12

(i) Act or omission of the shipper or owner of the goods, his agent or representative."

13

THE QUESTIONS FOR THE COURT

14

A serious question arises on the Award because of the way in which the questions for the Court are stated. This was not the fault of the arbitrators, but of the procedure that was adopted, and often is adopted, in these cases. The arbitrators heard for ten days much evidence on many disputed questions of fact. Counsel had to make their submissions briefly because it was the end of term. But they made them plainly enough, as indeed it was their duty to do – see The White Rose (1954) 1 W.L.R. at p. 1103 by Donaldson J. In particular the Shipowners contended that they were exempt from liability by reason of clause 49, or alternatively, by reason of an estoppel, see paragraph 14.3 of the Award. And the arbitrators found every single fact necessary to the decision of those contentions. But the questions which were afterwardsdrafted did not reflect the contentions so simply. Some were drafted by Counsel on one side. The others by Counsel on the other. They were sent to the arbitrators who took them as they stood and set them out in their Award. As it turned out, these questions were too complex and gave rise to much discussion before the Judge. And he was faced with cases which appear to say that on the hearing of a Special Case a Judge is not entitled to alter the question of law stated for the decision of the Court – see Minister of Food v. Reardon Smith Line (1951) 2 T.L.R. 1158 by McNair J.; Ceylon (Government of) v. Chandris (1965) 2 Lloyds Rep. 204; Iles aux Moines (1974) 1 Lloyd at p. 265 by Mocatta J.; with the result that, if the question is not correctly stated, the only course is to remit the matters referred to, or some of them, to the arbitrators under Section 22(1) of the Arbitration Act, 1950.

15

Now, I must say that I do not think the parties should be tied hand and foot to the precise way in which those questions are formulated for decision – especially when they are formulated by the parties in advance of the findings of fact. If the findings of fact, when made, give rise to a question of law which ought to be decided in order to do justice between the parties, then that question is a 'question of law arising in the course of the reference'. And I see no reason why the Court should not itself amend the question or formulate it afresh – at the request of one or both of the parties – so that the real issues between them can be decided: provided, of course, that the facts are sufficiently found for the purpose. It would be a work of supererogation to send it back to the arbitrators for them to re-formulate the question when that would be an automatic exercise – merely endorsing the formula submitted by the parties.

16

The Judge said here that "… the present case, like others in the past, is one in which time has been spent in argument, and some difficulty has arisen as to whether or not a crucial and obvious question of law is open on the questions as framed". In the end he held that all the questions "could have been covered by one question in an agreed general form, e.g., whether on the facts found and the true construction of the charterparty (together with theincorporated Hague Rule provisions) the Owners arc under any liability to the. Charterer". I trust that in future, time will be saved and difficulties avoided, by a simple amendment of the questions – at any rate in those cases where the facts are fully and sufficiently found so as to raise the question of law which the party desires to be stated.

17

In the present case I would, therefore, if need be re-formulate the questions for the Court so as to ask specifically whether clause affords any defence to the Shipowners; or, alternatively, whether the claimant is estopped from claims for improper stowage. But I do not think it is necessary I agree with the Judge who held...

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