J I MacWilliam Company Inc. v Mediterranean Shipping Company SA ('The Rafaela S') [QBD (Comm)]

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeThe Honourable Mr Justice Langley,Mr Justice Langley
Judgment Date17 Apr 2002
Neutral Citation[2002] EWHC 593 (Comm)
Docket NumberCase No: 2001 Folio 678

[2002] EWHC 593 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Before

The Honourable Mr Justice Langley

Case No: 2001 Folio 678

Between
J I Macwilliam Co Inc
Claimants (Appellants)
and
Mediterranean Shipping Co SA
'The Rafaela S'
Respondents

Mr A. Schaff QC (instructed by Clyde & Co) for the Appellants

Mr S. Croall (instructed by Duval Vassiliades) for the Respondents

Hearing date: 25th March 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.

The Honourable Mr Justice Langley Mr Justice Langley

Mr Justice Langley

THE APPEAL

1

The Claimant buyers appeal, with the leave of Morison J, against an Interim Final Arbitration Award dated 30 May 2001 made by Michael Mabbs, Mark Hamsher and Christopher J W Moss. The Respondents ("MSC") were the demise charterers of the vessels "Rosemary" and "Rafaela S". The goods suffered damage when on board the Rafaela S.

2

Leave was granted under Section 1 of the Arbitration Act 1979 as the reference was conducted before the 1996 Arbitration Act came into force.

THE AWARD

3

The subject of the Award was a preliminary issue, conducted on the assumed basis that MSC were liable in contract and tort for the damage to the goods, to determine whether the relevant shipment was one in respect of which MSC was entitled to limit its liability under the U.S. Carriage of Goods by Sea Act 1936 ("USCOGSA") or only in accordance with the more generous regime of the Hague or Hague-Visby Rules enacted by the Carriage of Goods by Sea Act 1971 ("COGSA 1971").

4

That issue required the determination of two questions:

i) Whether, as the buyers contended, the "straight consigned" Bill of Lading dated 18 December 1989 issued by MSC was a Bill of Lading within the meaning of Section 1(4) of COGSA 1971 ("Issue 1"); and

ii) Whether, as the buyers also contended, the "port of shipment" for the carriage of the goods pursuant to that "Bill of Lading" was a port in the United Kingdom (namely Felixstowe) within Section 1(3) of COGSA 1971 ("Issue 2"). Issue 2 itself depended upon whether there was a single contract of shipment from Durban to Boston or two contracts of carriage from Durban to Felixstowe and Felixstowe to Boston. Neither South Africa or the USA are parties to the Brussels Convention and the Hague Rules scheduled to COGSA 1971.

5

It is not in dispute that if the answer to either of these questions is in the negative then USCOGSA applied. That was because even if there were two contracts of carriage it was accepted by the buyers that each would have been on the terms of the straight consigned Bill of Lading: see Pyrene Co v Scindia Navigation Co [1954] 2 QB 402 at 419–20; Stafford-Allen v Pacific Steam Navigation Co [1956] 1 Lloyd's Rep 104.

6

MSC succeeded on both questions in the Arbitration.

"THE BILL OF LADING"

7

The goods were 4 containers of printing machinery. They were shipped on board the Rosemary at Durban. The "Bill of Lading" was issued at Durban. The Buyers were named as the consignees.

8

The relevant sections on the face of the Bill of Lading were completed as follows:

Box (2) Consignee: (B/L not negotiable unless "ORDER OF")

J.I. MacWilliam Company Inc.,

Box 6, New Town Branch,

Boston, Mass. 02258, USA

(6) Vessel

ROSEMARY

(7) Port of Loading

DURBAN

(8) Port of Discharge

FELIXSTOWE

(9) Final Destination (through transport)

BOSTON

Freight Payable at

DESTINATION

9

The printed language on the front of the Bill of Lading included:

i) If box 5 and/or 9 filled out this is a through Bill of Lading (see clause 3).

ii) Received in apparent good order and condition ……

In WITNESS whereof the number of Original Bills of Lading stated above (3) all of this tenor and date, has been signed, one of which being accomplished, the others to stand void. One of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order.

10

On the reverse of the Bill of Lading, the relevant printed terms of the contract of carriage provided as follows:

"Clause 1:

1 PARAMOUNT CLAUSE ….. this Bill of Lading shall have effect subject to the ….. Hague Rules …….. the Hague Rules shall not apply where ……. this bill of lading is subject to any compulsory applicable enactment, including Hague-Visby Rules … If goods are shipped to or from the United States, this bill of lading shall be subject to US Carriage of Goods by Sea Act 1936.

Clause 3:

3. SUBSTITUION OF VESSEL, THROUGH TRANSPORT, TRANSSHIPMENT AND FORWARDING.

The carrier agrees to carry the goods from the Port of Loading to the Port of Discharge, and shall have the right at its sole discretion to substitute other vessels, feederships, lighters or other modes of transport for the vessel named herein … If boxes 5 and/or 9 are filled out, the carrier will, acting as the shipper's agent, only arrange for transport of the cargo by other carriers from the place of origin to Port of Loading and/or from Port of Discharge to destination … It is expressly understood that the Carrier's liability as "carrier" applies only from the Port of Loading to Port of Discharge under this B/L and only while the goods remain in its actual custody and control…….

Clause 21:

21 CLAIMS VALUATION, PACKAGE LIMITATION, TIME-BAR. … In case goods are shipped to or from the United States, the carrier's liability shall be limited to $500 per package or customary freight unit, unless excess value is inserted on the face hereof and extra charge is paid….."

THE CARRIAGE

11

The cargo was carried from Durban to Felixstowe on the Rosemary. On arrival at Felixstowe the cargo was unloaded and shipped aboard another of MSC's vessels, the Rafaela S, bound for Boston. A fresh bill of lading was not issued in respect of the Felixstowe-Boston leg of the journey.

12

The Buyers allege that the cargo was damaged beyond economic repair, during the Felixstowe-Boston voyage.

THE SUBMISSIONS

13

The Buyers contended that the Hague-Visby Rules applied compulsorily to the Felixstowe-Boston leg of the journey on the basis that:

i) The contract of carriage contained in or evidenced by the Bill of Lading terminated at Felixstowe.

ii) A fresh bill of lading ought to have been issued in respect of the Felixstowe-Boston leg of the voyage.

iii) The bill of lading would have been issued in the UK.

iv) Accordingly, the Port of shipment was Felixstowe and not Durban and pursuant to Section 1(3) of COGSA 1971 the Rules compulsorily applied to the carriage.

14

MSC submitted that the Hague-Visby Rules did not apply because:

i) A straight consigned bill of lading is not a bill of lading within Section 1(4) of COGSA 1971. The Rules were not, therefore, compulsorily applicable to the Bill of Lading nor would they have been applicable to a fresh bill of lading had one been issued in relation to the Felixstowe-Boston leg.

ii) The whole voyage from Durban to Boston was governed by one contract of carriage, namely that contained in or evidenced by the Bill of Lading. Accordingly, the port of shipment was Durban and not Felixstowe.

THE REASONS FOR THE AWARD

15

The Arbitrators decided on Issue 1 that:

i) The Bill of Lading was non negotiable;

ii) It was not therefore a document of title in the accepted sense;

iii) The form of the Bill of Lading used was designed for various circumstances including when the Bill was to be negotiable and when it was to be non negotiable. The form of the Bill therefore had to be construed in the light of the particular circumstances of each case and in some circumstances parts of the form would have to be read as if the words "if applicable" had been inserted;

iv) The requirement that delivery be made against the Bill and only against the Bill in the printed language on the front of the Bill was intended for use when the Bill was negotiable and was not applicable when the Bill was non negotiable as in such a case the carrier was plainly obliged to the named consignee and only that person if he was to comply with the contract;

v) The Bill in this case was straight consigned and hence was not a Bill of...

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