JI MacWilliam Company Inc. v Mediterranean Shipping Company SA ('The Rafaela S')

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgePeter Gibson,Rix L JJ,Jacob J
Judgment Date16 Apr 2003

Court of Appeal (Civil Division).

Peter Gibson and Rix L JJ and Jacob J.

JI MacWilliam Co Inc
Mediterranean Shipping Co SA (The Rafaela S).

Alistair Schaff QC (instructed by Clyde & Co) for the appellant.

Simon Croall (instructed by Duval Vassiliades) for the respondent.

The following cases were referred to in the judgments:

Anders Maersk, TheUNK[1986] 1 Ll Rep 483.

Brij, TheUNK[2001] 1 Ll Rep 431.

Browner International Ltd v Monarch Shipping Co Ltd (The European Enterprise)UNK[1989] 2 Ll Rep 185.

Duke of Yare, The (ARR-RechtB Rotterdam, 10 April 1997).

Gardano & Giampieri v Greek Petroleum George Mamidakis & CoUNK[1961] 2 Ll Rep 259.

Henderson (CP) & Co v Comptoir d'Escompte de ParisELR(1873) LR 5 PC 253.

Hugh Mack & Co Ltd v Burns & Laird Lines LtdUNK(1944) 77 Ll L Rep 377.

International Air and Sea Cargo GmbH v Owners of the Chitral[2000] CLC 1,021.

Kum v Wah Tat Bank LtdUNK[1971] 1 Ll Rep 439.

McCarren & Co Ltd v Humber International Transport Ltd (The Vechscroon)UNK[1982] 1 Ll Rep 301.

Marlborough Hill v Alex Cowan and Sons LimitedELR[1921] 1 AC 444.

Maurice Desagnes, TheUNK[1977] 1 Ll Rep 290.

Motis Exports Ltd v Dampskibsselskabet AF 1912 A/S[1999] CLC 914; [2000] CLC 515 (CA).

MSC Magallanes, The (16 May 2002, Court of Appeal of Rennes).

Olivine Electronics Pte Ltd v Seabridge Transport Pte Ltd[1995] 3 SLR 143.

Parsons Corp v CV Scheepvaartonderneming The Happy Ranger[2003] 1 CLC 122.

Peer Voss v APL Co Pte LtdUNK[2002] 2 Ll Rep 707.

Portorafti (Cia) Commerciale SA v Ultramar Panama Inc (The Captain Gregos)UNK[1990] 1 Ll Rep 310.

Sanders Bros v Maclean & CoELR(1883) 11 QBD 327.

Sormovskiy 3068, The[1994] CLC 433.

Stafford Allen & Sons Ltd v Pacific Steam Navigation CoUNK[1956] 1 Ll Rep 104.

Stag Line Ltd v Foscolo, Mango & Co LtdELR[1932] AC 328.

Stettin, TheELR(1889) 14 PD 142.

Thrige v United Shipping Co LtdUNK(1924) 18 Ll L Rep 6.

Shipping Carriage of goods Bill of lading Cargo carried from Durban to Felixstowe and from Felixstowe to Boston and damaged en route Whether package limitation under Hague or Hague-Visby Rules or US Carriage of Goods by Sea Act 1936 applied Whether straight consigned bill of lading was bill of lading or similar document of title within Carriage of Goods by Sea Act 1971, s. 1(4) Whether carried governed by one contract or two Whether Felixstowe a port of shipment within s. 1(3) of 1971 Act.

This was an appeal from the judgment of Langley J ([2002] CLC 1043) concluding that a straight consigned bill of lading was not a bill of lading within the Hague or Hague-Visby Rules by virtue of s. 1(4) of the Carriage of Goods by Sea Act 1971 and that there were in this case two shipments under separate contracts of the cargo from Durban to Felixstowe and thence to Boston.

Coniston International Machinery Ltd of Liverpool (Coniston) consigned four containers of printing machinery to JI MacWilliam Company Inc of Boston USA (MacWilliam). MacWilliam had purchased the machinery from Coniston under a sale contract cif Boston. The machinery was carried on two vessels each of which was owned by or demise chartered to Mediterranean Shipping Co SA of Geneva (MSC). One vessel, The Rosemary, carried the machinery from Durban in South Africa to Felixstowe in England, where it was discharged and subsequently reshipped. The other vessel, The Rafaela S, carried the machinery from Felixstowe to its final destination at Boston. On the way, it was badly damaged. In a London arbitration between MacWilliam and MSC the issue was whether the package limitation under the Hague Rules, the Hague-Visby Rules, or the US Carriage of Goods by Sea Act 1936 (US COGSA) applied. A bill of lading issued by MSC to Coniston at Durban in 1989 was the only contract document in evidence relating to the carriage. The bill of lading was made out to MacWilliam as consignee without addition of the words or order and was on its face expressly made non-negotiable. If it governed the complete voyage to Boston, then its terms related directly to that second leg on which the machinery was damaged. If the position was that it only governed the first leg to Felixstowe, then no second bill of lading to cover the on-carriage to Boston was ever issued. It was common ground that, in such a case, the carriage on that second leg would be governed by a second contract in the same form as the Durban-Felixstowe bill of lading, mutatis mutandis, in other words by a straight bill of lading. If the straight consigned bill was not a bill of lading within s. 1(4) of the 1971 Act and there was only a single contract of carriage from Durban to Boston, so that Felixstowe was not a port of shipment within s. 1(3) of the 1971 Act, then US COGSA applied and imposed a package limitation regime more favourable to MSC. MSC succeeded on both questions in the arbitration and the claimant buyers appealed.

Langley J agreed that the straight bill of lading was not a bill of lading or similar document of title within s. 1(4) of the 1971 Act and dismissed the appeal. The straight bill was not negotiable or transferable in the accepted sense and as the arbitrators held the requirement for delivery to be made only against the bill was not applicable when the bill was used as a straight consigned bill. On the second issue, Langley J would if necessary have held that there were two shipments under separate contracts. MacWilliam appealed. By a respondent's notice MSC sought to uphold Langley J's order dismissing the appeal from the award on the alternative ground that the arbitrators were also right on the one contract or two issue.

Held, allowing the appeal:

1. MSC's bill of lading specifically identified Felixstowe as the port of discharge. Boston was also identified as the ultimate destination and the bill stated that it was a through bill of lading, but the bill's own language set out the limits of MSC's obligations as a carrier under the bill. The carrier agreed to carry the goods from the port of loading to the port of discharge, i.e. Felixstowe, and, acting as the shipper's agent, to arrange for transport of the cargo from the port of discharge to destination. Therefore although MSC was contracted to arrange on-carriage to Boston, it was not contracted to carry the machinery to Boston until it entered into a new arrangement at some stage to on-carry the goods from Felixstowe. That was a separate contract of carriage, which entitled the shipper to demand a bill of lading and therefore, subject to the straight bill of lading issue, meant that the contract was covered by a bill of lading for the purposes of art. I of the Hague or Hague-Visby Rules. (Parsons Corp v CV ScheepvaartondernemingThe Happy Ranger[2003] 1 CLC 122 applied.)

2. It was not necessary to decide whether Felixstowe would be a port of shipment within the meaning of s. 1(3) of the 1971 Act on the hypothesis of a single contract of carriage

3. It was established law that at any rate in the case of a classic (negotiable, meaning repeatedly transferable) bill of lading the obligation of the ship was to deliver only against its surrender. There was no reason to conclude that the Rafaela S form of bill of lading, when used as a straight bill, which was transferable once, did not require to be surrendered in return for delivery of the goods, by contrast with a sea waybill. The form of the Rafaela S bill of lading was quite different from that of a sea waybill. If a straight bill expressly provided, as it commonly did, that its surrender was required for delivery to take place, then it was a document of title. A straight bill of lading, for all that it was non-negotiable, should be viewed as a bill of lading within the meaning of the Rules. If negotiability was not a necessary requirement of a bill of lading within the meaning of the Rules, then plainly the straight bill was similar to a document of title.

4. The attestation clause in the bill of lading was to be construed as applicable to the use of the bill in its negotiable form and as a straight bill.

5. It was unnecessary to decide whether a straight bill of lading was in principle a document of title, even in the absence of an express provision requiring its production to obtain delivery.

6. The bill of lading in this case was a bill of lading or similar document of title to which the Hague-Visby Rules applied.


Rix LJ:

1. In 1924 the international maritime community enacted a convention, the International Convention for the unification of certain rules of law relating to Bills of Lading signed at Brussels on 25 August 1924, intended to regulate the minimum terms by which international shipping contracts of carriage of goods by sea should be governed. That convention, although signed at Brussels, derived, with amendments, from a set of standard rules originally designed for incorporation into bills of lading as a matter of contract which were negotiated at The Hague in 1922. Thus the rules came to be known as the Hague Rules. By article I(b) those Rules applied only to contracts of carriage covered by a bill of lading or any similar document of title. It is a matter of some surprise that nearly eighty years later the meaning of that phrase is still controversial. Indeed new forms of shipping documents appear to have caused in recent years an increasing number of cases to reach the courts raising the question whether a bill of lading consigned to a named consignee, a so-called straight bill of lading, is a bill of lading within the meaning of the Rules. A straight bill of lading is to be contrasted with an order or bearer bill of lading, each of which permits the transferability of the bill to any number of transferees in succession, respectively by endorsement or delivery. This form of transferability has also traditionally, but idiosyncratically, been referred to as negotiability. Scrutton on Charterparties and Bills of Lading, 20th ed, 1996, at 185, explains the point well:

Note 1. Negotiable as a term of art...

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