JI MacWilliam Company Inc. v Mediterranean Shipping Company Sa (the Rafaela S)
| Jurisdiction | UK Non-devolved |
| Judge | LORD STEYN,LORD BROWN OF EATON-UNDER-HEYWOOD,LORD BINGHAM OF CORNHILL,LORD RODGER OF EARLSFERRY,LORD NICHOLLS OF BIRKENHEAD |
| Judgment Date | 16 February 2005 |
| Neutral Citation | [2005] UKHL 11 |
| Court | House of Lords |
| Date | 16 February 2005 |
[2005] UKHL 11
The Appellate Committee comprised:
Lord Bingham of Cornhill
Lord Nicholls of Birkenhead
Lord Steyn
Lord Rodger of Earlsferry
Lord Brown of Eaton-under-Heywood
HOUSE OF LORDS
My Lords,
In about January 1990 four containers of printing machinery were damaged in the course of their carriage by sea from Felixstowe to Boston, USA. The carrier was Mediterranean Shipping Company SA, the appellant, which I shall call "the carrier". The buyer was J I MacWilliam Company Inc of Boston ("the buyer"). The issue in this appeal is whether the contract for the carriage of those goods was covered by "a bill of lading or any similar document of title" within the meaning of section 1(4) of the Carriage of Goods by Sea Act 1971 and article I (b) of the Hague-Visby Rules, which were given the force of law in the United Kingdom by section 1(2) of that Act. If it was so covered, the buyer's claim is governed by the financial limits prescribed in article IV rule 5 of the Hague-Visby Rules. If it was not, the claim is governed by the limits laid down in section 4(5) of the United States Carriage of Goods by Sea Act 1936. The Hague-Visby Rules are significantly more generous to the claimant than those under US COGSA. Unsurprisingly, therefore, the buyer contends that the Hague-Visby regime applied and the carrier contends that US COGSA was applicable. The question of legal principle which divides the parties is whether a straight bill of lading, by which I mean a bill of lading providing for delivery of goods to a named consignee and not to order or assigns or bearer, and so not transferable by endorsement, is "a bill of lading or any similar document of title" within the provisions already mentioned. I shall hereafter use the expression "order bill" to embrace a bill to order or assigns or bearer without distinguishing between these.
For purposes of a preliminary issue referred to London maritime arbitrators, a number of matters were assumed or agreed, and some issues considered below are no longer live. It has been assumed that the buyer has title to sue and that the carrier is liable for any damage to the goods. As it was, no document was issued to record or evidence the contract for the carriage of these goods from Felixstowe to Boston. But this was the continuation of carriage which began in Durban, and the contract for the carriage from Durban to Felixstowe was covered by a straight bill of lading issued at Durban dated 18 December 1989. The good were trans-shipped and loaded on a different vessel at Felixstowe. It is agreed that the shipper (and seller) of the goods, Coniston International Machinery Limited of Liverpool, could have required the issue of a document to record or evidence the contract for the onward carriage of the goods from Felixstowe to Boston; that any document so issued would, for all purposes relevant to this appeal, have been in the same form as that issued for the first leg of the carriage; and that nothing turns on the lack of a document. It is convenient to speak as if a document had been issued in the form the document would have taken had it been issued. It is no longer necessary to review two questions (whether there was one contract of carriage or two, and whether Felixstowe was a port of shipment in the UK) which exercised the arbitrators and the lower courts.
The very experienced arbitrators (Messrs Mabbs, Hamsher and Moss) concluded, for very clear reasons which they gave, that a straight bill of lading did not fall within section 1(4) of the 1971 Act and article I (b) of the Rules. Their opinion on this point was shared by the commercial judge (Langley J): [2002] EWHC 593 (Comm), [2002] 2 Lloyd's Rep 403, paras 17-27. But the Court of Appeal (Peter Gibson and Rix LJJ and Jacob J) reached a different conclusion on this issue, for reasons given in a comprehensive and erudite judgment of Rix LJ and for additional reasons given by Jacob J: [2003] EWCA Civ 556, [2004] QB 702, [2003] 2 Lloyd's Rep 113. I must acknowledge that the arguments advanced in the carrier's written case and by Mr Simon Rainey QC in his very able oral submission, fortified by the reasons of the arbitrators and the judge and buttressed by weighty academic authority, have caused my mind, more than once, to waver. But I have on reflection concluded that the Court of Appeal reached the correct conclusion, for the reasons which they gave. That enables me, since the arguments advanced to the House were essentially those summarised by Rix LJ in paras 31-33 of his judgment, to express my own conclusions relatively briefly.
It is unnecessary to repeat the very detailed description given by Rix LJ in paras 11-17 of his judgment of the bill of lading with which this appeal is concerned. A visual representation of the front of the bill, differing of course in its typewritten entries but subject only to minor and (for present purposes) immaterial differences in its appearance and printed text, was annexed by the Federal Court of Australia to its judgments in El Greco (Australia) Pty Limited v Mediterranean Shipping Co SA [2004] FCAFC 202, [2004] 2 Lloyd's Rep 537, 593. Perusal of the form issued by the carrier in the present case prompts a number of observations:
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(1) It is prominently entitled "Original BILL OF LADING" and has an assigned bill of lading number.
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(2) In box (2) are the printed words "Consignee: (B/L not negotiable unless 'ORDER OF')". In this box the buyer's name and address were inserted. The words "order of" or their equivalent were not added. It was this omission which made this a straight bill.
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(3) In box (11) the number of original bills of lading was specified as three. This followed what Bowen LJ in Sanders Brothers v Maclean & Co (1883) 11 QBD 327, 341, described as the "inveterate practice among most of the commercial nations of Europe" of shipowners drawing bills of lading in sets of three or more.
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(4) The form contained all the particulars of the goods and the carriage ordinarily found in a bill of lading.
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(5) The form provided, on its face, that
"IN ACCEPTING this Bill of Lading, the Merchant agrees to be bound by all the terms and exceptions and limitations whether printed, stamped or written hereon and on the reverse side ….."
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(6) The form also provided, on its face, that
IN WITNESS whereof the number of Original Bills of Lading stated above 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."
The first of these two sentences followed what Lord Phillimore in The Ship "Marlborough Hill" v Alex Cowan and Sons Limited [1921] 1 AC 444, 453, in the context of an order bill, called "the time honoured form".
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(7) The conditions on the reverse of the form were prefaced by a clause which began:
"This contract is between the Merchant and the Master, acting on behalf of the Carrier. Wherever the term 'Merchant' occurs in this Bill of Lading, (hereinafter 'B/L') it shall be deemed to include the Shipper, the Consignee, the holder of the B/L, the receiver and the owner of the goods."
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(8) The conditions included a clause paramount, quoted by Rix LJ in para 17 of his judgment, subjecting the contract to the Hague-Visby Rules where they were compulsorily applicable.
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(9) The conditions made repeated references to "this B/L".
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(10) The conditions were of the kind routinely found in a bill of lading.
It is always the task of the court to determine the true nature and effect of a legal document, and in performing that task the court is not bound by the label which the parties have chosen to apply to it. Where, however, the court is considering a bona fide mercantile document, issued in the ordinary course of trade, it will ordinarily be slow to reject the description which the document bears, particularly where the document has been issued by the party seeking to reject the description. This document called itself a bill of lading. It was not a bill transferable by endorsement, and so was not "negotiable" in the somewhat inaccurate sense in which that term is used in this context: Kum and Another v Wah Tat Bank Limited [1971] 1 Lloyd's Rep 439, 446. But if this document was a mere receipt or sea waybill there was no purpose in following the traditional practice of issuing more than one original, and the time honoured language used in the attestation clause (see para 4 (6) above) was entirely meaningless. The contract conditions clearly envisage that the consignee and bill of lading holder may become a party to the contract of carriage, and the conveyance of contractual rights by transfer of the bill of lading has been a, if not the, distinctive feature of a bill of lading, at any rate since the Bills of Lading Act 1855. The conditions of this contract make no sense if the consignee, although holding the bill of lading, remains a stranger to the contract of carriage. They are unlike the standard terms of non-negotiable sea waybills of which examples are given in Gaskell, Bills of Lading: Law and Contracts (LLP, 2000), pp 727-733.
The carrier responds to this argument by pointing out that the form may be used in the case of either an order bill or a straight bill, and that if it is used for the latter purpose some of the stated conditions (such as the attestation clause quoted in para 4 (6) above) are inapposite. The first of these points is plainly correct: if "order of" or words to that effect are added in box (2) the bill becomes an order bill, and if they are not it is a straight bill. It is also true that it is necessary in some...
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