Jindal Iron and Steel Company Ltd and Others v Islamic Solidarity Shipping Company Jordon Inc.
| Jurisdiction | England & Wales |
| Judge | Lord Justice Tuckey,Lord Justice Waller,Mrs. Justice Black |
| Judgment Date | 13 February 2003 |
| Neutral Citation | [2003] EWCA Civ 144 |
| Docket Number | Case No: A3/2002/1437(A) |
| Date | 13 February 2003 |
| Court | Court of Appeal (Civil Division) |
[2003] EWCA Civ 144
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR. NIGEL TEARE Q.C.
SITTING AS A DEPUTY HIGH COURT JUDGE
Lord Justice Waller
Lord Justice Tuckey and
Mrs. Justice Black
Case No: A3/2002/1437(A)
A3/2002/1437
Simon Rainey Q.C. and Nicholas Craig (instructed by Jackson Parton) for the Appellants
Timothy Young Q.C. and Sudanshu Swaroop (instructed by More Fisher Brown) for the Respondents
Introduction.
Steel coils carried by the defendants under a voyage charter party with the second claimant and bills of lading issued to or held by the first and third claimants' were allegedly damaged by defective loading, stowage or discharge. At a trial of preliminary issues Mr Nigel Teare Q.C. sitting as a Deputy High Court Judge decided that the defendants had no liability under the charter party. There was no liability under the bills either so long as the alleged damage was not caused by acts or omissions of the defendants, their servants or agents.
The claimants' appeal raises questions of construction and a point of principle about the meaning and effect of Article III r.2 of the Hague Visby Rules on the bills. This rule says:
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.
Following an observation by Devlin J. in Pyrene v Scindia Navigation Co. (1954) 2 QB 402 it has been settled English law that this rule does not oblige the carrier to load, stow and discharge. However, if he has agreed to do so, he must perform these obligations properly and carefully. The claimants say this is wrong: the rule does impose an obligation on the carrier and any provision in the bills to the contrary is made null and void by Article III r.8.
By their respondents' notice the defendants challenge the judge's qualification of their liability under the bills.
The Charter Party
The cargo was to be carried in the defendants' vessel Jordan II from Bombay to Barcelona and Motril. The cargo was described as:
5,500 metric tonnes, 5 per cent more or less in charterers' option. Galvanised steel coils (maximum piece weight 12 tonnes) … cargo under this charter party to be separated by vessels holds. In case same is not possible, any artificial separation, if necessary, to be arranged by owners at their time, risk and expense….
The charter is dated 4 th December 1997 and is on a Stemmor 1983 form which was designed for the carriage of ore cargoes. The relevant clauses are:
3. Freight to be paid at and after the rates of $3.3 per metric ton. F.I.O.S.T?—lashed/secured,/dunnaged ……..
(The acronym stands for Free In and Out Stowed and Trimmed. The letters and following words were added to the printed form "freight" clause).
7. Charterers to have full use of all vessel's gear to assist in loading and discharging cargo. Vessel's gear should only be considered as supplementary to the shore gear. Shore winch/crewmen to be used at all times.
(This clause replaced the "winch" clause which was deleted)
Shippers/charterers/receivers to put the cargo on board, trim and discharge cargo free of expense to the vessel. Trimming is understood to mean levelling off the top of the pile and any additional trimming required by the master is to be for Owners account.
This contract is governed by English law….
Bills of Lading
The cargo was shipped under two bills of lading issued in Bombay on 2 nd January 1998 to the first claimant as shipper. The third claimant was named as consignee. The bills were on the Congenbill form and provided that freight was payable "as per charter party dated 4. 12. 97" and incorporated "all terms and conditions liberties and exceptions" of that contract. The Hague Visby Rules applied.
The Claim
The cargo was discharged at Motril in February 1998. The claimants alleged that it was damaged by rough handling during loading and/or discharging, and/or inadequate stowage due to failure to provide dunnage, failure to secure the coils and/or stacking them so that the bottom layers were excessively compressed.
Both parties agreed to the trial of preliminary issues. Issue 1 was:
Whether on a true construction of (a) the charter party dated 4 th December 1997 and (b) the contracts of carriage contained in or evidenced by the bills of lading numbered 1 and 2 dated 2 nd January 1998 the defendants are under any liability for any damage to the cargo caused as a result of loading, stowage, laying of dunnage, securing or discharging.
The Judgment
I should start by saying that the judgment is a model of clarity and deals fully with the many submissions which were made to the judge. I shall attempt only a brief summary of his conclusions. It was agreed that at common law the obligation to load, stow and discharge the cargo was on the shipowner and that if this responsibility was to be transferred to the charterer, clear words were required. The judge concluded that if clause 3 had stood alone it arguably would not have transferred responsibility to the second claimant but with clause 17 it did. Clause 17 encompassed all cargo operations which would be required by a cargo of ore but no trimming was required for a cargo of steel coils. The parties had identified what was required for such a cargo in clause 3 (lashed/secured/dunnaged) and the real question was whether these activities could be read into the standard form clause 17 in place of or as a definition of the obligation to trim. The judge said:
It is common ground that the express definition of trimming in the second sentence of clause 17 makes no sense in the context of a cargo of steel coils. I agree that the second sentence cannot have been intended by the parties to have had any effect because there would be no "levelling off the top of the pile" of steel coils. It was an apt definition in the context of an ore cargo but not in the context of a cargo of steel coils. However the cargo of steel coils, like a cargo of ore requires to be put on board and discharged. I consider that clause 17 transfers the responsibility for the proper performance of these activities to the charterers. Further, clause 3 shows that the parties gave attention to the cargo activities which this cargo would require instead of trimming once it was in the hold, namely, lashing, securing and dunnaging. My first impression on reading clauses 3 and 17 together was that the reference to trimming in the first sentence of clause 17 should be read as the reference to the activities of lashing, securing and dunnaging in the cargo which the parties had stated this cargo required instead of trimming in clause 3. So read clause 17 is effective also to transfer responsibility for the proper performance of those activities of the charterers.
The judge next had to consider whether clauses 3 and 17 were inconsistent with or inapplicable to the bills of lading. How, for example, could clause 17 transfer responsibility for cargo work at the point of loading to the receivers when the receivers were not there to do it and at the time of loading might be wholly unaware of the terms of the bill of lading? For this reason the judge accepted that performance of the cargo work at the port of loading had been transferred to the shippers and for cargo work at the port of discharge to the receivers. The consequence of this was:
Where a claim under the bill of lading is brought by the receivers in respect of damage done during cargo work at the port of loading the shipowner is not able to say that responsibility for that damage had been transferred to the receiver but he can say that he, the shipowner, had not undertaken to carry out the cargo work at the port of loading or at the port of discharge and that any damage done during loading or stowage was caused by an act or omission of the shipper for which, pursuant to Article IV r. 2 (i), he was not responsible. Conversely where a claim is brought by the shipper in respect of damage done during discharge, the shipowner will have a defence if he can prove that the damage was by a cause arising without the actual fault or privity of the carrier or without the fault or neglect of the agents or servants of the carrier for which pursuant to Article IV r.2 (q), he was not responsible.
This is why he concluded that the first and third claimants could not claim under the bill of lading for damage to the cargo caused by poor loading, stowage or discharge so long as the alleged damage was not caused by the acts or omissions of the defendants, their servants or agents.
The judge reached this conclusion on the assumption that the settled English law about the meaning and effect of Article III r. 2 to which I have referred was correct. On this assumption his construction of clauses 3 and 17 meant that the defendants had not accepted any responsibility for cargo work. But, as I have said, the claimants contended that Article III r. 2 did impose such responsibility on the defendants and to the extent that clauses 3 and 17 said otherwise they were null and void under Article III r. 8 which says:
Any clause, covenant or agreement in a contract carriage relieving the carrier or the ship from liability for loss or damage to or in connection with the goods arising negligence, fault or failure in the duties and obligations provided in this...
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