Jindal Iron and Steel Company Ltd and Others v Islamic Solidarity Shipping Company Jordon Inc.
| Jurisdiction | England & Wales |
| Judge | Tuckey L JJ,Black J,Waller,Nigel Teare |
| Judgment Date | 13 February 2003 |
| Neutral Citation | [2002] EWHC 1268 (Comm) |
| Docket Number | Case No:2000 Folio 1292 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 13 February 2003 |
[2002] EWHC 1268 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
Mr. Nigel Teare QC
Sitting as a Deputy Judge of the Queen's Bench Division
Case No:2000 Folio 1292
Simon Rainey QC and Nicholas Craig (instructed by Jackson Parton) for the Claimants
Timothy Young QC and Sudhanshu Swaroop (instructed by More Fisher Brown) for the Defendants
Hearing dates: 27 and 28 May 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.
INTRODUCTION
This action, like many in this Court, concerns alleged damage to the cargo carried on board a ship. The First Defendants are the owners of the vessel JORDAN II. (The name of the Second Defendants is, apparently, simply a shorthand name for the First Defendants.) They chartered the vessel to the Second Claimants on the terms of a Stemmor Voyage Charter Party (1983) Form dated Hamburg 4 December 1997 for the carriage of a cargo of steel coils from India to Spain. The First Claimants were the shippers of the cargo of steel coils loaded on board the vessel in Mumbai for carriage to Spain and the Third Claimants were the receivers of the cargo in Spain. Bills of lading numbered 1 and 2 on the Congenbill form were issued dated Mumbai 2 January 1998.
The Claimants allege that the cargo was damaged by defective loading, stowage, lashing, securing, dunnaging, separation and discharge of the cargo. The Second Claimant sues under the charterparty and the First and Third Claimants sue under the contracts of carriage contained in or evidenced by the bills of lading. The Defendants contend that pursuant to the terms of the charterparty and the contracts of carriage contained in or evidenced by the bills of lading that they are not responsible for those cargo operations (save for that of separation) but that if they are so liable under the bills of lading to the First and Third Claimants they can recover the amount of that liability from the charterers, the Second Claimants. Preliminary issues were ordered by Morison J. to determine the validity of these contentions.
The issues ordered to be determined are these:
(I) Whether on a true construction of (a) the charterparty dated 4th December 1997 and (b) the contracts of carriage contained in or evidenced by the bills of lading numbered 1 and 2 dated 2nd 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.
(ii) If the Defendants are liable to either the First Claimants or the Third Claimants whether the Second Claimants are liable to indemnify the Defendants against such liability.
These preliminary issues raise not only questions of construction but also a question as to whether the long standing observation of Devlin J. in Pyrene v Scindia [1954] 2 QB 402 that Article III r.2 of the Hague Rules does not oblige the carrier to perform the functions listed in Article III r.2 but only obliges the carrier to perform "properly and carefully" those functions which he has agreed to perform is the correct construction of Article III r.2.
THE CHARTERPARTY
The charterparty was on the Stemmor form. It was designed for the carriage of ore cargoes but on this occasion it was used for the carriage of steel coils. According to clause 43 JORDAN II was a 1988 built Brazilian SD 14 type, 140 m. in length and 20 m. in beam, with 5 holds and 5 hatches. Derricks served the holds and the dimensions of the hatches and holds were set out. The cargo was described in additional typed clause 46 in these terms:
5,500 metric tonnes, 5 percent more or less in Charterers' option, Galvanised Steel coils (maximum pieceweight 12 tons), as full or part cargo in Owners' option. Cargo under this charterparty to be separated by vessel's holds. In case same is not possible, any artificial separation, if necessary, to be arranged by Owners at their time risk and expense. Coils are 6–12 tons in weight with average about 9 tons. Height 1.250 metres - inner diameter 0.5 metres/outer diameter 1.35 metres.
Clause 3 was entitled in the margin "Freight" and provided as follows (the first 10 words being in the original printed form):
Freight to be paid at and after the rate of US$ …. per metric ton F.I.O.S.T. - lashed/secured/dunnaged - …
Clause 7 was entitled "Winch Clause" in the margin. The standard form clause was deleted and in its place was the following typed clause:
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/cranemen to be used at all times.
Clause 17 provided (in its original printed form):
Shipper/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.
By additional clause 44 the charterparty was expressly governed by English law. By additional clause 52 the charterparty incorporated the Hague-Visby Rules.
Mr.Simon Rainey QC submitted on behalf of the Claimants that whilst clause 3 was effective to transfer to the charterers the obligation to pay for the cargo operations of loading, stowing, lashing, securing, dunnaging and discharging the cargo there was no clause in the charterparty that transferred to the charterers responsibility for the proper performance of those operations. Mr.Timothy Young QC submitted on behalf of the Defendants that clauses 3 and 17 effectively transferred to the charterers not only the obligation to pay for those activities but also responsibility for the proper performance of them.
The starting point for construing the charterparty is that at common law the obligation is upon the shipowner to load, stow and discharge the cargo and that if this responsibility for the proper performance of those obligations is to be transferred to the charterer clear words are required. This was common ground. It was submitted on behalf of the Claimants that any such transfer must not only be clear but must also be unambiguous. This submission was based upon the Scottish case of Ballantyne v Patton and Hendry [1912] SC 246. That case concerned a charterparty which provided that "Cargo to be loaded, stowed and discharged free of expense to steamer, with use of steamer's winch and winchmen if required." It was held that this clause was not effective to transfer responsibility for the cargo operations to the charterer. Its present relevance is that Lord Guthrie said that:
It seems to me that the respondents only need to suggest a reasonable interpretation of this clause which would be consistent with the common law duty, because if the common law is to be altered by the terms of the charter-party, that must be done by a clause which admits of no other reasonable interpretation.
It was submitted that this illustrated the need not only for clarity but also for unambiguity in any wording said to be effective to transfer responsibility from the owners to the charterers. However, Lord Guthrie did not say that unambiguity was an additional requirement to clarity. If a clause is truly ambiguous, rather than being merely difficult to construe, it will not be clear and so will not effect a transfer of responsibility. In my judgment the claimed need for unambiguity adds nothing to the need for clarity.
It was also submitted on behalf of the Claimants that a clause may effect transfer of one facet of the owner's obligation to load, stow and carry, for example the duty to arrange for the work to be done or the duty to pay for it but not responsibility for the proper performance of the work. This submission was based upon observations of Sir Johnn Donaldson MR in the Filikos [1983] 1 Ll.Rep. 9 at p.11 where he said:
… at common law the task of loading from ship's rail, stowing and discharging overside is the sole responsibility of the shipowner. However either or both of the duties of (a) arranging for these processes to be carried out and (b) paying for them to be carried out may be transferred by contract to the charterers. So too can liability for breach of the duty of care in carrying out these processes, whether or not either or both the duties of arranging and paying for their performance have been so transferred.
This submission was not challenged but it was said that unless there is good reason to differentiate between the various aspects of the duty the Court, when construing a charterparty, should endeavour to reach a conclusion whereby there was a unity of the various aspects of the duty in either the owner or the charterer. This submission was based upon Brys & Gilsen v Drysdale [1920] 4 Ll.Rep.24. That case concerned a provision in a charterparty which stated that "the Charterers or their agents are to provide and pay a stevedore to do the stowing of the cargo under the supervision of the master." Greer J. held that those words transferred to the charterer the duty of stowing the cargo in the way it ought to be stowed. For present purposes the following passage was relied upon:
It would be an odd state of things if one were to hold that a shipowner who has no contract whatever with the stevedore and who cannot say to the stevedore: You have broken your contract with me, and therefore I will not have you any longer in my vessel; and who has no control over what is to be paid to...
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