P & O Nedlloyd BV v Arab Metals Company [2006] EWCA Civ 1717
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moore-Bick,Lord Justice Jonathan Parker,Lord Justice Buxton |
| Judgment Date | 13 December 2006 |
| Neutral Citation | [2006] EWCA Civ 1717 |
| Docket Number | Case No: A3/2006/2186 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 December 2006 |
[2006] EWCA Civ 1717
Lord Justice Buxton
Lord Justice Jonathan Parker and
Lord Justice Moore-Bick
Case No: A3/2006/2186
IN THE SUPREME COURT OF JUDICAT
COURT OF APPEAL ( CIVIL DIVISI
ON APPEAL FROM THE HIGH COURT OF JUST
QUEEN'S BENCH DIVISION (COMMERCIAL COU
Mr. Justice Tomlinson
2004 Folio 190
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr. Simon Rainey Q.C. and Mr. Nicholas Craig (instructed by Richards Butler) for the appellant
Mr. Michael Davey (instructed by Ince & Co) for the third respondent
The first and second respondents did not appear and were not represented
1. Background
This is an appeal by P&O Nedlloyd B.V. ("P&O") against that part of an order made by Tomlinson J. on 5 th October 2006 by which the judge refused its application for an order for specific performance by the third respondent, Ireland Alloys Ltd ("Ireland Alloys") , of a contract of carriage of two containers of scrap metal entered into in May 1998.
Although the history of this matter is extensive, the events which gave rise to the dispute can be summarised relatively briefly. On 1 st May 1998 Ireland Alloys entered into a contract with the second respondent, Stena Trading AB, then called Stena Non-ferrous Metals AB, ("Stena") for the purchase of a quantity of scrap metal c.i.f. Felixstowe. In order to enable it to perform that contract Stena entered into a contract on 7 th May 1998 with the first respondent, Arab Metals Co ("Arab Metals") , for the purchase of a similar quantity of scrap metal on corresponding terms. The goods were shipped on board the vessel UB Tiger by Arab Metals at Alexandria the same day for carriage to Felixstowe in two containers under a bill of lading issued by P&O. The goods were discharged in Felixstowe just before the end of May and transferred to P&O's container depot at the port. The bill of lading, which had been indorsed by Stena in favour of Ireland Alloys on 18 th May, was surrendered to P&O when the goods were discharged from the vessel.
On 27 th May 1998 forwarding agents by the name of Wm. Martin & Co (Marine) Limited ("Wm. Martin") acting on behalf of Ireland Alloys sent a fax to P&O requesting delivery of the containers to Ireland Alloys' premises in Hamilton and as a result both containers were carried by road from Felixstowe to P&O's depot at Coatbridge. On 1 st June the first of the two containers was taken to Ireland Alloys' premises, but a Geiger counter passed over it at the weighbridge just inside the entrance to the yard registered the presence of radioactive materials and as a result Ireland Alloys refused to accept delivery of either container. The container was taken back to the Coatbridge depot where it remained with its companion while investigations were undertaken.
On 3 rd June the containers and their contents were examined by the National Radiological Protection Board. The sacks of scrap metal, which included parts salvaged from pumps and other oilfield equipment, were found to contain various items whose surfaces were contaminated by radioactive material. Apparently this is a well-known phenomenon in the case of oilfield equipment and results from the concentration within the equipment of radioactive materials occurring naturally within the earth's crust. Although the level of radiation was low (an expert asked to advise the parties some years later described the level as lower than that to be found in some household smoke alarms) , in a report issued on 12 th June 1998 the surveyor from the National Radiological Protection Board classed the material as radioactive waste, thus bringing it within the scope of the regulations dealing with the transport and storage of radioactive material. A few days later P&O reported the position to the Scottish Environmental Protection Agency ("SEPA") and sought its advice.
The classification of the material as radioactive waste created many problems. SEPA's response was that the containers should be returned to Egypt and as a result P&O made contact with Arab Metals who agreed to accept their return. However, it was first necessary to obtain permission from the Egyptian authorities to import the goods into Egypt. Initially that did not appear to present a problem because on 23 rd August 1998 the Egyptian Atomic Energy Authority gave permission for the containers to be returned to Alexandria, provided they were held at the port until it had examined their contents. Unfortunately, however, things did not go smoothly thereafter. Arab Metals had already had difficulty in finding a carrier willing to handle the goods, but that problem could no doubt have been overcome since P&O itself could have fulfilled that role if asked to do so.
Although at this early stage Arab Metals appears to have been willing to accept the return of the containers, practical arrangements fell foul of bureaucracy at both ends. In Scotland a good deal of time was spent obtaining information and advice from SEPA and in Egypt it became clear that it would be prudent, if not essential, to obtain formal confirmation from bodies other than the Atomic Energy Authority that any carrier would be allowed to land the containers in Egypt. Thus in October 1999 P&O's agents at Alexandria, Naggar Shipping Co, warned that they could not advise it to attempt to return the containers until it had obtained formal written confirmation from the Ministry of Health, the Port Authority and the operator of the container terminal that the containers would be accepted. By that time the British Embassy in Cairo had become involved in an attempt to persuade the Egyptian authorities to lend their assistance, but to no avail.
It might have been thought that, if the containers could not be returned to Egypt, their contents could be decontaminated or disposed of in this country. However, that has so far not proved possible. There are facilities in the United Kingdom that could undertake that work, but it seems that the cost would be considerable and that it would require a specific permit since the operator's existing permits do not cover the processing of radioactive waste emanating from abroad. In April 2000 P&O asked SEPA whether the material could be disposed of in Scotland, but was told in July of that year that it could not. Since that time the authorities in the United Kingdom, including the Department for Transport, have insisted that Egypt has a responsibility to accept the return of the containers and while they seek to implement that solution they have been unwilling to grant permission for the scrap to be disposed of within the United Kingdom. The Egyptian Atomic Energy Authority has now withdrawn its permission for the containers to be returned to Alexandria, in part because of the delay. It seems to be accepted by everyone that the Radioactive Material Transport Division of the Department for Transport is the competent authority to give permission for the carriage of the containers back to Egypt, but it will not authorise their transport without confirmation from Egypt that they will be accepted on arrival. Such confirmation has not so far been forthcoming and it must now be doubtful whether it ever will be. In effect, therefore, the position has become one of stalemate.
While P&O continued to operate the Coatbridge depot there was no pressing need to remove the containers since there was room to accommodate them there and SEPA was satisfied that they posed no environmental or health hazard. However, no doubt frustrated by the lack of progress in resolving the matter and conscious of the passage of time, on 20 th February 2004 P&O gave formal notice to Ireland Alloys under section 12 of the Torts (Interference with Goods) Act 1977 that the containers were ready for delivery. The purpose of doing so was to give rise to an obligation on Ireland Alloys to accept delivery of the containers. On 8 th March 2004 P&O commenced these proceedings against Arab Metals, Stena and Ireland Alloys seeking (among other things) a declaration as to the ownership of the containers, a declaration that the defendants were under an obligation to take delivery of them, damages for breach of contract and an order for specific performance of the contract of carriage by taking delivery of them.
In August 2005 P&O was acquired by the Danish shipping company A.P. Moller-Maersk A/S. That led to a restructuring of the businesses operated by P&O and to a decision to close down the Coatbridge depot and to sell it for development. The removal of the containers has now acquired a certain amount of urgency, therefore, because the presence of radioactive material on the site is likely to hinder its sale.
2. The proceedings
On 15 th April 2004 P&O served the claim form on Ireland Alloys together with particulars of claim; the documents were served on Stena on 29 th April 2004. Arab Metals was served in Egypt with the permission of the court, but has taken no part in the proceedings. The claim was made under the bill of lading which was said to cover through carriage from Alexandria to Hamilton. However, in their defences which were served on 22 nd July 2004 both Stena and Ireland Alloys denied that the bill of lading contract covered the carriage from Felixstowe to Hamilton. As a result P&O applied for permission to amend its particulars of claim to allege that the contract had been varied to cover that stage of the journey or, alternatively, that the instructions given by Wm. Martin for the carriage of the containers from Felixstowe to Hamilton...
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