P.t. Putrabali Adyamulia v Sellers and Another (RespondentBuyers)
| Jurisdiction | England & Wales |
| Judge | HIS HONOUR JUDGE HAVELOCK-ALLAN Q.C.,His Honour Judge Havelock-Allan Q.C. |
| Judgment Date | 19 May 2003 |
| Judgment citation (vLex) | [2003] EWHC J0519-2 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | Cases No. 2001 Folio 533 and 2001 Folio 512 |
| Date | 19 May 2003 |
[2003] EWHC J0519-2
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
His Honour Judge Havelock-Aallan Q.C.
Cases No. 2001 Folio 533 and 2001 Folio 512
Michael Ashcroft (instructed by Richards Butler) for the Applicant Sellers
Philip Edey (instructed by Holman Fenwick & Willan (in Folio 533) and Ince & Co. (in Folio 512)) for the Respondent Buyers
Approved Judgment
Hearing date: 24 th March 2003
This is the hearing of two appeals, brought with permission granted by Tomlinson J., against awards of the Board of Appeal of the International General Produce Association Limited ("IGPA"). The appellant in both appeals is P.T. Putrabali Adyamulia, who I shall refer to as "the sellers". The respondent in the first appeal (Folio 533) is Société Est Epices ("SEE"). The respondent in the second appeal (Folio 512) is Enrico Webb James SNC ("EWJ"). The awards of the IGPA Board of Appeal arise out of disputes concerning three contracts for the sale of Muntok White Pepper on terms which incorporated IGPA contract form no. 5 (the IGPA contract for pepper, CIF and C&F). Award No. 013/00, dated 10 th April 2001, concerns part of two contracts, dated respectively 17 th May and 10 th June 1999, whereby in each case the sellers sold to SEE a container load of about 15 metric tons of Muntok White Pepper for shipment in January 2000 C&F Rotterdam. Award No. 012/00, dated 4 th April 2001, concerns a single contract, dated 7 th September 1999, whereby the sellers sold to EWJ another container load of about 15 metric tons of Muntok White Pepper for shipment in January 2000 CFR (which is the same as C&F) Leghorn.
The basic facts, as they appear in the two awards and in the short statement of additional facts which the parties have agreed for the purposes of these appeals, can be very shortly summarised. The goods were shipped in Indonesia on a vessel called "INTAN 6 V.360A SN" on 27 th January 2000. On 28 th January, the sellers sent declarations of shipment to the brokers for onward transmission to the buyers. The declarations were passed on to the buyers on 31 st January. The declaration sent to SEE was as follows: "Vessel – INTAN 6 V.360A SN. Port of Discharge – ROTTERDAM. Place of Delivery – ROTTERDAM TRANSHIPMENT IN SINGAPORE". The declaration sent to EWJ was identical, save that the port of discharge and the place of delivery was stated to be Leghorn. On 1 st February the containers and the goods were lost when INTAN 6 sank off Bangka Island in Indonesia. The buyers were notified of the loss on 3 rd February. But the sellers insisted on being paid for the goods. On 4 th February, they presented the shipping documents to the buyers' banks. These included bills of lading for each parcel which, in the case of the sale to SEE identified the INTAN 6 and the HANJIN DALIAN as the carrying vessels and in the case of the sale to EWJ identified the INTAN 6 and the LG GLAMOUR as the carrying vessels. The buyers declined to pay for the documents. Whilst there is no finding in the awards as to why the documents were not taken up, it is an inescapable inference from the other facts found and from the Board of Appeal's summary of the respective buyers' submissions that the buyers in both cases refused to accept the documents because of the characteristics of INTAN 6. INTAN 6 was an unpowered barge. The goods were lost while the containers were being towed on INTAN 6 from Indonesia to Singapore. SEE considered that INTAN 6 was not a "first class ship" within the meaning of clause 6 of IGPA contract no. 5. EWJ took the same point; but their principal complaint was that the insurers to whom they had declared the cargo after receiving the declaration of shipment, had avoided the contract of insurance when they learned of the type of vessel on which the goods were being carried.
The claim in both arbitrations was a claim by the sellers for the price of the goods or for damages for the buyers' failure to pay the price. The arbitrators were unable to agree and the umpire made awards upholding the claim and directing that the buyers should settle the price against presentation of the shipping documents. The umpire's awards were published on 30 th October 2000. The buyers appealed, and the Board of Appeal reversed the umpire's decision in both cases. The Board expressed its conclusion in both appeal awards in the following terms :
"4. FINDINGS
Under a C&F contract Buyers can only accept liability when the goods are loaded on board the ship. The contract called for shipment without mention of any specific origin. The Shipment and Classification clause in IGPA contract no. 5 states that:
Clause 6
"shipment must be by a first class ship(s) classed not lower than 100 A1 in the Lloyd's Register or equivalent classification in any register which is a member of the International Association of Classification Societies"
The declaration was made in advance of the goods being loaded onto the ocean vessel giving the name of an unpowered barge, contrary to the terms of the contract. The declaration was thus defective. Buyers were entitled to object to the declaration within 3 days of tender, but were unable to do so, as they were unaware that the declaration was flawed. Buyers could not have objected to the declaration until they knew of the ship's classification. …
THE BOARD OF APPEAL HEREBY OVERTURNS THE ARBITRATION AWARD … AND FINDS THAT the Buyers were not in breach of contract for non-payment."
Early in May 2001 the sellers issued applications for permission to appeal against the awards. For some reason the applications were not heard until 4 th February 2002. They were heard together on that date by Tomlinson J. In the intervening period the Commercial Court had heard and determined another appeal against an award of the IGPA Board of Appeal, which concerned two other consignments of pepper on board INTAN 6. In P.T. Putrabali v Fratelli de Lorenzi SNC (15/10/01, unreported) Moore-Bick J. had allowed an appeal by the sellers against an award in materially identical terms to the subject awards. The facts were the same, save that the goods had been sold C&F Trieste. The decision in that case was no doubt a powerful factor in persuading Tomlinson J. to grant permission to appeal. He found that in the present cases the statutory criteria were met, but added the following rider to his Order granting permission to appeal:
"Both sides, to a greater or lesser extent, appear to wish to rely on facts not found by the Board of Appeal. That may or may not prove necessary or appropriate, but it might be prudent to consider to what extent it is possible to agree any further facts over and above those expressly found by the Board, particularly where such can be proved or deduced from documents and/or are not controversial. I am not suggesting that an order under section 70(4) requiring further reasons will inevitably be necessary before the Court can properly consider the appeal but in the light of full argument of the issues such an order is an obvious possibility and I am merely concerned to try to avoid costs and delay if that is at all possible."
In the case of SEE, Tomlinson J. also said: "Should the Counterclaim become a live issue it seems likely that a remission under section 69(7) is inevitable".
These observations reflected the fact that both the sellers and the buyers appreciated that the IGPA Board had not made the basis of its conclusion as explicit as it might have done. The Board had not stated expressly why shipment on a vessel which was an unpowered barge was contrary to the terms of the contract or why the naming of that vessel in the declaration of shipment rendered the declaration ineffective. The parties had filed a number of statements with the Court which addressed the background to the dispute. In particular the buyers had exhibited to their statements copies of the written submissions and documentary evidence which had been placed before the Board. These contained facts and matters not found in the awards. In addition the submissions made by SEE included a counterclaim not mentioned in award No. 013. I shall return to that counterclaim later.
The sellers identified two questions of law when they applied for permission to appeal. Before turning to those questions, it is convenient to set out the relevant provisions of IGPA contract no. 5. They are to be found in clauses 6, 10 and 11:
"6. SHIPMENT AND CLASSIFICATION: By first class ship(s) classed not lower than 100 A1 in the Lloyd's Register or equivalent classification in any register which is a member of the International Association of Classification Societies. The goods of the contract description to be shipped on ships which will proceed directly or indirectly on a geographical normal commercially acceptable route from the port of shipment to the port/s of destination. "Overseas ship"; "ocean-going ship", or similar words, shall mean a ship employed in carrying the contract goods on a sea-voyage from the port, place or country of shipment to the destination named in the contract direct or indirect with liberty to call and/or tranship at other ports. …
Where in any contract for goods sold for shipment it is expressly stipulated that shipment must be made on an ocean-going ship or ships, as defined above, a shipment shall be deemed not to have been made unless and until the contract...
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