President of India v Metcalfe Shipping Company Ltd (Dunelmia.)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE fENTON ATKINSON |
| Judgment Date | 08 October 1969 |
| Judgment citation (vLex) | [1969] EWCA Civ J1008-1 |
| Date | 08 October 1969 |
| Court | Court of Appeal (Civil Division) |
In the Matter of the Arbitration Act 1950
and
In the Matter of an Arsitration
[1969] EWCA Civ J1008-1
The Master of the Rolls (Lord Denning)
Lord Justice Edmund Davies and
Lord Justice Fenton Atkinson
In The Supreme Court of Judicature
Court of Appeal
Appeal of the Respondents, Hercalfe Shipping Co. Ltd., from judgment of Mr. Justice Megaw on 23th November, 1968.
Mr. MICHAEL KERR, Q.C., and Mr. BASIL ECKERSLEY (instructed by Messrs. Sinclair Roche & Temperley, agents for Messrs. Botterell Roche & Temperley, Newcastle-upon-Tyne) appeared on behalf of the Appellants.
Mr. ROBERT GOFF, Q.C., and Mr. JOHN HOBHOUSE (instructed by Messrs. Stocken & Co.) appeared on behalf of the Respondents.
We will decide this case on the appeal. We do not propose to go into the cross notice.
In 1961 the Government of India bought a quantity of fertiliser from sellers in Italy. They chartered a British ship, the "Dunelmia", to carry the fertiliser from Ancona to Madras. The Italian sellers loaded the fertiliser on to the ship and took a bill of lading to order. They endorsed it in blank. They presented it in due course to the Government of India, who paid the price, took the bill of lading and obtained delivery of the goods. But they claimed that there was a shortage on delivery and asked for arbitration in accordance with a clause in the charter party. The shipowners refused. They said that the carriage was governed not by the charter party out by the bill of lading which did not contain an arbitration clause. So the question is which is to govern? The charterparty? or the bill of lading?
Four contracts fall for considerations first, the contract of sale. In February, 1961, the Italian sellers, who were called Anic, agreed to sell to the Government of India 8,000 metric tons of a fertiliser called urea. The price was £31. 17s.3d. per metric ton "net f.o.b. stowed port of exit' The phrase f.o.b. stowed port of loading" was defined as meaning that the sellers were to "be responsible for any loss or damage, or both, until the goods have been placed actually on board the vessel on the date or within the period fixed, and clean on board ocean Bill of Lading is delivered to the Purchasers or the Agent nominated by Purchasers". By reason of that clause, the arbitrator and the Judge held that the sellers reserved the right of disposal of the goods until the Bill of Lading was presented to and taken up by the purchasers 1 and accordingly that the property in the goods remained in the sellers until that time, even after the goods were loaded. I am prepared to accept that view, although the shipowners in their cross notice reserve their right to challenge it.
The second contract is the charterparty of the 6th June,1961, under which the shipowners agreed that the "Dunelmia" would proceed to an Italian port and there load at a safe berth a cargo of 8,000 metric tons of urea in bags and being so loaded, the vessel shall proceed with all convenient speed to Madras and there deliver the cargo at a safe berth on being paid freight 80/- net." I need not go through all the clauses of the charter. Suffice it to mention clause 7, which says; "The lister or his agent shall sign Bills of Lading at any rate of freight required by the charterers or their agents, without prejudice to this charterparty, but at not less than the chartered rate." And clause 17s - Any dispute arising under this Charter shall be settled in accordance with the provisions of the Arbitration Act, 1950 in London:". In pursuance of that charterparty, the "Dunelmia" went to Ancona, and loaded these 8,000 tons of fertiliser.
The third contract is the bill of lading of the 11th July, 1961. The Master signed a bill of lading which was on a printed form of the sellers, the Anis company. It says. "Shipped by Anic on the "Dunelmia" to be conveyed to Madras and on safe arrival to be delivered unto order. The goods are described, and then this clause: "All conditions and exceptions as per charterparty stipulated at London on 6th June, 1961." It was issued to the shipper Anic.
The fourth contract is the indorsement and delivery of the bill of lading. Anic indorsed it in blank and sent it forward with the invoice to the representative of the Government of India in London. The price was paid. The bill of lading was released to the Government of India, who sent it to Madras, and took delivery of the goods.
The only other matter I need mention is that under the Bills of Lading Act, 1855, "every indorsee of a Bill of Lading to whom the property in the goods therein mentioned shall pass, upon or by reason of the indorsement, shall have transferred to him and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the Bill of Lading had been made with himself.
The Government of India said that there was a shortage of cargo delivered. In 1963 they wished to refer the dispute to arbitration in accordance with the clause in the charterparty; but the shipowners said the goods were carried on the terms of the bill of lading, which contained no arbitration clause. The bill of lading said; "… all conditions and exceptions as per charterparty", but that did not bring in the arbitration clause, see T.W. Thomas & Co. Ltd. v. Port sea Steamship Co. Ltd. (1912 A.C. 1). If the shipowners are right, it means that the charterers have to sue at laws but it is too late to do so, because the Statute of Limitations has run.
So the charterers rely on the charterparty. The shipowners rely on the bill of lading. Which is the governing contract? The shipowners pray in aid some passages in the textbooks. First, Scrutton on Charterparties, Article 18, says at page 46
"Where, however, a bill of lading is issued to a shipper, other than the charterer, differing in terms from the charter, and the charterer subsequently becomes indorsee of the bill of lading, the latter is bound by its terms and cannot assert against the shipowner that in his hands the bill of lading is a mere receipt and the charter the only effective contract' - for which is cited the case of Calcutta S.S. Co. v. Weir (1910 1 K.B. 759) and Hogarth S.S. Co. v. Blyth (1917 2 K.B. 534).
Second is Carver "Carriage by Sea:", Article 405, page 340s "Where on the other hand bills of lading are given to a shipper, not being the charterer or his agent, and he indorses them to the charterer, the bills of lading become the governing documents in a claim by the charterer against the shipowners for damage to the goods." And the same two cases are cited.
Are these statements right? I will first consider the matter upon principle. It seems to me that, whenever an issue arises between the charterer and the shipowner prima facie their relations are governed by the charterparty. The charterparty isnot merely a oontraot for the hire of the use of a ship. It is a contract by which the shipowners agree to carry goods and to deliver them. If the shipowners fall to carry the goods safely, that is a breach of the contract contained in the charterparty; and the charterers can claim for the breach accordingly, unless that contract has been modified or varied by some subsequent agreement between the parties. The signature by the Master of a bill of lading is not a modification or variation of it. The Master has no authority to modify or vary it. His authority is only to sign bills of lading "without prejudice to the terms of the charterparty". There is a long list of cases on this without prejudice" clause. In Hansen v. Harrold Brothers (1894 1 Q.B. 612) Lord Esher said at page 619: "The meaning is that it is a term of the contract between the charterers and the shipowners that, notwithstanding any engagements made by the bills of lading, that contract shall remain unaltered." It is sometimes said that the "without prejudice" clause is put in for the benefit of the shipowners only. But that is not correct. It is for the benefit of both shipowners and charterers. In ( Turner v. Haji Golam Mahoned Azam 1904 A.C. 826) Lord Lindley, giving the judgment of the Privy Council at page 837, said. "The words, 'without prejudice to this charter' mean that the rights of the shipowners against the time charterers, and vice versa, are to be preserved. In this case therefore, the bill of lading did not modify or vary the charter. And there is nothing else. So the charter governs.
I now turn to the case of Calcutta v. Weir (1910 1 K.B. 759; 15 Commercial Cases 172), which is. said to decide the contrary. The "Calcutta"' was chartered to go from Bombay to Busreh and load a cargo of lawful merchandise. She was put up at Busreh as a general ship. A man called Noats shipped 1031 boxes of dates on the ship on the terms of a bill of lading. The bill of lading contained a number of exceptions which were not in the charter-party. Whilst the goods were afloat, Mr. Noats borrowed some money. He borrowed it from the charterers. Noats indorsed thebill of lading to them as security for the advance they made. They eventually took delivery of the dates but alleged that they were not in good order and condition. The charterers sought to sue the shipowners for the damage to the dates. The charterers said that they were "shipped under the charterparty, which did not contain exceptions. But the shipowners said that the goods were shipped under the bill of lading which contained exceptions. The question was: which contract was to govern? Mr. Justice Hamilton said that the allegation "shipped under the charterparty" had not been proved in fact. The dates were not shipped under the charterparty but under the bill of lading. So the remedy was only under the bill of lading. As I understand it, Mr....
To continue reading
Request your trial
-
Unicredit Bank A.G. v Euronav N.v
...the bill not the charter which governs the contractual relationship with the carrier. 55 In President of India v Metcalfe (The Dunelmia) [1970] 1 QB 289, this Court decided the opposite, namely that in such circumstances the contract was on the charterparty terms, not those of the bill of ......
-
Sevylor Shipping and Trading Corporation v Altfadul Company for Foods, Fruits & Livestock
...bill of lading independently of the charter as in Calcutta S.S. Co Ltd v Andrew Weir & Co [1910] 1 KB 759, as explained in The Dunelmia [1970] 1 QB 289. The mere receipt rule was unaffected by the operation of the Bills of Lading Act 1855 if the charterer was the indorsee of the bill to w......
-
Parsons Corporation v C v Scheepvaartonderneming Happy Ranger
...the terms of the contract it would not be a bill to which the Rules would apply. He relied by analogy, as did the judge, on President of India v Metcalfe Shipping Co. [1970] 1 QB 289. In that case the dispute was between voyage charterers and owners as to whether a claim for short delivery ......
-
Thai-Europe Tapioca Service Ltd v Pakistan (The Harmattan) (Hanseat II)
...a voluntary submission to the jurisdiction of the arbitrators and the supervision of them by the Courts: see, for instance, President of India v. Metcalfe & Co. Ltd. (1970) 1 Q. B. 289.But even if there is no arbitration clause — or for any reason it is inapplicable — a foreign government ......
-
UNRAVELLING THE IDENTITY OF THE CARRIER
...AFEA Line Ltd. of Hong Kong. 8 [1949] 82 Lloyd’s L.L. Rep. 936. 9 Ibid., at 954. 10 See President of India v. Metcalfe Shipping Co. Ltd.[1970] 1 Q.B. 289 and Love & Stewart Ltd. v. Rowtor Steamship Co. Ltd.[1916] 2 A.C. 527. 11 This paper shall not attempt to examine whether the rule as sta......