Republic of India and Another v India Steamship Company Ltd (Indian Endurance and Indian Grace)

JurisdictionEngland & Wales
Judgment Date26 September 1991
Judgment citation (vLex)[1991] EWCA Civ J0926-3
Docket Number91/0884
CourtCourt of Appeal (Civil Division)
Date26 September 1991

[1991] EWCA Civ J0926-3






Royal Courts of Justice


Lord Justice Glidewell

Lord Justice McCowan


Lord Justice Leggatt


(1) The Republic Of India
(2) The Government Of The Republic Of India (ministry Of Defence) Being The Owners Of The Cargo Lately Laden On Board The Vessel 'Indian Grace'
Appellants (Plaintiffs)
India Steamship Company Limited (Being the Owners of the Vessel 'Indian Endurance')
Respondents (Defendants)

MR. T. CHARLTON (instructed by Messrs Clyde & Co.) appeared on behalf of the Appellants (Plaintiffs).

MR. S. GRUDER (instructed by Messrs Ince & Co.) appeared on behalf of the Respondents (Defendants).


I will ask Lord Justice Leggatt to deliver the first judgment.


On 12th December 1990 Mr. Justice Sheen struck out the plaintiffs' claim with costs. The plaintiffs are The Republic of India and the Ministry of Defence of the Indian Government. The defendants are India Steamship Company Limited. The plaintiffs' claim is for damages for breach of contract or breach of duty or negligence in and about the loading, handling, custody, care and discharge of the plaintiffs' cargo and the carriage thereof on board the defendants' ship "Indian Grace", pursuant to bills of lading dated 26th June 1987 from Uddevalla in Sweden to Cochin in India during the summer of 1987, which caused loss, damage and delay. The action was struck out on the grounds:

  • (1) that the cause of action relied on was the same as that on which the plaintiffs had relied when they obtained judgment in India for damage to part of the same cargo caused by the same breach of contract; and

  • (2) that section 34 of the Civil Jurisdiction and Judgments Act 1982 (to which I shall refer simply as "section 34") was an absolute bar to the bringing of the English proceedings.


The plaintiffs now appeal, arguing that the judge was wrong on both grounds.


It was on 26th June 1987 that the vessel sailed for India from Sweden, laden with some 850 metric tonnes of munitions consisting mostly of shells. A few days later, on 1st July, a fire was discovered in No. 3 Hold. In that hold was wood pulp, in addition to munitions. The vessel diverted to Cherbourg, and the cargo was inspected by the French Navy, repackaged so far as necessary and restowed. During this process some shells were jettisoned. Though there are references to 61 shells lost in this way, the correct figure appears to be 51. On 6th August 1987 the vessel resumed her voyage. On 4th September the cargo was cleared from the vessel in Cochin and inspected by a surveyor. On 9th December 1987 the Ministry of Defence in New Delhi wrote to the defendants making a claim for the total loss of the whole cargo in the sum of 136 million rupees, of which the Stirling equivalent was about £2.6 million. The defendants' reply of 2nd January 1988 asked, in effect, for further particulars of the loss. On 3rd February the plaintiffs made a notice of claim in the considerably smaller sum of 189,508 rupees or about £9,000. That claim was said to have been made as per directions from Army Headquarters. It was made to the vessel's agents, and that claim seems to have been answered on 29th February by letter from the defendants to the Madras Commandant in which it was said that they had already received a claim for the whole cargo in the sum of 136 million rupees. There followed exchanges between the parties asking for and granting an extension of time under the gold clause agreement, and subsequently asking for and receiving confirmation of acceptance of English law and jurisdiction in this particular claim.


On 1st September 1988 The Union of India as plaintiffs represented by the Madras Commandant issued a plaint in the Subordinate Judge's Court in Cochin, with what has been later described as appropriate authority, seeking damages for the 51 shells not delivered. The plaint referred to the fact that fire had broken out in Number 3 hold of the vessel on 3rd July 1987 and referred to the notice of claim issued "as per directions from Army Headquarters". It mentioned expressly that the Ministry of Defence had already lodged a claim for 136 million rupees for the alleged loss of the entire consignment covered under a specified bill of lading. It then identified a total of 51 shells and ten charge bags as being the subject of the present claim. It was specifically alleged that the damage was suffered by the plaintiffs on account of negligence and carelessness of the defendants while the cargo was in transit in the vessel "Indian Grace" owned by the first defendant and made plain that the suit in Cochin was confined to the claim in respect of the goods lost.


On 25th August 1989 the writ in the present action was issued on England.


On 16th December judgment was delivered in Cochin. It is necessary to see the basis on which the claim was dealt with by the judge. He characterised as "deficiencies" the subject of the claim in that action and mentioned himself the lodging of a claim for the alleged total loss of the entire consignment by the Ministry of Defence. The judge described the manner in which the cargo had been stowed and said that the cargo of wood pulp over which some of the shells had been loaded had greatly expanded on account of water used to extinguish the fire. It did so in an upward direction thereby pushing the palletised units to the upper levels of the hold, resulting in what the judge called "a situation of extraordinary peril for the ship and her cargo". He described how the French Naval Authorities decided to separate the damaged pallets containing the projectiles and charges from the undamaged ones, and referred to the circumstances in which the shells had either been lost overboard in the course of these activities or deliberately jettisoned.


When the judge came to identify the issues in the case before him he expressed the second issue as being whether the damage caused to the plaintiffs was due to the negligence and carelessness of the defendants and he referred to that aspect this way:

"Al thought his issue is worded in such a way as to cover the damages caused to the consignment in question, the parties here in this suit are at issue only in respect of the liability of the carriers in regard to the deficiency of the cargo landed at the Port of Cochin. The point in dispute in this case also confines to the liability or otherwise of the carriers regarding the deficiency of the cargo at the time of delivery. I say this at the outset, because the plaintiff appears to have a case that the damages caused to the consignment in question is much more than the amount claimed in this plaint. That question also did not arise for consideration in this suit".


The judge then referred to the fact that the short delivery of the consignment to Cochin was of course not disputed, and he concluded:

"It has therefore to be found that the deficiency of the cargo as stated by the plaintiff is correct".


He remarked that the short delivery of the consignment was essentially because of the fire that broke out in Hold No. 3 of the vessel, and posed to himself the question whether the carrier exercised as much care and caution as is expected of a prudent shipowner in the carriage of sophisticated weapons like the disputed consignment. He said that that was attested by the defendants' surveyor who had asserted that the fire started on top of the first layer of wood pulp loaded in Hold No. 3. The judge continued:

"…It is in evidence that 883 tons of wood pulp and cork products were stowed in Hold No. 3 beneath steel plates and steel beams on top of which the classified cargo belonging to the plaintiff was loaded, the cause of the fire is not conclusively established. Nevertheless, it is not disputed that the that the fire was accidentally caused".


The judge then reviewed the evidence of the witnesses called before him, including the Master", and he said after doing so:

"…Despite the evidence given by D.W.2. [the surveyor] in this regard, it cannot be said that loading of sophisticated weapon on top of wood pulp and cork products is an act of prudence on the part of the shipowner as it is spoken to by D.W.1 [the Master] before court".


The judge then recited Article IV, rule 2, of the Indian carriage of Goods by Sea Act 1925, which evidently produces verbatim the corresponding provision of the Hague-Visby Rules.


He said:

"[that rule] no doubt exonerates the liability of the carrier in certain circumstances. As per the said rule neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from…fire unless that fire was caused by actual fault or privity of the carrier".


The judge remarked that that rule

"…is evidently an exception to the general rule that the carrier is responsible for the loss occurred when the cargo was in their custody. The burden is also upon the carrier to show that the fire was caused not by any actual fault or privity of the carrier.…By examining [the witnesses] the defendants have of course made an attempt to discharge this burden. But I do not think that this attempt of the carrier did succeed in the facts and circumstances of this case. This is primarily because the carrier is not successful in showing that the loading of plaintiff's cargo on top of wood pulp and cork product is an act of prudence. So much so, it has to be found that the carrier cannot be exonerated from liability by virtue of the provisions contained in Rule 2, Article IV of Carriage of Goods by Sea Act 1925".


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