Sang Stone Hamoon Jonoub Company Ltd v Baoyue Shipping Company Ltd and Another
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Males,Mr Justice Males |
| Judgment Date | 31 July 2015 |
| Neutral Citation | [2015] EWHC 2288 (Comm) |
| Docket Number | Case No: 2013 Folio 579 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 31 July 2015 |
[2015] EWHC 2288 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Males
Case No: 2013 Folio 579
Mr Yash Kulkarni (instructed by Duval Vassiliades) for the Claimant
Mr Neil Henderson (instructed by MFB Solicitors) for the Defendant
Hearing dates: 21–23 July 2015
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 is a claim for the conversion of a cargo of iron ore carried from Bandar Abbas in Iran to Tianjin in China on board the defendant's vessel "Bao Yue" in February and March 2012 and a counterclaim for storage charges incurred on the cargo. No bill of lading was presented at the discharge port so the cargo was discharged into storage at Tianjin. The storage charges due as a result eventually exceeded the value of the cargo which has been there ever since. The warehouse company wants to be paid before it will release the cargo. The claimant bill of lading holder contends that the defendant converted the cargo. It accepts that the defendant was entitled to discharge the cargo into storage, but contends that the defendant nevertheless converted it because (a) without the claimant's express or implied authority, a lien for storage charges was created in favour of the warehouse company, and (b) statements were made by the warehouse company and the vessel's agent which amounted to denying the claimant access to the cargo regardless of whether it presented the bill of lading. The defendant shipowner denies having converted the cargo and contends that the claimant is responsible for the storage charges.
The facts
The claimant, an Iranian company, was the shipper of the cargo, 35,376.611 metric tons of iron ore. The defendant was the contractual carrier and issued a bill of lading dated 4 February 2012 to the claimant as the shipper. The bill was issued "to order", with no named consignee or notify party, on the Congenbill 1994 form. It incorporated "all terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf", although no such charterparty was identified on the face of the bill. It is common ground, nevertheless, that this was effective to incorporate the terms of the applicable voyage charter.
The charterparty chain was as follows:
a. The defendant time-chartered the vessel to Shanghai Hengxin Shipping Co Ltd ("Shanghai Hengxin") under a time charter dated 18 March 2011.
b. Shanghai Hengxin voyage-chartered the vessel to a company called Ocean Mine Ltd ("Ocean Mine") by a fixture dated 7 December 2011.
c. Ocean Mine further voyage-chartered the vessel, on back-to-back terms, to Qisheng Resources Ltd ("Qisheng Resources") also by a fixture dated 7 December 2011. Qisheng Resources is part of a group of companies known as the Qisheng Group.
As the two voyage charters were on back-to-back terms, it is unnecessary to consider which of them was incorporated into the bill of lading. They each contained the following clause 12:
"Congen bill 94 to be used. In case original Bs/L would not be ready upon vessel's arrival at discharge port, Owners allow to discharge cargo upon arrival to custom bonded warehouse area against Charterer's single LOI with Owners P&I Club wording signed by Chrs.
Release cgo agnst original bill of lading. In the event cargo being kept in the warehouse in lieu of waiting for OBL to arrive at the discharge port, the expense of warehouse and all relevant costs to be for Chrtrs' account. …"
The cargo was the third in a series of three shipments sold on FOB terms under an agreement between the claimant as seller and a Chinese company, Teda Qisheng Mineral Products Import & Export Trading Co Ltd ("Teda"), another company in the Qisheng Group, as buyer. This agreement was itself the settlement of an earlier dispute which had arisen under an agreement concluded in December 2009. However, a further dispute arose in which the claimant contended that Teda owed it a total of US $565,891.58.
This was made up as follows:
a. The total FOB price of the three cargoes was US $2,876,391.14, of which US $1,127,205.03 was for the "Bao Yue" cargo. Teda had already made payments of US $2,544,339.56, leaving a balance due of US $332,051.58. Thus Teda had already paid US $795,153.45 (or just over 70% of the FOB price) for the "Bao Yue" cargo as well as bearing the cost of freight to China.
b. The claimant contended that Teda also owed it US $233,840 pursuant to the original 2009 contract.
Teda disputed liability to pay this amount, contending that it was the claimant who owed it money, but the claimant allowed the cargo to be loaded and the vessel to sail from Bandar Abbas, hoping and expecting that the dispute would be sorted out. It did not send the bill of lading to Tianjin but locked it in the safe of its office in Teheran. Teda pressed for release of the bill, telling the claimant on 23 February 2012 that the vessel's ETA was 29 February, but continued to maintain that no payment was due to the claimant.
It appears that it was in any event expected that, as is common, the bill of lading would not or at least might not be available at the discharge port on the vessel's arrival. Arrangements were therefore made for the discharge of the cargo pursuant to letters of indemnity in standard form given by each charterer in the chartering chain described above. The letter of indemnity requested the defendant to discharge (not deliver) the cargo to the agent at Tianjin, Tianjin Star Ship Agency Co Ltd (" Star Ship"), who was to deliver/release the cargo against presentation of the original bill of lading.
Nobody presented the bill of lading (which was still locked in the claimant's safe) when the vessel arrived at Tianjin and tendered notice of readiness at 14.00 local time on 3 March 2012, having been delayed by bad weather. Accordingly Star Ship arranged for discharge of the cargo into a warehouse operated by Tianjin QS Storage & Transportation Co Ltd ("TQST"). TQST was another company in the Qisheng Group, but the warehouse which it operated was what was described as an "associated warehouse" operated in conjunction with the port of Tianjin which was used as a bonded warehouse for cargoes awaiting customs clearance. It was about nine kilometres from the berth. It was the evidence of the defendant's witnesses that although Tianjin is a major port with extensive warehouse facilities, March 2012 was a time of great pressure on those facilities, with no other warehouses available where the cargo could more easily have been stored.
The contract between TQST and Star Ship dated 3 March 2012 referred to the parties as "Party A" and "Party B" respectively. It provided for payment by Party B of (in addition to handling and transportation charges) storage charges of RMB 0.20 per wet metric ton per day for the first 30 days, with charges increasing to RMB 0.40 after 30 days, Rmb 0.60 after 90 days and Rmb 0.80 after 180 days. It provided (in translation) that if payment was not made when requested:
"… Party A is entitled to refuse cargo releasing and to liquidate or otherwise dispose of such goods freight, by which it may offset any overdue charges owe to Party A under this Agreement."
The contract also indicated that the bill of lading would be needed in order to clear the cargo through customs.
I accept the evidence of Mr Li Jie, the fleet manager of HTM Shipping the vessel's manager, that Star Ship concluded this contract with TQST under the defendant's direction and as its agent, so that the defendant has a contractual responsibility to TQST for the storage charges payable by Party B.
Discharge took place between 21.40 on 3 March (i.e. 7 hours and 40 minutes after tender of notice of readiness) and was completed by 11.15 on 5 March 2012, after which the vessel sailed. There was some confusion in the evidence as to precisely where the cargo was discharged, but the most probable explanation is that it was discharged to a temporary holding area at the port from where it was transported by truck into the TQST warehouse over the next days, this process being completed by 11 March 2012. Accordingly the TQST storage charges began to run from 12 March.
The claimant made no attempt to contact the vessel or its owner before arrival at Tianjin, despite knowing from 23 February 2012 onwards that the vessel had given an ETA of 29 February and that no bill of lading would be presented on arrival. Mr Khodabakhsh Amini, the principal shareholder of the claimant, said that the claimant did not have contact details for the defendant with which to do so, but I do not accept this. When it wanted to contact the defendant, the claimant obtained the necessary contact details from the agent at Bandar Abbas without difficulty. It could easily have done this at any time. It would have taken no more than a few days to courier the bill of lading to Tianjin if the claimant had wanted to do this.
The claimant's first contact with the master was by an email of 6 March 2012, by which time it must have known that the vessel had already arrived. The email stated:
"… Please kindly be notified that the buyer have not settled the proceed of this shipment to us as yet and hence the whole set of OB/L are resting with us waiting for buyer to pay us against the exchange of this document.
Trust you will take appropriate measures to prevent any inconvenience in future."
An email in the same terms was also sent at the same time to Shanghai Hengxin,...
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