Services Europe Atlantique Sud (SEAS) v Stockholms Rederiaktiebolag Svea (Folias)
| Jurisdiction | UK Non-devolved |
| Judge | Lord Wilberforce,Lord Diplock,Lord Salmon,Lord Russell of Killowen,Lord Keith of Kinkel |
| Judgment Date | 19 October 1978 |
| Judgment citation (vLex) | [1978] UKHL J1019-2 |
| Date | 19 October 1978 |
| Court | House of Lords |
[1978] UKHL J1019-2
Lord Wilberforce
Lord Diplock
Lord Salmon
Lord Russell of Killowen
Lord Keith of Kinkel
House of Lords
Upon Report from the Appellate Committee to whom was referred the Cause Services Europe Atlantique Sud (SEAS) of Paris against Stockholms Rederiaktiebolag Svea of Stockholm, That the Committee had heard Counsel as well on Monday the 17th as on Tuesday the 18th, Wednesday the 19th and Thursday the 20th days of July last upon the Petition and Appeal of Stockholms Rederiaktiebolag Svea of Stockholm whose registered office is situate at P.O. Box 2065 103 12 Stockholm 2 Sweden and c/o William A. Crump & Son of 9 St. Helen's Place, London EC3A 6AE praying that the matter of the Order set forth in the Schedule thereto, namely an Order of Her Majesty's Court of Appeal of the 22nd day of February 1978 might be reviewed before Her Majesty the Queen in Her Court of Parliament and that the said Order might be reversed, varied or altered or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament might seem meet; as also upon the Case of Services Europe Atlantique Sud (SEAS) of Paris lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause;
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal of the 22nd day of February 1978 complained of in the said Appeal be, and the same is hereby, Affirmed and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay or cause to be paid to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments if not agreed between the parties.
My Lords,
In Miliangos v. George Frank (Textiles) Ltd. [1976] A.C. 443, this House decided that a plaintiff suing for a debt payable in Swiss francs under a contract governed by Swiss law could claim and recover judgment in this country in Swiss francs. Whether the same, or a similar, rule could be applied to cases where (i) a plaintiff sues for damages in tort, or (ii) a plaintiff sues for damages for breach of contract, were questions expressly left open for later decision. These questions were regulated before Miliangos as to tort by the S.S. Celia (Owners) v. S.S. Volturno (Owners) [1921] 2 A.C. 544 (" The Volturno") and as to contract by Di Ferdinando v. Simon, Smits & Co. Ltd. [1920] 3 K.B. 409, which decided that judgment in an English court could only be given in sterling converted from any foreign currency as at the date of the wrong. Now these questions are directly raised in the present appeals in each of which your Lordships have the advantage of judgments of the Court of Appeal and of judgments of high quality at first instance. These enable the House, as it could not have done in Miliangos, to consider some of the problems which may exist in the varied cases of torts and breaches of contract.
I. OWNERS OF M.V. "ELEFTHEROTRIA" (Respondents)
v.
OWNERS OF M.V. "DESPINA R." (Appellants)
These are two Greek vessels which collided in April 1974 off Shanghai. On 7 July 1976 a settlement was arrived at under which it was agreed that the appellants should pay to the respondents 85 per cent of the loss and damage caused to the respondents by the collision. This is therefore a tort case based upon negligence.
After the collision Eleftherotria was taken to Shanghai where temporary repairs were carried out. She then went to Yokohama for permanent repairs, but it turned out that these could not be carried out for some time. She was therefore ordered to Los Angeles, California, U.S.A., for permanent repairs. Expenses were incurred under various headings (particularised in the judgment of Brandon J.) in foreign currencies, namely, renmimbi yuan ("R.M.B."), Japanese yen, U.S. dollars, and as to a small amount in sterling. The owners of the ship are a Liberian Company with head office in Piraeus (Greece). She was managed by managing agents with their principal place of business in the State of New York, U.S.A. The bank account used for all payments in and out on behalf of the respondents in respect of the ship was a U.S. dollar account in New York—so all the expenses incurred in the foreign currencies other than U.S. dollars were met by transferring U.S. dollars from this account. The expenses incurred in U.S. dollars were met directly by payment in that currency from New York.
The judge ordered that the following questions be tried separately, namely: ( a) whether, where the plaintiffs have suffered damage or sustained loss in a currency other than sterling, they are entitled to recover damages in respect of such damage or loss expressed in such other currency, ( b) if, in such a case, the plaintiffs are only entitled to recover damages expressed in sterling, at what date the conversion into sterling should be made. Under question ( a) there are two alternatives. The first is to take the currency in which the expense or loss was immediately sustained. This I shall call "the expenditure currency". The second is to take the currency in which the loss was effectively felt or borne by the plaintiff, having regard to the currency in which he generally operates or with which he has the closest connection—this I shall call "the plaintiff's currency". These two solutions have to be considered side by side with the third possible solution, namely, the sterling solution, taken at the date when the loss occurred (applying The Volturno) or at some other date.
I consider first The Volturno. Although, as in this case, there had been expenses for repairs incurred in foreign currency, these were not in issue on the appeal. That was only concerned with a claim for damages in respect of detention which was assessed in Italian lire. It was thought to be clear at that time that an English court could only give judgment for a sum in sterling, and it is this which formed the basis of the decision arrived at, namely, that conversion must be made at the date of the breach and not at the date of judgment. This most clearly appears in the speech of Lord Sumner. He states (p. 558) the argument in favour of conversion at the date of judgment—the creditor in that event would get the exact sum to which he was entitled. This would inevitably, he says, introduce a speculative element into all transactions—waiting to convert the currency until the date of judgment only adds the uncertainty of exchange to the uncertainty of the law's delays. There is no answer to this, he continues, except that the claimant's right is exclusively a right to lire and would result in a judgment for lire, if only an English court was, so to speak, competent to express itself in Italian. Earlier he had described the agreed numbers of lire as only part of the foreign language in which the court is informed of the damage sustained, which, like the rest of the foreign evidence, must be translated into English as at the date when the damage accrues.
The whole of this process of argument flows from the accepted inability of the court to receive a claim in lire and to give judgment in lire. The same point underlies just as clearly the opinion of Lord Parmoor—"the necessity for transferring into English money damages ascertained in a foreign currency arises in the fact that the Courts of this country have no jurisdiction to order payment of money except in English currency" (p. 560). The contrary view—based firmly on the principle of restitutio ad integrum—is clearly stated by Lord Carson (pp. 566-7).
My Lords, I do not think that there can now be any doubt that, given the ability of an English court (and of arbitrators sitting in this country) to give judgment or to make an award in a foreign currency, to give a judgment in the currency in which the loss was sustained produces a juster result than one which fixes the plaintiff with a sum in sterling taken at the date of the breach or of the loss. I need not expand upon this because the point has been clearly made both in Miliangos, and in cases which have followed it, as well as in commentators who, prior to Miliangos, advocated abandonment of the breach-date-sterling rule. To fix such a plaintiff with sterling commits him to the risk of changes in the value of a currency with which he has no connection: to award him a sum in the currency of the expenditure or loss, or that in which he bears the expenditure or loss, gives him exactly what he has lost and commits him only to the risk of changes in the value of that currency, or those currencies, which are either his currency or those which he has chosen to use.
I shall consider the objections against the use of that currency or those currencies, but first it is necessary to decide between the expenditure currency and the plaintiff's currency—a matter which gave the judges below some difficulty. Brandon J. would have preferred adoption of the plaintiff's currency but he considered himself prevented from doing so by The Canadian Transport 43 L1 L.Rep.409, a collision case decided by a strong Court of Appeal. There the loss was originally suffered in Argentinian pesos but a claim was made which involved converting pesos into sterling, sterling into francs at one rate and francs into sterling at another rate, thus producing an exchange profit for the cargo owners. The decision of the Court of Appeal, against the...
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