Sub‐Bailments and Consent
| DOI | http://doi.org/10.1111/j.1468-2230.1995.tb02021.x |
| Date | 01 May 1995 |
| Published date | 01 May 1995 |
The
Modern
Law
Review
Sub-Bailments and Consent
Andrew
Phang*
[Vol.
58
Introduction and facts
Of the two major strands existing in the increasingly important topic of sub-
bailment on terms, one has become well settled, the other has been shrouded in
ambiguity for close to two decades. The recent Hong Kong Privy Council decision
of The Pioneer Container’ reaffirms the first strand and, more importantly,
delivers a definitive pronouncement on the second.
Briefly stated, the facts of The Pioneer Container were as follows. The plaintiffs
shipped goods on board the defendants’ vessel, which goods were lost when the
vessel sank after a collision. The plaintiffs commenced the present action, issuing a
writ
in
rem
against the defendants’ sister ship, claiming damages for loss of the
said goods. The defendants applied for a stay of proceedings on two grounds: first,
that by virtue of an exclusive jurisdiction clause in the relevant bills of lading, the
plaintiffs had agreed that any dispute would be governed by Chinese law and
determined at Taipei in Taiwan; secondly, that taking the circumstances as a
whole, Taipei was the natural and appropriate forum for the trial of the action. The
Board held in favour of the defendants, holding that the exclusive jurisdiction
clause was binding on the plaintiffs and that, on the facts, a stay of proceedings
ought to be granted. The present comment, focusing as it does on the bailment
context, will only consider the Board’s reasoning on the first issue.
Problems arose with regard to the first issue (viz, that centring on the effect of
the exclusive jurisdiction clause) because two groups of plaintiffs did not in fact
have a direct contractual relationship with the defendant shipowners; each group
had initially shipped the goods concerned on board vessels owned by different
companies which then (in effect) subcontracted the carriage of the goods to the
defendants. This raised the question as to whether the clause could in fact bind
these plaintiffs in the absence of a contractual nexus. It should be noted at this
juncture that although the instant case concerned the issue as to whether or not the
burden of an exclusive jurisdiction clause could be placed on a third party (here,
the plaintiffs), the reasoning of the Board would undoubtedly apply equally to the
effect of exception clauses in similar circumstances
.*
Another (more specific)
point should also be noted: in
so
far as each group of plaintiffs was concerned, the
bills of lading issued by the initial carriers each contained a similar clause as
follows: ‘The Carrier shall be entitled to sub-contract on any terms the whole or
any part of [the carriage].
’3
*Associate Professor, Faculty of Law, National University of Singapore.
1
[1994]
3
WLR
I,
[1994]
2 All
ER
250. For a note on the Court of Appeal decision (which was
unreported; though
see
the digested judgment in [1992] HKLY
73),
see
Swadling, ‘Sub-Bailment on
Terms’ [1993] LMCLO 9.
And see eg Phang, ‘Exception Clauses and Negligence: The Influence of Contract on Bailment and
Tort’ (1989) 9 OJLS 418.
2
3
Emphasis added.
422
0
The
Modern
Law
Review
Limited
1995
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