Sunrise Maritime Inc. v Uvisco Ltd ('The Hector') [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Rix J |
| Judgment Date | 16 March 1998 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 16 March 1998 |
Queen's Bench Division (Commercial Court).
Rix J.
Stephen Tomlinson QC and Robert Bright (instructed by Mishcon de Reya) for the owners.
Bernard Eder QC and Sara Cockerill (instructed by Ince & Co) for the sub-charterers.
The following cases were referred to in the judgment:
Berkshire, TheUNK [1974] 1 Ll Rep 185
Gouriet v Union of Post Office WorkersELR [1978] AC 435
MB Pyramid Sound NV v Briese-Schiffahrts GmbH & Co KG (“The Ines”) [1995] CLC 886
Nippon Yusen Kaisha v Ramjiban SerowgeeELR [1938] AC 429
Pyrene Co Ltd v Scindia Navigation Co LtdELR [1954] 2 QB 402
Rewia, TheUNK [1991] 2 Ll Rep 325
Samuel v West Hartlepool Steam Navigation CoUNK (1906) 11 Com Cas 115
Tillmanns & Co v SS Knutsford LtdELR [1908] 2 KB 385; [1908] AC 406
Venezuela, TheUNK [1980] 1 Ll Rep 393
Wehner v Dene Steam Shipping CoELR [1905] 2 KB 92
Wilston Steamship Company Ltd v Andrew Weir & CoUNK (1925) 22 Ll L Rep 521
Shipping — Bill of lading — Financial failure of time charterers before voyage commenced — Voyage subcharterers relied on freight prepaid bill of lading — Shipowner sought declaration that it had no obligation to make voyage — Whether bill of lading was owner's bill or charterer's bill — Whether bill authorised by owners.
This was an action by shipowners for a declaration that they were not obliged to carry a cargo of steel to Guatemala and that a bill of lading relating to the steel did not evidence a contract of carriage between the shipowners and the defendant sub-charterers.
The plaintiff owners, Sunrise, time chartered The Hector to US Express Lines (“USEL”) on amended NYPE terms. USEL subchartered her to the defendant, Uvisco, for a voyage on amended Gencon terms. The vessel loaded a cargo of steel for carriage from Russia to Guatemala. Uvisco and the buyers of the steel had paid freight to USEL but USEL failed to pay an instalment of hire to Sunrise and Sunrise withdrew the vessel from the time charter to USEL. Sunrise's port agents informed Sunrise that the port agents had not issued any bill of lading. The master had authorised the agents to sign bills in accordance with mate's receipts. The mate's receipt for the steel was claused in respect of the steel's condition. Uvisco produced a freight prepaid bill of lading. The bill of lading was dated before the completion of loading even though the bill was in “shipped” form. The bill was a Conlinebill containing a standard identity of carrier clause (cl. 17), but in a prominent position on its face appeared the typed words “Carrier: US Express Lines”. The bill was prepared by Uvisco on the authority of USEL. The bill was predated to conform with the letter of credit opened by the buyers of the steel in favour of Uvisco.
Sunrise took proceedings for a declaration that the bill of lading was not issued with its authority and did not evidence a contract of carriage between it and Uvisco and that the vessel was not obliged to go to Guatemala with the cargo.
The issues for the court were whether the bill of lading was an owner's bill or a charterer's bill and whether it was authorised by the owners.
Held declaring that the owners were not bound by the bill of lading and were not bound to carry the cargo to Guatemala:
1. The question whether the bill of lading was an owner's bill or a charterer's bill depended on the construction of the bill and the surrounding circumstances which might support or detract from that conclusion. (MB Pyramid Sound NV v Briese-Schiffahrts GmbH & Co KG (“The Ines”)[1995] CLC 886followed.)
2. As a matter of construction the bill of lading contract was with USEL not Sunrise. The bill was signed for and on behalf of the master (although not on terms authorised by the owners, because it was predated and not in conformity with the mate's receipt) and cl. 17 of the bill provided that the contract was with the owners, but against that the bill stipulated that the carrier was USEL. Although the master was the servant of the owners and cl. 17 said that the owners were the carriers, the only party identified expressly in the bill as the carrier was USEL. The rule was that a bill signed by or for the master would ordinarily be an owner's bill, not that it must be and USEL and Uvisco had brought into existence a charterer's bill. (The VenezuelaUNK[1980] 1 Ll Rep 393followed.)
3. USEL authorised the bill in the form it took knowing that it was not within owners” authority and was likely to make USEL privy to the bill as carrier. Uvisco also knew or knew that it was likely that the owners had not authorised the bill. USEL authorised the bill and USEL and Uvisco intended it to operate as a charterer's bill.
4. The owners did not authorise the bill: at its highest the authority given by the owners to USEL, its charterers or to the latter's agents to sign on the master's behalf was to sign a bill in conformity with the mate's receipt and the bill did not so conform since it did not reproduce the clausing of the receipt in respect of the steel or the date; being instead unclaused and predated (and thus fraudulent irrespective of the mate's receipt). There was no authority, actual, usual or ostensible, binding on the owners for the bill of lading relied on by Uvisco.
Rix J: This action arises out of the financial failure of time charterers at the very outset of a voyage for the carriage of a cargo of steel from Tuapse in Russia to Guatemala. The voyage sub-charterers and fob buyers of the steel have paid freight under their voyage charter to or for the account of the time charterers, and the owners of the vessel are concerned about the prospect of having to undertake the voyage without payment for it. Their vessel, the Hector, is still in the Black Sea. They have commenced this action as plaintiffs, to assert their claim that they have no obligation to go to Guatemala with the cargo. The defendants are the sub-charterers, who say that they are the holders of a freight prepaid bill of lading which obliges the vessel to complete the voyage. Neither the shippers, nor the time charterers, nor the ultimate contemplated receivers of the cargo in Guatemala are parties to the action, although they have, I am told, been informed about it.
This action has been brought to trial with great speed, as the dates I shall mention below will indicate, in the hope that it will elucidate the parties” rights or liabilities. Three main issues have been debated before me:
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(1) Is the bill of lading an owner's bill or a charterer's bill?
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(2) Was the bill of lading authorised by the owners?
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(3) Even in the absence of a valid bill authorised by the owners, is there nevertheless a contract of carriage in being, or at least in futuro, between the sub-charterers and the owners?
On 8 February 1998 the Hector completed loading a part cargo of 5,268.329 mt of rolled steel billets at Tuapse. The vessel had been chartered by her owners, Sunrise Maritime Inc of Liberia (“owners”), to US Express Lines of Pennsylvania, USA (“USEL”) under a time charter fixed on 21–22 January 1998. USEL in turn had sub-chartered her on 22–23 January 1998 to Uvisco Ltd, an English company (“Uvisco”). Neither charterparty has as yet been drawn up, but the time charter was fixed on amended NYPE terms, and the voyage sub-charter was fixed on amended Gencon terms.
Following loading, the vessel was delayed at Tuapse for reasons which are not entirely clear to me but which I suspect were connected with the fact that USEL were running short of funds and were unable for a while to clear the vessel for departure. On 11 February a further instalment of hire fell due and went unpaid. By 17 February USEL informed the owners that they were unable to complete the voyage due to cash flow problems. USEL invited the owners to speak to Uvisco (or their agents) direct. On 18 February the owners (i.e. Mr Edward Ross of Zodiac Maritime Agencies Ltd, their London managers: but I will short-circuit detail of that sort whenever possible and speak simply of owners, USEL, Uvisco etc.) spoke to Uvisco in an (unsuccessful) attempt to intercept any freight payments under the voyage charter. The owners also made enquiries of the Tuapse port agents, Kobos Shipping Agency (“Kobos”), as to the existence of any bill of lading, and were told that they, Kobos, had not signed or issued any. On 19 February owners withdrew the vessel from the time charter. The vessel sailed from Tuapse on the same day, but only to a nearby port to obtain bunkers.
Also on 19 February owners learned for the first time of the existence of a bill of lading: a copy of it had been faxed from Uvisco's solicitors, Ince & Co, to owners” solicitors, Mishcon de Reya, together with a copy of a fax dated 12 February from USEL to “Withersfield Attn: Chris Greengrass” stating that USEL were in receipt of freight and were authorising the release of the bill of lading. Other than that no information was forthcoming from Uvisco. The bill of lading was dated 5 February, three days before completion of loading on 8 February, even though the bill was in “shipped” form. The owners considered that the only party who had been authorised to issue a bill of lading on their behalf had been Kobos, under a letter of authority issued by the master to Kobos on completion of loading. On 23 February owners therefore commenced this action against Uvisco, claiming the following relief:
“1. A declaration that the bill of lading:
(1) is not a valid bill of lading; and/or
(2) was not issued with the authority of the plaintiff (whether actual, ostensible or customary authority or otherwise); and/or
(3) does not contain or evidence a contract of carriage between the plaintiff and the defendant; and/or
(4) does not otherwise bind or affect the rights and obligations of the plaintiff against the defendant.
2. A declaration that the plaintiff is not obliged or otherwise bound to the...
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