The Hollandia (Haico Holwerde, Morviken)
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,SIR SEBAG SHAW,LORD JUSTICE ACKNER |
| Judgment Date | 13 January 1982 |
| Judgment citation (vLex) | [1982] EWCA Civ J0113-5 |
| Docket Number | 82/0010 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 January 1982 |
[1982] EWCA Civ J0113-5
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
ADMIRALTY COURT
(MR. JUSTICE SHEEN)
Royal Courts of Justice.
The Master of the Rolls
(Lord Denning)
Lord Justice Ackner
and
Sir Sebag Shaw
82/0010
MR. JOHN HOBHOUSE, Q.C. and MR. MICHAEL DEAN, Q.C. (instructed by Messrs. Clyde & Co.) appeared on behalf of the Appellants.
MR. JOHAN STEYN, Q.C. and MR. ANGUS GLENNIE (instructed by Messrs. Middleton Lewis Lawrence Graham) appeared on behalf of the Respondents.
In March 1978 an English company shipped at Leith in Scotland a big machine for use in road work. It was for carriage to the island of Bonaire in the Dutch West Indies. It was loaded on a Dutch vessel, the "Haico Holwerda", for carriage to Amsterdam. It was then transhipped on to a Norwegian vessel, the "Morviken", for carriage to Bonaire. As it was being discharged at Bonaire, it was dropped from a height of about four feet on to the quay and severely damaged. The amount is put at about £22,000. The English cargo owners claim damages against the Dutch carriers who issued the bill of lading and owned the "Haico Holwerda". Later on, a ship belonging to the same owners, called the "Hollandia", put into a U.K. port. On the 26th February, 1980 the cargo owners arrested the "Hollandia" in rem and sued the owners for damages. She was released and the action proceeded as a straight action in personam by the cargo owners against the carriers.
Now the Dutch carriers have applied to the court for the action to be stayed. They do so because there is a clause in the bill of lading which says it is governed by Dutch law and that any action is to be brought in the courts of Amsterdam.
Now there is this important difference between the courts of this country and the courts of Amsterdam. The courts here apply the Carriage of Goods by Sea Act 1971. Under it the limit of liability for this machine is £11,490.96: whereas the courts of Amsterdam apply the old Hague Rules under which the limit of liability for this machine is about £250. If this action were stayed and the cargo owners were forced to sue in the courts of Amsterdam, it would not be worth their while. £250 would not go anywhere.
The judge has, however, ordered a stay. He says that the cargo owners are bound by that clause in the bill of lading and cannot sue here. The carriers' reply is that under the law in force in England that clause is null and void.
The clause in the bill of lading
The bill of lading contained a clause (clause 2) which specified the proper law of the contract:
"The law of the Netherlands in which the Hague Rules, as adopted by the Brussels Convention of 25th August 1924, are incorporated—with the exception of article 9—shall apply to this contract. The maximum liability per package is D.f1. 1250…"
And also contained this exclusive jurisdiction promise:
"All actions under the present contract of carriage shall be brought before the court of Amsterdam and no other court shall have jurisdiction with regard to any such action…"
I would add that the Hague Rules, as incorporated in Holland, contained article 10:
"The provisions of this convention shall apply to all bills of lading issued in any of the contracting States".
If this present case had arisen before the 1971 Act came into force, it is plain that the English courts would have given effect to that clause in the bill of lading. Although the port of shipment was in the United Kingdom, it was open to the Dutch carriers to stipulate that the bill of lading was governed by Dutch law and that exclusive jurisdiction should be given to the courts of Amsterdam.
But this case arose under the 1971 Act. What is its effect?
Legislative policy
To deal with the problem, I must sketch the policy behind the legislation.
Up till 1921 ship owners were in a strong position vis-à-vis the cargo owners. They could issue bills of lading with all sorts of exceptions and limitations: and these were binding not only on the shippers but also on consignees, bankers, insurers and others who had not been parties to the original contract and had no control over it. This was most unsatisfactory. In the interests of international trade, it was very desirable that all international carriage of goods should be subject to the same terms and conditions. In an effort to get uniformity, there was a conference at The Hague which agreed on the "Hague Rules". They were implemented in the United Kingdom by the Carriage of Goods by Sea Act 1924. Over the next 45 years these were found to be defective. They were amended by a Protocol in 1968 called the "Hague-Visby Rules". They were implemented in England by the Carriage of Goods by Sea Act 1971. It came into force on the 23rd June, 1977. But the Hague-Visby Rules have not yet been implemented in Holland. The Dutch stick to the old Hague Rules. They may soon implement the Hague-Visby Rules, but there seems to be some delay over it.
The old Hague Rules
Most of the countries in the world gave effect to the old Hague Rules. But in a very limited form. In many countries the rules were applied only to outward shipments. Thus with us the Carriage of Goods by Sea Act 1924 only applied to shipments from a port in the United Kingdom. This gave rise to this odd result. Suppose a ship flying the Norwegian flag sails from an English port to a destination in Norway. The Norwegian owner issues a bill of lading expressed to be subject to Norwegian law. That stipulation was perfectly valid. If the goods were damaged in transit and the goods owner sued the Norwegian owner in England, the Hague Rules would not apply at all for this reason: that Norwegian law would not apply because the shipment was not from a port in Norway. The English law would not apply because the parties had stipulated for Norwegian law. This meant that it was quite possible, as Lord Justice Scrutton said, for every shipowner to defeat the convention and the whole system under it by simply putting in a clause:
"This bill of lading is to be construed by the law, not of the place where it is made, but by the law of the place to which the ship is going", see The Torni (1932) Probate 78 at page 84.
I may add that Lord Justice Scrutton with his robust common-sense would not have allowed them to "upset the whole applecart" in this way. But the Privy Council would and did upset it by what they said in the Vita Food case (1939) Appeal Cases 277 and by the Court of Appeal in Ocean S.S. v. Queensland State Wheat Board (1941) 1 King's Bench 402—both of which have been torn to pieces by Dr. J.H.C. Morris in (1946) 62 Law Quarterly Review at page 177, and in (1979) 95 Law Quarterly Review at page 59.
The 1971 Act made far-reaching reforms. It brought in important new features. I will take them in order.
Section 1(2)—"The force of law"
Section 1(2) said that: "The provisions of the Rules, as set out in the Schedule to this Act, shall have the force of law".
What does this mean? In my opinion it means that, in all courts of the United Kingdom, the provisions of the rules are to be given the coercive force of law. So much so that, in every case properly brought before the courts of the United Kingdom, the rules are to be given supremacy over every other provision of the bill of lading. If there is anything elsewhere in the bill of lading which is inconsistent with the rules or which derogates from the effect of them, it is to be rejected. There is to be no contracting-out of the rules. Notwithstanding any clause in the bill of lading to the contrary, the provisions of the rules are to be paramount. A parallel is to be found in Community law. Whenever there is a conflict or inconsistency between the law contained in any article of the Treaty and the law contained in the internal law of the member state, the law of the Community prevails, see Shields v. E. Coombes (1978) 1 Weekly Law Reports 1408 at page 1414; McCarthys v. Smith (1980) 3 Weekly Law Reports 929 at page 938; Worringham v. Lloyds Bank (1981) 1 Weekly Law Reports 950. So here, whenever there is any inconsistency between the terms of the bill of lading and the rules, then the rules prevail.
Article X—"To every bill of lading…whatever"
Article X of the rules gives far wider jurisdiction to the courts of the United Kingdom than did the 1924 Act. Whereas the 1924 Act was confined by section 2 to outward shipments from ports in the United Kingdom, now Article X says that:
"The provisions of these Rules shall apply to every bill of lading relating to the carriage of goods between ports in two different States if:
(a) the bill of lading is issued in a contracting State, or
(b) the carriage is from a port in a contracting State, or
(c) the contract contained in or evidenced by the bill of lading provided that these Rules or legislation of any State giving effect to them are to govern the contract,
whatever may be the nationality of the ship, the carrier, the shipper, the consignee, or any other interested person".
Take that very Article and apply it to the bill of lading in this present case. It means that the provisions of the rules are to apply to this very bill of lading: because the carriage is from Leith, a port in the United Kingdom. It is to apply whatever may be the nationality of the ship—be it the Dutch "Haico Holwerda" or the Norwegian "Morviken"—the carrier be he Dutch or Norwegian—the...
To continue reading
Request your trial
- Akai Pty Ltd v the Peoples' Insurance Company Ltd
-
Homburg Houtimport BV v Agrosin Private Ltd (Starsin)
... ... Schedule to this Act shall have the force of law." (See also The Hollandia [1983] 1 AC 565 at 572, per Lord Diplock.) Secondly, in a new Article 4 ... ...
-
Parsons Corporation v C v Scheepvaartonderneming Happy Ranger
... ... in article X their own code for their application: see The Hollandia [1983] 1 AC 565 at 577E/G per Lord Diplock. Article X(b) is that part of ... ...
- Deep Vein Thrombosis and Air Travel Group Litigation; Re