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Nature of Bill of Lading – Evidence to vary Terms of Contract of carriage contained in Bill of Lading – The Ordinary Sea Track of a Voyage from Fiume to Dunkirk – Description of the Voyage – ‘Liberty to Call’ Clause – Deviation.

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Cases referring to this case:

Tradigrain SA & Ors v King Diamond Marine Ltd (The Spiros C) [2000] EWCA Civ 217


Leduc & Co v Ward (1888) 20 QBD 475


The plaintiffs purchased the goods which were to be shipped from the port of Fiume (now known as Rijeka in Croatia) to Dunkirk. The bill of lading, which contained the usual exception of sea perils, stated as far as material that the goods:

Shipped in apparent good order and condition on the steamship Austria, now lying in the port of Fiume, and bound for Dunkirk, with liberty to call at any ports in any order, and to deviate for the purpose of saving  life or property; 3123 bags of rape seed, being marked and numbered as per margin, and to be delivered in the like good order and condition at the aforesaid port of Dunkirk unto order or assigns.

Payment of the price was to be made in exchange for shipping documents. The bill of lading duly signed upon the shipment of the goods was, upon payment of the price by the plaintiffs, was indorsed to them. The ship, instead of proceeding direct for Dunkirk, sailed for Glasgow (about 1200 miles out of the ordinary course of the voyage), and was lost, with her cargo, off the mouth of the Clyde, by perils of the sea.  The plaintiffs brought an action against the shipowners for non-delivery of the goods. The shipowners argued that there was no deviation because the evidence showed the shippers knew of and agreed to the voyage being via Glasgow. They further contented that this evidence, otherwise not admissible when the contract had been reduced to writing, did not contradict the bill of lading because of the nature of bill of lading being not a contract but a receipt for the goods and signifies only an undertaking to deliver them at the port of discharge. The natural meaning of the words, the shipowners suggested, may even go the length of saying that the ship may call in any port in the world.


Court of Appeal. Lord Esher, M.R., Fry and Lopes, L.JJ., 1888 Feb. 11, 13.

Lord Esher, M.R.

It  is true that,  where there  is a  charterparty,  as  between the shipowner and the charterer the bill of lading may be merely in the nature of a receipt for goods, because all the other terms of the contract of carriage between them are contained in the charterparty;  and the bill of lading  is merely given as between them to enable the charterer to deal with the goods while in the course of transit; but, where the bill of lading indorsed  over,  as  between  the  shipowner and  the  indorsee, the  bill  of lading   must  be considered to contain the contract,  because the former has given  it for the purpose of enabling the charterer to pass it on as the contract of carriage in respect of the goods. When there is no charterparty, as between the grantee of the bill of lading and the shipowner, the bill of lading is no doubt a receipt for the goods, and as such, like any other receipt, it is not conclusive, for it may be controverted by evidence shewing that the goods were not received. But the question whether it will be more than a receipt as between the shipper and shipowner depends on whether the captain has received the goods, for he has no authority to make contract of carriage to bind the shipowner, except in respect of goods received by him. If the goods have not been received, the bill of lading cannot contain the terms of a contract o carriage with respect to them as against the shipowner. But, if the goods have been received by the captain, it is the evidence in writing of what the contract of carriage between the parties is;

… it may be true that the contract of carriage is made before it is given, because it would generally be made before the goods are sent down to the ship: but when the goods are put on board the captain has authority to reduce that contract into writing: and then the general doctrine of law is applicable, by which, where the contract has been reduced into a writing which is intended to constitute the contract, parol  evidence to alter or qualify the effect of such  writing  is not admissible, and the writing is the only evidence of the contract, except where there is some usage so well established and generally known that it must be taken to be incorporated with the contract.

Those terms appear to me to describe a voyage, and, such being the description of the voyage, what is the true effect of the document with regard to the voyage so described? A bill of lading common mercantile document, which has been used for hundreds of years, and I think business men and Courts of Law have always interpreted it in one way, namely, that, if the only voyage mentioned is from the port of shipment to the port of destination, it must be voyage on the ordinary track by sea of the voyage from the one place to the other. So here, if the description of the voyage had been merely from Fiume to Dunkirk, I think the contract would have been for a voyage on the ordinary sea track of a voyage from Fiume to Dunkirk, and any departure from that track in the absence of necessity would be a deviation. Of course when I speak of the ordinary sea track I do not mean an exact line, for it would necessarily vary  somewhat  according  to  circumstances;   the  ordinary  track for  sailing   vessels  would according to the wind; the ordinary track for a steamer, again, might be different from that for a  sailing  vessel;   I  mean  the  ordinary track of such  a  voyage  according  to  a   reasonable construction of the term. In the present case liberty is given to call at any ports in any order.

It was argued that that clause gives liberty to call at any port in the world. Here, again, it is a question of the construction of a mercantile expression used in a mercantile document, and I think that as such the term can have but one meaning, namely, that the  ports,  liberty to call  at which  is  intended  to  be  given,  must  be  ports  which  a substantially ports which will be passed on the named voyage.

To "call" at a  port is a well-know sea-term; it means to call for the purposes of business, generally to take in or unload cargo, or to receive orders; it must mean that the vessel may stop at the port of call for a time, or else the liberty to call would be idle. I believe the term has always been interpreted to mean that the ship may call at such ports as would naturally and usually be ports of call on the voyage named.

If the  stipulation  were  only  that  she   might  call   at  any  ports,  the   invariable construction   has   been  that  she  would   only  be  entitled  to  call   at  such   ports   in  their geographical order; and therefore the words "in any order" are frequently added, but in any case it appears to me that the ports must be ports substantially on the course of the voyage. It follows that, when the defendants’ ship went off the ordinary track of a voyage from Fiume to Dunkirk to a port not on the course of that voyage, such as Glasgow, there was a deviation, and she was then on a voyage different from that contracted for to which the excepted perils clause did not apply; and therefore the shipowners are responsible for the loss of the goods.


Comments

Per Rix LJ in Tradigrain SA & Ors v King Diamond Marine Ltd (The Spiros C) [2000] EWCA Civ 217 at para 29:

It is for Lord Justice Fry’s ratio that the case has become known as authority that the consignee of a bill of lading is not affected by any parol understanding between shipper and shipowner: see The Ardennes [1951] 1 KB 55 at 60 per Lord Goddard LCJ. None of that, however, means that there is anything to prevent a shipper and shipowner varying their contract in any way in which contracts may be varied, even if such variation may not affect a consignee. .

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