2,051
edits
Changes
From DMC
no edit summary
Case Note contributed by Sri Azali BB (Human Resource Management & Business Law), Paralegal at Penningtons Manches Cooper LLP Singapore.
'''Note: the judgment reported here has been appealedupheld on appeal. The appeal was heard A note on 13 January 2021 and the judgment decision of the Court of Appeal is awaitedhere [[https://www.onlinedmc.co.uk/index.php?title=Priminds_Shipping_v_Noble_Chartering_-_the_Tai_Prize]]'''
'''Background'''
The bill of lading which was presented for signature by or on behalf of the master of the vessel (“the Bill of Lading”) had been prepared by the shippers, acting as agents for Priminds. The Bill of Lading, which was on a standard GENCON 1994 form, incorporated the Hague Rules and described the cargo as being “clean on board” and “shipped at the Port of Loading in apparent good order and condition”. The Bill of Lading was signed as a clean bill by agents for and on behalf of the Master. The Bill of Lading was thus a contract between the shippers and the registered owners of the Vessel (the “Owners”).
During the unloading of cargo at the discharge port, receivers found that the cargo in two or the Vessel’s holds had suffered heat and mould damage. Receivers then commenced proceedings against the Owners in the PRC and were awarded the sum of US$1,086,564.70. Subsequently, the Owners shipowner commenced arbitration against Noble, claiming a 50% contribution to the sum paid to cargo receivers for the damage to cargo. In a negotiated settlement, Noble agreed to pay US$500,000 to the Owners in full and final settlement. In further arbitration proceedings, Noble then sought to be indemnified by Priminds for the amount paid to the Owners and the associated costs. There was no express provision in the Charterparty by which Noble was entitled to the indemnity.
The Arbitrator found that:
(v) Priminds was liable to Noble because the shippers, as Priminds’ agents (and hence Priminds) had impliedly warranted the accuracy of any statement as to condition contained in the Bill of Lading and/or had impliedly agreed to indemnify Noble against the consequences of the inaccuracy of any such statement on the basis that Priminds was liable for the consequences of the shippers’ acts.
Priminds appealed against the arbitral award to the High Court on the basis of the following three issues of law.
'''Judgment'''
1. Following the rule of law in The David Agmashenebeli [2003] 1 Lloyds Rep 92 per Colman J at 103 RHC, the judge held that, when the charterer or shipper on his behalf tenders a bill of lading for signature by the Master that contains a statement as to apparent condition in the same or similar terms to the wording in the Bill of Lading in this case, the charterer or shipper is inviting the Master to make a representation of fact as to the apparent condition of the goods on shipment.
Following a more recent case, The Saga Explorer [2012] EWHC 3124; [2013] 1 Lloyds Rep 401 per Simon J, the judge held that the representation of fact made by the Master becomes the carrier’s evidence of the apparent condition of the goods when placed aboard the ship. This evidence can then be relied on by the consignee and all subsequent holders of the bill of lading as reflecting the reasonable judgment of a reasonably competent and observant master.
Under Article III Rule 3 of the Hague Rules, the information to be included within a bill of lading to which the Rules apply was “the leading marks necessary for the identification of the goods as the same” and “the number of packages or pieces, or quantity or weight” both of which, clearly stated “as furnished in writing by the shipper”. Critically, the rule goes on to provide that the bill should also set out “the apparent order and condition of the goods” but did not state that this information was to be “as furnished in writing by the shipper”. It was therefore the Master’s task to verify the condition of the goods before he signs the B/L.
2. The Arbitrator had found that the damage to the cargo existed prior to shipment but was not reasonably visible to the Master or any agent of Priminds. In these circumstances, the Judge found that the representation of fact by the Master as to the apparent condition of the cargo was not inaccurate. 3. The Judge noted that Article III Rule 5 of the Hague Rules imposed an express indemnity obligation on the shipper in respect of the information that he “furnishes in writing” but not in relation to statements regarding “the apparent order and condition of the goods”. This was a clear distinction and therefore, there was no room for the implication of an implied guarantee or warranty as a result of any inaccuracy of those statements.
'''Comment'''
