The English High Court issued a Judgment on 31/7/2015 dismissing a cargo owner’s conversion claim US $565,891.58 against a shipowner in an uncollected cargo case. [(2015) EWHC 2288 (Comm), (2015) 2 C.L.C. 415]
Introduction
This was a claim for the conversion of a cargo of iron ore carried from Bandar Abbas in Iran to Tianjin in China on board the vessel “Bao Yue” in February and March 2012 and a counterclaim for storage charges incurred on the cargo. No bill of lading was presented at the discharge port so the cargo was discharged into storage at Tianjin. The storage charges due as a result eventually exceeded the value of the cargo which had been there ever since. The warehouse company wanted to be paid before it would release the cargo. The bill of lading holder (“the claimant”) contended that the shipowner converted the cargo. The claimant accepted that the shipowner was entitled to discharge the cargo into storage, but contended that the shipowner nevertheless converted it because (a) without the claimant’s express or implied authority, a lien for storage charges was created in favour of the warehouse company, and (b) statements were made by the warehouse company and the vessel’s agent which amounted to denying the claimant access to the cargo regardless of whether it presented the bill of lading. The shipowner denied having converted the cargo and contended that the claimant was responsible for the storage charges.
The facts
The claimant, an Iranian company, was the shipper of the cargo, 35,376.611 metric tons of iron ore. The shipowner was the contractual carrier and issued a bill of lading dated 4 February 2012 to the claimant as the shipper. The bill was issued “to order”, with no named consignee or notify party, on the Congenbill 1994 form. It incorporated “all terms and conditions, liberties and exceptions of the Charter Party, dated as overleaf”, although no such charterparty was identified on the face of the bill. It was common ground, nevertheless, that this was effective to incorporate the terms of the applicable voyage charter. The charterparty chain was as follows:
a. The shipowner time-chartered the vessel to Shanghai Hengxin under a time charter dated 18 March 2011. b. Shanghai Hengxin voyage-chartered the vessel to a company called Ocean Mine by a fixture dated 7 December 2011. c. Ocean Mine further voyage-chartered the vessel, on back-to-back terms, to Qisheng Resources also by a fixture dated 7 December 2011. Qisheng Resources was part of a group of companies known as the Qisheng Group.
As the two voyage charters were on back-to-back terms, it was unnecessary to consider which of them was incorporated into the bill of lading. They each contained the following clause 12:
“Congen bill 94 to be used. In case original Bs/L would not be ready upon vessel’s arrival at discharge port, Owners allow to discharge cargo upon arrival to custom bonded warehouse area against Charterer’s single LOI with Owners P&I Club wording signed by Chrs. Release cgo agnst original bill of lading. In the event cargo being kept in the warehouse in lieu of waiting for OBL to arrive at the discharge port, the expense of warehouse and all relevant costs to be for Chrtrs’ account. …”
The cargo was sold on FOB terms under an agreement between the claimant as seller and a Chinese company, Teda, another company in the Qisheng Group, as buyer. The bill of lading was not available at the discharge port on the vessel’s arrival. Arrangements were therefore made for the discharge of the cargo pursuant to letters of indemnity in standard form given by each charterer in the chartering chain. The letter of indemnity requested the shipowner to discharge (not deliver) the cargo to the agent at Tianjin, Star Ship, who was to deliver/release the cargo against presentation of the original bill of lading. Accordingly Star Ship arranged for discharge of the cargo into a warehouse operated by Tianjin QS Storage & Transportation Co Ltd (“TQST”).
The contract between TQST and Star Ship dated 3 March 2012 referred to the parties as “Party A” and “Party B” respectively. It provided that if payment was not made when requested:
“… Party A is entitled to refuse cargo releasing and to liquidate or otherwise dispose of such goods freight, by which it may offset any overdue charges owe to Party A under this Agreement.”
Star Ship concluded this contract with TQST under the shipowner’s direction and as its agent, so that the shipowner had a contractual responsibility to TQST for the storage charges payable by Party B.
The claimant’s first contact with the master was by an email of 6 March 2012, by which time it must have known that the vessel had already arrived. The email stated:
“… Please kindly be notified that the buyer have not settled the proceed of this shipment to us as yet and hence the whole set of OB/L are resting with us waiting for buyer to pay us against the exchange of this document. Trust you will take appropriate measures to prevent any inconvenience in future.”
The claimant understood perfectly well that if the cargo was discharged into storage, charges would be incurred which would have to be paid by the person who claimed the cargo. The claimant understood also that the warehouse would insist on payment of its charges before the cargo could be removed. The master did not reply to the claimant’s email.
Teda’s reaction to this situation was to ask once again on 8 March 2012 for the original bill of lading to be sent to it. It added that if the claimant was planning to sell the cargo to someone else, the payments which it had made for the cargo and the freight cost should first be refunded to it. The claimant responded that it was holding the bill of lading against payment of the outstanding US $565,891.58 and that if this was not paid it would have no choice but to sell the cargo to another buyer.
The claimant tried to sell the cargo to another buyer, but without success. The claimant had no further contact with Teda. It never made contact with TQST, either to ask for delivery of the cargo or even to inspect it. The bill of lading remained in its safe. Meanwhile the cargo had remained at TQST. Teda also had not attempted to remove the cargo from storage at TQST, despite the fact that it had paid some US $1.5 million to bring the cargo from Iran to China which the claimant evidently had no intention of refunding.
Nor did the claimant have any further contact with the shipowner or with Star Ship. It did not protest that the cargo should not have been discharged to storage at TQST. It did not inquire about the storage terms. It did not even ask to be told anything about the location of the cargo. It remained silent until 19 January 2013 when, without prior warning, it arrested the vessel in India in support of a claim for misdelivery of the cargo to Teda without production of the bill of lading. The vessel’s manager, HTM Shipping, pointed out that the cargo was still at the warehouse and asked the claimant to advise what it wanted to do with it. The claimant did not respond to this request. Security for the claim was provided in order to obtain the release of the vessel and it was agreed that the English court would have jurisdiction over the claim.
On 30 August 2013 the shipowner wrote to the claimant to say that the cargo was still in storage at Tianjin and invited it to take delivery by surrendering the bill of lading to Star Ship. On 2 September 2013 Star Ship wrote in similar terms, pointing out that outstanding charges in connection with the cargo would need to be resolved. However, the claimant still made no attempt to take delivery of the cargo.
The claim for conversion
The claimant advanced its claim on two bases.
First, the claimant submitted that the shipowner discharged the cargo into storage in circumstances where storage charges would accrue, for which the warehouse owner would have a lien, and that the creation of this lien constituted a conversion of the cargo. The claimant made clear in the course of argument that (a) the shipowner was entitled and authorised to discharge the cargo into storage in circumstances where no bill of lading was available at the discharge port, (b) the bill of lading holder would be liable to reimburse the shipowner for reasonable storage charges in such a case, and (c) it was not suggested that TQST’s charges were unreasonable or that any more favourable charges could have been obtained by storing the cargo elsewhere. The claimant’s narrow submission was that the shipowner was not entitled without the express or implied authority of the bill of lading holder to arrange for storage of the cargo in a way which gave rise to a lien in favour of the warehouse owner for its charges and that no such authority existed in the case in question.
A second way of putting the case was developed in the claimant’s skeleton argument. The case advanced was that TQST and Star Ship, to whom the shipowner had delegated the care of the cargo and for whose conduct it was responsible, denied the claimant access to or possession of the cargo, and that this constituted a conversion by the shipowner. The conduct relied upon as constituting a denial of access consisted of: (a) the statement made by Teda as reported on 12 March 2012 that “if you would sell the B/L, he would be definitely capable to keep the buyer of the B/L from acquiring the cargo”, (b) Star Ship’s failure to provide information as to the whereabouts of the cargo in the telephone conversation of 18 March 2012 with the claimant, and (c) Teda’s statement to the claimant, also on 18 March 2012, that “the cargo is ours and we have already cleared it from customs”.
Conversion in general
It was not disputed that the shipowner, as a bailee of the cargo, was under a duty not to convert it.
Lord Nicholls described the basic features of the tort of conversion in Kuwait Airways Corpn v Iraqi Airways Co (Nos 4 and 5) [2002] UKHL 19, [2002] 2 AC 883 , at [38] to [41]:
“38. … Denial of title is not of itself conversion: see section 11(3) of the Torts (Interference with Goods) Act 1977 . To constitute conversion there must be a concomitant deprivation of use and possession. In support of this submission Mr Donaldson fastened upon a statement in Clerk & Lindsell on Torts , 17th ed (1995), p 636, paragraph 13-12:
‘conversion is an act of deliberate dealing with a chattel in a manner inconsistent with another’s right whereby that other is deprived of the use and possession of it .’
A similar passage appears in Salmond and Heuston on the Law of Torts , 21st ed (1996), pages 97–98. In the present case, it was said, none of the acts of IAC deprived KAC of use or possession of the aircraft. Some of IAC’s acts were entirely abstract, such as applying for certificates of airworthiness. Even the physical acts, such as repainting or flying the aircraft, had no impact on KAC’s possession. In my view this line of argument was misconceived. I need not repeat the journey through the textbooks and authorities on which your Lordships were taken. Conversion of goods can occur in so many different circumstances that framing a precise definition of universal application is well nigh impossible. In general, the basic features of the tort are threefold. First, the defendant’s conduct was inconsistent with the rights of the owner (or other person entitled to possession). Second, the conduct was deliberate, not accidental. Third, the conduct was so extensive an encroachment on the rights of the owner as to exclude him from use and possession of the goods. The contrast is with lesser acts of interference. If these cause damage they may give rise to claims for trespass or in negligence, but they do not constitute conversion. The judicially approved description of the tort in Clerk and Lindsell encapsulates, in different language, these basic ingredients. The flaw in IAC’s argument lies in its failure to appreciate what is meant in this context by ‘depriving’ the owner of possession. This is not to be understood as meaning that the wrongdoer must himself actually take the goods from the possession of the owner. This will often be the case, but not always. It is not so in a case of successive conversions. For the purposes of this tort an owner is equally deprived of possession when he is excluded from possession, or possession is withheld from him by the wrongdoer.
Whether the owner is excluded from possession may sometimes depend upon whether the wrongdoer exercised dominion over the goods. Then the intention with which acts were done may be material. The ferryman who turned the plaintiff’s horses off the Birkenhead to Liverpool ferry was guilty of conversion if he intended to exercise dominion over them, but not otherwise: see Fouldes v Willoughby (1841) 8 M & W 540.”
The judicially approved description in Clerk & Lindsell to which Lord Nicholls referred, now contained in the 20th Edition at paragraph 17-07, is that “conversion is an act of deliberate dealing with a chattel in a manner inconsistent with another’s right whereby that other is deprived of the use and possession of it”. Paragraph 17-08 lists the principal ways in which a conversion may take place as follows:
“It is not possible to categorise exhaustively all modes of conversion for while some acts are necessarily an absolute abrogation of the claimant’s rights and deprive him of the whole value of his interest in the goods, there may be others where the courts retain a degree of discretion in deciding whether those acts amount to a sufficient deprivation. Nevertheless the principal ways in which a conversion may take place can be set out under the following headings, dealt with more fully below: (a) when property is wrongfully taken or received by someone not entitled to do so; (b) when it is wrongfully parted with; (c) when it is lost by a bailee in breach of his duty to the bailor; (d) when it is wrongfully sold, even without delivery, so as to pass good title to the buyer; (e) when it is wrongfully retained; (f) when it is wrongfully misused or destroyed; and (g) when the defendant, without physically interfering with it, wrongfully denies access to it to the claimant.”
Conversion by creation of a lien
The Judge would accept in principle that goods may be converted by a person who creates a lien without the authority of the owner. As long ago as 1791, Buller J said that:
“If a person take my horse to ride and leave him at an inn that is a conversion; for though I may have the horse on sending for him and paying for the keeping of him, yet it brings a charge on me.”
That example is taken from the case of Syeds v Hay (1791) 4 Term Reports 260 , where the owner of goods on board a vessel had directed the master not to ground the goods on the wharf against which the vessel was moored and the master agreed not to do so. Contrary to that promise, however, the captain grounded the goods, delivering them to a wharfinger who was to have a lien over the goods for the wharfage fees. This was held to be a conversion. The master had allowed a lien to be created without the goods owner’s authority and contrary to his express agreement not to do so.
The case is discussed in Clerk & Lindsell at paragraph 17-17. The discussion continues:
“But in cases of long-term hire and hire-purchase, the owner impliedly authorises the hirer to deliver the subject matter to others for purposes, such as repair, which are reasonably incidental to the use contemplated even though they may give rise to a lien.”
The Judge did not think this principle was confined to cases of long-term hire and hire-purchase. The Judge would hold that a goods owner who authorised a bailee to deliver goods into storage must be taken to authorise the creation of a lien where that was a reasonable and foreseeable incident of the storage contract which the bailee was authorised to conclude. It is an example of the principle of sub-bailment on terms, established by cases such as Morris v C.W. Martin & Sons Ltd [1966] 1 QB 716 and The Pioneer Container [1994] 2 AC 324, whereby a head bailor is bound by the terms in a contract between his bailee and a sub-bailee if he has expressly or impliedly consented to those terms.
It has been established for many years that if the bill of lading holder does not claim delivery within a reasonable time, the master may land and warehouse the cargo; that in some circumstances it may be his duty to do so; and that as a correlative right, the shipowner is entitled to charge the cargo owner with expenses properly incurred in so doing: see Scrutton on Charterparties , 21st Edition (2008), Article 153.
Even more recently, in The Lehmann Timber [2013] EWCA Civ 650, [2013] 2 Lloyd’s Rep 541 at [95] Sir Bernard Rix said:
“In Gaudet v. Brown (Cargo ex “Argos”) (1873) LR 5 PC 134 the authorities at Le Havre prevented the discharge of a cargo of petroleum. The shipowner found no nearer port where he could discharge the cargo and so took it back again to London. He was held entitled to his freight, backfreight and expenses, because the consignee was under a duty to discharge the cargo and the shipowner was under a duty to take care of the cargo in the circumstances which had arisen and he had acted reasonably. He could not throw the cargo into the sea, but he was not required to retain and preserve the cargo at his own expense. That was not a case where a lien was exercised, but the case illustrates the doctrine that a shipowner is entitled to be indemnified in contract and/or bailment for the reasonable expenses of dealing with a cargo where the consignee is unwilling or, as here, unable to perform his duty of discharging the cargo (at 161, 165).”
In the case in question it was the claimant’s responsibility as the shipper to whom the bill of lading was issued, and therefore as a party to the bill of lading contract, to take delivery of the cargo at Tianjin. In breach of the contract it failed to do so, leaving the shipowner with no alternative but to land and store the cargo. That was, what the claimant wanted and expected the shipowner to do. It was not and could not have been suggested that it was unreasonable to agree to a term in the storage contract which conferred a lien on the warehouse company for its charges. The claimant knew that the warehouse company would insist on such payment before the cargo could be removed. That was not merely a matter of his subjective understanding, but of obvious commercial reality. No sensible warehouse company would agree to store a cargo on terms which did not include such a lien, with the consequence that it would be obliged to release the cargo without payment to a bill of lading holder which had already shown itself (by failing to take delivery from the vessel) ready to breach its obligations and would be left with an unsecured claim to recover those charges.
In those circumstances the claim for conversion by reason of the creation of a lien must fail. The claimant did authorise the storage of the cargo. It did so expressly by virtue of clause 12 of the charterparty incorporated into the bill of lading, which permitted the discharge and storage of the cargo, and by its email of 6 March 2012 which was reasonably to have been understood in this way. It did so impliedly as an aspect of the well established general law of bailment applicable to the situation where a bill of lading holder fails to take delivery at the discharge port. In such circumstances the creation of a lien was a reasonable and foreseeable incident of the storage contract which the shipowner was authorised to conclude. In accordance with the principle of sub-bailment on terms the claimant must be taken to have authorised also the creation of that lien.
The claimant submitted that the shipowner’s failure to give notice of what it was intending to do made all the difference. In fact, however, it made no difference at all. The shipowner was under no duty to the bill of lading holder to give notice of the vessel’s arrival ( Houlder v General Steam Navigation Co (1862) 3 F & F 170 ) but even if it had done so, the claimant would simply have requested that the cargo be discharged into storage, just as it did by its email of 6 March 2012 after this discharge had already taken place. There was never a possibility that the claimant would have taken delivery of the cargo without it first being discharged into storage. Even after it was discharged, the claimant never sought to take delivery by presenting the bill of lading.
The claimant did not submit that commencement of discharge only seven hours and 40 minutes after tender of notice of readiness was unreasonable or premature. The Judge found that it was reasonable. The claimant had ample opportunity to present the bill of lading if it had wished to do so.
Conversion by denial of access
As indicated by the citations from the Kuwait Airways case [2002] UKHL 19, [2002] 2 AC 883 and from Clerk & Lindsell set out above, in some circumstances a denial of access to goods may be such as to constitute the tort of conversion. This will generally depend on whether the conduct of the defendant or those for whom it is responsible amounts to a deliberate “encroachment on the rights of the owner [so] as to exclude him from use and possession of the goods”.
In the case in question, however, the matters relied upon by the claimant as constituting such a denial of access fell well short of this, whether considered individually or together.
The first such matter, the statement said to have been made by Teda on 12 March 2012 that “if you would sell the B/L, he would be definitely capable to keep the buyer of the B/L from acquiring the cargo”, was reported at second hand through an informal intermediary. There was no evidence from the informal intermediary. Precisely what was said or in what context was unknown. The claimant did not understand this as excluding the claimant from use and possession of the cargo. Instead the claimant continued to discuss a sale of the cargo to a potential new buyer, in the context that there was an existing dispute between the claimant and Teda in which Teda’s position so far was that if the cargo was going to be sold to a third party, it would need to be reimbursed for the US $1.5 million which it had expended by way of advance payments and freight. In any event there was no reason to suppose that Teda was speaking on behalf of the warehouse company TQST, or that Teda was saying anything more than insisting that if the claimant did not reimburse it the US $1.5 million, Teda would take steps against the cargo to ensure that it got paid. The shipowner was not responsible for statements made by Teda as distinct from TQST.
The second matter relied upon by the claimant was Star Ship’s failure to provide information as to the whereabouts of the cargo in the telephone conversation of 18 March 2012. Again, precisely what was said or in what context was unknown, although it was apparent that the conversation included an assurance that Teda could not obtain the release of the cargo without producing the original bill of lading. Far from amounting to a deliberate encroachment on the rights of the owner, that statement represented an assurance that the rights of the bill of lading holder would be respected. Moreover, within only 11 days of this conversation the claimant knew the location of the cargo.
Finally, the claimant relied on Teda’s statement to the claimant on 18 March 2012 that “the cargo is ours and we have already cleared it from customs”. It was clear that, this was said in the capacity of Teda, not on behalf of TQST. TQST never had any claim to ownership of the cargo. It never purported to “exercise dominion” over it save for the fact that it wanted, as it was entitled, to be paid its storage charges.
Nevertheless the claimant never did present the bill although the cargo remained at TQST and was not misappropriated by Teda. Once its prospective sale to a new buyer fell through for whatever reason, the claimant had no use for the cargo. It had no other buyer, no use for the cargo itself and nowhere else to keep it. It was not prepared to pay the accumulating storage charges and it was unwilling to refund the advance payments (amounting to over 70% of the FOB price) or freight cost which Teda had incurred.
Moreover the evidence of TQST was that TQST operated as a bonded warehouse under the supervision of the port; that it was and was run independently of Teda, who would not be in a position to give instructions for the removal of the cargo without producing the bill of lading; that Teda had never asked TQST to remove the cargo; and that in order for the cargo to be removed, it would have to be cleared through customs for which presentation of the bill of lading would be necessary.
In these circumstances it was simply not the case that the claimant had been deprived of the use and possession of its cargo. The Judge accepted the evidence of Star Ship that the cargo remained under the control and custody of Star Ship. It was always available to the claimant on presentation of the bill of lading and payment of the charges which had accrued.
Other defences
Accordingly the claimant’s claim for damages for conversion must be dismissed. It was therefore unnecessary to consider at any length the shipowner’s further defences based on exclusion clauses in the bill of lading and the charterparty.
The bill of lading included a term that:
“The Carrier shall in no case be responsible for loss of or damage to cargo arisen prior to loading and after discharging.”
Clause 2 of the Gencon charterparty provided:
“Owners’ Responsibility Clause The Owners are to be responsible for loss of or damage to the goods or for delay in delivery of the goods only in case the loss, damage or delay has been caused by personal want of due diligence on the part of the Owners or their manager to make the Vessel in all respects seaworthy and to secure that she is properly manned, equipped and supplied, or by the personal act or default of the owners or their Manager. And the Owners are not responsible for loss, damage or delay arising from any other cause whatsoever, even from the neglect or default of the Master or crew or some other person employed by the owners on board or ashore for whose acts they would, but for this Clause, be responsible, or from unseaworthiness of the vessel on loading or commencement of the voyage or at any time whatsoever.”
The shipowner submitted, relying on the decision of the Privy Council in Chartered Bank of India, Australia & China v British India Steam Navigation Co Ltd [1909] AC 369, that these clauses would have protected the shipowner from liability. If necessary, however, the Judge would have followed the approach of Clarke J in The Ines [1995] CLC 886 and of the Court of Appeal in Moris Exports Ltd v Dampskibsselskabet AF 1912 Aktieselskab [2000] CLC 515 and would have held that much clearer words would have been required to protect the shipowner against liability for conversion by refusing to deliver the cargo against production of the bill of lading.
The Judge also mentioned two further matters. The first was the shipowner’s contention that the claimant failed to mitigate its loss by presenting the bill of lading and taking delivery of the cargo. On the facts which the Judge had found, the claimant could have done this, although if it had done so it would have had to pay at least some storage charges and to deal with Teda’s claim for reimbursement. On those facts, however, there was no conversion and the question of mitigation did not arise.
The second matter was the quantum of the claim. Usually damages in conversion are assessed by reference to the value of the goods of which a claimant has been deprived, but that was not how the claimant had put its case. Its pleaded claim was said to be for the market value of the cargo, but the figure claimed was US $565,891.58. That was pleaded as being “the market value of the Cargo – as had been agreed between the Claimant and Teda – as at the date of conversion and/or expected delivery”. In fact, however, it was no such thing. Rather it was the unpaid part of the FOB price of the cargo (US $332,051.58) plus a claim for a balance of US $233,840 alleged to be owing from Teda under a separate contract. As the claim had failed, it was unnecessary to consider further what the correct quantum ought to be in these circumstances, but even applying the claimant’s mistaken approach, it was hard to see how judgment for more than US $332,051.58 could be justified.
In fact, however, the claimant had failed to prove that it had suffered any loss. Assuming that it was deprived of the use and possession of the cargo, what it lost was the CIF market value in China, where it would have had to dispose of the cargo. There was no expert or other evidence to quantify that value. It was, however, reasonable to infer that in view of the dispute with Teda for which the shipowner was not responsible, the cargo would probably have been seen as a distressed cargo. A potential buyer would therefore have been able to take advantage of the claimant’s need to sell the cargo promptly to minimise storage charges. In any event the claimant would have had to pay at least some storage charges, which would have increased the longer it delayed. It would also have had to deal with Teda’s claim for reimbursement of the US $1.5 million which it had expended. These factors, it seemed to the Judge, went a long way to explain why the claimant, having been paid all but some US $300,000 of the FOB price by Teda, did nothing to assert its right to possession by presenting the bill of lading. In any event the claimant had not attempted to prove that the price for which it could have sold the cargo to a buyer in China would have exceeded the storage charges and reimbursement to Teda which it would have had to pay out.
The shipowner’s counterclaim for storage charges
The claimant accepted that if the claim for conversion failed, the claimant would be liable to reimburse the shipowner for reasonable storage charges paid to TQST subject to three points.
The first point was that in concluding the storage contract with TQST, Star Ship was acting as the agent of Shanghai Hengxin as the time charterer of the vessel and not of the shipowner, so that the latter had no liability to TQST. The Judge did not accept this. Star Ship was appointed by Shanghai Hengxin to act as the agent at Tianjin for both the charterer and the owner. In concluding the storage contract it was acting, as the Judge already found, as the agent of the shipowner so as to render the shipowner liable for TQST’s storage charges.
The second point was that the shipowner was able to pass its liability down the charterparty chain by virtue of the provisions of the various letters of indemnity. Even if this was so, however, it did not provide the claimant with a defence. In any event the reason why such substantial storage charges had accumulated was that having received already most of its value, the claimant had chosen to leave the cargo in storage rather than to present the bill of lading and take delivery.
Finally, the claimant’s case was that the shipowner failed to mitigate by selling the cargo. However, the Judge was not satisfied that this could have been done without the bill of lading. In order for the cargo to be sold it would have had to be cleared through customs and the evidence was that the bill of lading would have been needed for this to happen. In any event the claimant would certainly have objected to a sale of the cargo. If this was to be done, it was for the claimant as the bill of lading holder to take the lead.
The Judge held, therefore, that the claimant was liable to reimburse the shipowner for reasonable storage charges as and when paid to TQST. As yet those storage charges had not been paid. The Judge accepted the evidence of the fleet manager that it had successfully negotiated the amount due to TQST down to US $2,146,763.11 as at 21 July 2015, the first day of the trial, which represented substantial discount in the shipowner’s favour. This represented the cost of storage for over three years and the Judge found that the figure was reasonable.
The bill of lading
The shipowner sought an order for delivery to it of the bill of lading to enable the cargo to be sold. In the Judge’s judgment the shipowner was entitled to such an order. The claimant was in breach of its obligation to take delivery of the cargo. As a result the shipowner had no alternative but to discharge the cargo into storage. It thereby incurred a liability to TQST to pay storage charges for which the shipowner was liable to reimburse it. That liability would continue to increase indefinitely unless the cargo could be sold, but the bill of lading was needed in order to clear the cargo through customs so that a sale could take place. The claimant had demonstrated by its conduct over the last three years that it had no intention of taking delivery of the cargo. Unless ordered to do otherwise, it would be prepared to leave the cargo at TQST’s warehouse until the crack of doom.
In those circumstances the Judge held that, just as a shipowner has a right to charge the cargo owner with expenses properly incurred in landing and storing the cargo so as to preserve it for the cargo owner, the cargo owner has a continuing duty to take delivery of the cargo once it is landed, and to do what is necessary to co-operate in minimising loss and expense if it is unwilling or unable to do so. On the facts here, that required delivery up of the bill of lading.
Conclusions
For the reasons given above:
a. the claimant’s claim for damages for conversion failed; b. there would be a declaration that the claimant was liable to reimburse the shipowner for reasonable storage charges as and when paid to TQST, and that the amount of the defendant’s reasonable liability to TQST up to 21 July 2015 amounted to US $2,146,763.11; and c. the claimant must deliver the original bill of lading to the shipowner to enable the cargo to be sold.
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The Hong Kong High Court issued a Judgment on 11/12/2013 holding that a Hong Kong plaintiff needed to put up a security for costs in a court case concerning a yacht sinking incident. [HCCL 5/2013]
In this issue, we would like to continue with the case (CSAV v Hin-Pro) mentioned in our monthly newsletter of Chans advice/169 two months ago. The Hong Kong Court of Appeal issued its Judgment on 11/3/2015 discharging the Mareva Injunctions and the receivership orders granted by DHCJ Saunders against Hin-Pro and Soar. [CACV 243/2014]
The High Court of Hong Kong issued a Judgment on 1/11/2012 ordering the USA/Canada owners of a cargo (a yacht) to put up HK$250,000 as further security for costs in their legal action against the ship owners. [HCAJ 177/2009]
The High Court of Hong Kong issued a Decision on 23 May 2018 allowing a shipowner to be represented by 2 different firms of solicitors (one appointed by its hull underwriters and the other appointed by its P&I Club). [HCAJ84/2017] [2018HKCFI1136]
In Chans advice/215, we reported the High Court of Hong Kong refused Changhong Group’s application to stay the Hong Kong action. The Court of Appeal also subsequently dismissed Changhong Group’s appeal. On 13 July 2020, the Court of Final Appeal finally dismissed Changhong Group’s application for leave to appeal. [FAMV No. 34 of 2020] [2020 HKCFA 24]
In the transport industry, the contracts of carriage (e.g. Bills of Lading, Air Waybills) usually contain an exclusive jurisdiction clause for settling disputes. However, it is not uncommon that the shippers and consignees sue the transport operators in a court other than the one specified in the exclusive jurisdiction clause. In Hong Kong, the transport operators may rely on the Foreign Judgments (Restriction on Recognition and Enforcement) Ordinance to tackle this kind of situation.
Following the Hong Kong Court of Appeal’s Judgment dated 11/3/2015 discharging the Mareva Injunctions and the receivership orders (mentioned in our monthly newsletter of Chans advice/171 two months ago), the Hong Kong High Court issued a Judgment on 12/5/2015 to determine the question of who should pay the remuneration to the receivers. [HCMP 1449/2014]
The Hong Kong Court of Appeal issued a Judgment on 12/2/2018 to deal with the cargo owners’ seeking leave to appeal against the High Court’s Judgment reported in our Chans advice/209 last month. [CAMP 38/2017] [2018 HKCA77]
The Hong Kong Court of Appeal on 1 December 2021 allowed a charterer’s appeal against a High Court’s Decision dated 13 April 2021 (which disallowed the charterer’s charter hire claims of US$234,955 against the shipowner because the High Court was not satisfied the claims were well founded). [CACV 294/2021] [2021 HKCA 1865]
The Hong Kong Court of Appeal issued a Judgment on 18/12/2014 in connection with a cargo misdelivery claim of US$27,835,000 involving also anti-suit injunction and worldwide freezing order issued by the English Court. [CACV 243/2014 & HCMP 1449/2014]
The Hong Kong High Court issued a Decision on 21 July 2023 in relation to a case that an aircraft (worth at least USD 80 million) and its cargoes were destroyed by a fire caused by the goods of chlorine dioxide disinfection tablets. [HCA 837/2022] [2023 HKCFI 1896]
Remember our Chans advice/171 of 31/3/2015 reporting that the Hong Kong Court of Appeal discharged the Mareva injunctions against Hin-Pro? The Hong Kong Court of Final Appeal issued a Judgment on 14/11/2016 reversing the Court of Appeal’s Judgment of 11/3/2015. [FACA No. 1 of 2016]
The Hong Kong High Court issued a Decision on 11 May 2021 staying a South Korea container terminal’s legal action in Hong Kong with respect to its allision claims of more than US$90,000,000 against the owners of a container ship. [HCAJ 31/2020] [2021 HKCFI 1283]
The Hong Kong High Court issued a Decision on 20/12/2017 dealing with a dispute of US$948,802.05 (as the price of bunkers supplied to a vessel) between a vessel charterer and a bunker supplier. [HCA2265/2016]
The Court of Appeal of Hong Kong issued a judgment on 28 March 2019 dealing with a matter concerning the sale pendente lite of an oil tanker Brightoil Glory. [CAMP49/2019][2019HKCA395]
The Hong Kong Court of Appeal issued a Judgment on 20 February 2019 dismissing Changhong Group’s appeal against the High Court’s Decision of 15 November 2018 (reported in Chans advice/215) because Changhong Group had not obtained leave to appeal from the Hong Kong High Court. [CACV576/2018] [2019HKCA246]
We refer to our Chans advice/251 last month reporting the Hong Kong High Court’s decision to sentence Mr Ma (Hyundai Hong Kong’s former deputy general manager) to 15 years’ imprisonment. The High Court issued another Judgment on 27 April 2022 holding Mr Ma liable to compensate HK$387,655,303.70 to Hyundai Hong Kong. [HCA 619/2016] [2022 HKCFI 1153]
In our newsletter last month, we talked about some essential terms in house Air Waybills. In this issue, as the continuation of the loss prevention exercise for freight forwarders, we would like to discuss some essential terms in house Bills of Lading.
The Hong Kong High Court issued a Judgment on 11 January 2019 dealing with a dispute of US$335,858.31 between a bunker supplier and a ship agent. [HCA119/2015] [2019HKCFI57]
The Hong Kong High Court issued a Judgment on 9/4/2018 dealing with a cargo total loss case in which a NVOC in Malta was wrongly sued (because it had the same name as that of the correct NVOC in BVI). [HCAJ 65/2016], [2018 HKCFI 699]
In Chans advice/215, we reported that the Hong Kong High Court refused Changhong Group’s application to stay the Hong Kong proceedings; and in Chans advice/234, we reported that the Court of Final Appeal dismissed Changhong Group’s application for leave to appeal. On 7 April 2022, the Hong Kong High Court issued a Decision dealing with Changhong Group’s action to re-litigate its stay application. [HCAJ 3/2018] [2022 HKCFI 920]
To continue our recent series of loss prevention articles, we would like to discuss in this issue the major provisions of the PRC Maritime Code as far as the international carriage of goods by sea is concerned.
On 5/8/2011, the District Court of Hong Kong dismissed a shipping company’s container claims against a forwarder for want of prosecution and abuse of process. [DCCJ 765/2005]
The Hong Kong Court of Appeal’s Judgment dated 11/4/2008 explained some legal principles relating to whether indemnity claims are allowed by in rem legal actions against vessels. [CACV 257/2007]
There are three ways of fulfilling the deposit requirement of the Ministry of Transport (“MOT”) in the People’s Republic of China (“PRC”) for your NVOCC license.
The Hong Kong High Court issued a Judgment on 7/6/2011 explaining the concept of the package limitation of the United States Carriage of Goods by Sea Act. [HCAJ 181/2008]
The Hong Kong District Court issued a Judgment on 8/4/2014 holding that the one year’s suit time limit under the Hague Visby Rules does not apply to the carrier’s claims against the shipper. [DCCJ 4438/2013]
The English Court of Appeal gave a Judgment on 6/7/1987 explaining how to calculate the suit time limit for the indemnity claim under the Hague Visby Rules. ([1987] 1 W.L.R. 1213)
The Hong Kong High Court issued a Judgment on 22/8/2016 dealing with a case that a forwarder wanted to strike out a cargo misdelivery claim on the ground that the claim disclosed no reasonable cause of action. [HCCL 5/2015]
The Hong Kong Court of Appeal issued a Judgment [CACV144/2017] [2018HKCA299] on 29/6/2018 upholding the High Court’s Judgment dated 2/6/2017 (which was reported in our Chans advice/201).
The Hong Kong High Court issued a Judgment on 27/5/2011 in relation to an air shipment that a forwarder issued two sets of its House Air Waybills to two different parties for one lot of cargoes. [HCCL 117/1994]
The Hong Kong High Court on 13/8/2013 held a shipper liable to a shipping company for paying demurrage of US$1,645,286.74 plus interest and costs. [HCAJ 166/2011]
The Hong Kong Court of Final Appeal (“the CFA”) issued a Judgment on 10/9/2014 dismissing a cargo owner’s (“the Assured”) cargo insurance claim of US$1,555,209.00 against an insurance company (“the Insurer”) on the ground that the Assured had breached an insurance warranty relating to the carrying vessel’s deadweight capacity. [FACV No. 18 of 2013]
As reported in our Chans advice/170 dated 27/2/2015, the English High Court on 14/10/2014 held CSAV’s bill of lading’s English jurisdiction clause as an exclusive jurisdiction clause. On 23/4/2015, the English Court of Appeal issued its Judgment reaching the same conclusion. [Neutral Citation No: 2015 EWCA Civ 401, Case No: A3/2014/3584]
The 12th annual SMIC seminar on uncollected cargoes pulled some 300 participants to attend with much curiosity for 3 hours in the YMCA Assembly Hall. The accumulated questionmarks and enigmas about the subject matter lurking in the trade were unleashed among the audiences.
Remember our Chans advice/165 (reporting the Hong Kong Court of Appeal holding the Hong Kong forwarder liable to pay US$852,339 plus costs and interest to the Indian bank in the air cargo misdelivery case)? On 19/5/2016, the Court of Final Appeal dismissed the Hong Kong forwarder’s application for seeking leave to appeal. [FAMV Nos 45 & 52 of 2015]
The 10th annual SMIC seminar on Forwarders’ Standard Trading Conditions wrapped a decade of unabated effort hammering for the freight industry’s attention to loss prevention by proper freight documents. The topic had attracted over 300 participants to attentively listening for 3 hours in the YMCA Assembly Hall. We thank them all for the patience.
More than 10 years ago, we broke new grounds unheard of before among insurance brokers by introducing genuine claim support (by truly employing a team of professional transport claim handlers) independent of that from the insurers. Since then, the knowledge advantage of the insurer over that of the transport operator insured has been evened. Those who buy transport liability insurance are truly better protected with professionals standing at their side who really know the freight industry and are conversant in transport insurance and claims handling.
The Hong Kong High Court issued a decision on 11/9/2013 concerning a shipowner’s application to extend the validity of a writ of summons against a Taiwan hull and machinery insurer. [HCAJ 95/2012]
On 12/4/2017, the Hong Kong High Court dismissed an application made by a cargo owner for stay of proceedings commenced by two forwarders in relation to an uncollected cargo case. [HCA 1927/2016]
We reported in our Chans advice/252 that the Hong Kong High Court held Hyundai Hong Kong’s ex-Deputy General Manager (Mr Ma) liable to compensate HK$387,655,303.70 to Hyundai Hong Kong in the case of his theft of his employer’s money. On 23 December 2022, the Hong Kong High Court issued a decision ordering a sum of HK$500,000 (which was deposited by Mr Ma as bail money) to be released to Hyundai Hong Kong in partial satisfaction of Mr Ma’s judgment debt. [HCA 619/2016] [2022 HKCFI 3798]
The Hong Kong High Court issued a Judgment on 18/11/2016 dismissing a shipping company’s application for summary judgment against its former deputy general manager (Mr Ma) for restitution of the sum of HK$387,655,303.70 on the ground of money had and received and/or unjust enrichment. [HCA 619/2016]
The Hong Kong High Court issued a ruling on 2/12/2016 dealing with a shipowner’s interrogatory application in relation to an uncollected cargo case. [HCAJ 118/2015]
The Hong Kong High Court issued a Judgment on 23/12/2013 dealing with an application for security for costs in relation to a ship sinking case. [HCAJ 213/2009]
The Hong Kong High Court issued a Judgment on 9/2/2010 holding a carrier entitled to rely on its bill of lading clause to lien the cargoes for the damages, costs, expenses, charges resulting from the shipper’s overloading the cargoes in the containers. [HCA 1579/2008]
The Hong Kong High Court issued a judgment on 12/4/2016 to dismiss a cargo owner’s action in respect of breaking a barge owner’s tonnage limitation. [HCAJ 178/2014]
We mentioned in our Chans advice/225 that the limit of liability under the Montreal Convention for carriage of cargoes was increased from 19 SDR/kg to 22 SDR/kg of the gross weight of the cargoes effective on 28 December 2019. We have recently received some forwarders’ request asking us to talk about the major terms in the Montreal Convention. We in this issue would like to introduce the Montreal Convention’s major provisions as follows:
The High Court of Hong Kong issued a summary Judgment on 28/9/2012 holding a forwarder liable for US$626,389 plus costs and interest for misdelivery of cargoes without production of the original bills of lading. [HCCL 20/2011 & HCCL 21/2011]
In our Chans advice/244, we reported the Hong Kong High Court case [HCA937/2016] [2021 HKCFI 2310] that the forwarder was held liable to pay nominal damages of HKD1,000 to the shipper in the cargo misdelivery claim of USD1,299,189.87. On 20 October 2021, the Hong Kong High Court issued a Decision on Costs holding the shipper liable to pay the costs of the forwarder. [2021 HKCFI 3021]
The English Court of Appeal issued a Judgment on 31/7/2009 holding a charterparty clause (concerning late redelivery) as a penalty clause and thereby unenforceable. [2009] EWCA Civ 855;[2009] All ER (D) 35 (Aug)
The Hong Kong Court of Appeal issued a Judgment on 17/7/2014 holding a Hong Kong forwarder liable to pay US$852,339 plus costs and interest (as damages for conversion) to an Indian bank in an air cargo misdelivery case. [CACV 282/2012]
Without even knowing, we have published including this one 200 issues of the Chans Advice. As this is a monthly bulletin, 100 issues took more than 8 years and 200 issues took 17 years to run.
The High Court of Hong Kong issued a Judgment on 4/5/2012 explaining some legal principles as to when shipowners should fear the arrest of their ships. [HCAJ 141/2010]
The Hong Kong High Court issued a Decision on 9/5/2017 allowing a time extension for some cargo interests to claim against the Tonnage Limitation Fund constituted by the owner of one of the two vessels involved in a collision that happened on 7/11/2013. [HCAJ 189/2013]
This continues the Q&A in our off-line real seminar on Uncollected and Undelivered Cargo on 28 May 2024. Participants were keen to know more about seaway bills, how war plays in insurance? How modes of transport differ mis-delivery claims handling? What is insurers’ attitude towards transloading claims? And finally, why mis-delivery and uncollected cargo claims deserve special attention. SMIC deals with similar questions daily. Each case varies in its cause, and therefore healing recipe differs. But if you are conversant with fundamentals. They could be simple.
Remember our Chans advice/163 about the English High Court’s Judgment holding the Hague Visby Rules instead of the Hague Rules to apply to the cargo damage claim case in excess of US$3.6 million? The English Court of Appeal issued a Judgment on 24/2/2016 upholding the High Court’s conclusion but with different reasons. [Case No: A3/2014/1285, 2016 EWCA Civ 101, 2016 WL 00692394]
The amendment to the International Convention for the Safety of Life at Sea (SOLAS) 1974 Chapter VI, Regulation 2 in respect of the verified gross mass of a container carrying cargo (laden container) is for entry into force globally on 1 July 2016.
While the MOL Comfort incident was a disaster widely talked about among forwarders, all who suffered loss without exception will try whatever means to recover their losses down the line wherever the legal regimes permit.
The Hong Kong High Court issued a Judgment on 5/8/2015 holding that a shipment of formula milk powder without the legally required export licence should not be forfeited. [HCMA171/2015]
The Hong Kong High Court issued a decision on 31 May 2022 ordering a South Korean shipowner to provide a Hong Kong shipowner with security for costs in the amount of HK$600,000 in relation to a ship collision case that happened in Hong Kong during the super typhoon Hato in August 2017. [HCAJ 80-85/2019] [2022 HKCFI 1631]
The Hong Kong High Court issued a Judgment on 13 August 2021 holding a forwarder liable to pay nominal damages of HKD1,000 to a shipper in a cargo misdelivery claim case of USD1,299,189.87. [HCA 937/2016] [2021 HKCFI 2310]
The High Court of Hong Kong issued a Decision on 15 November 2018 concerning the tragic collision between the cargo vessel CF Crystal and the tanker Sanchi, which happened on 6 January 2018 and led to the death of all the officers and crew of the Sanchi. [HCAJ3/2018] [2018HKCFI2474]
Our Chans advice/191 reported a Hong Kong High Court’s case concerning a shipping company’s restitution claim against its former deputy general manager (Mr Ma) for HK$387,655,303.70. The latest development of this case is: the Hong Kong High Court issued a Judgment on 1/2/2018 and a Decision on 9/2/2018 holding that Mr Ma was in contempt of Court as a result of his breach of a Mareva Injunction Order and that he be committed to prison for 4 months. [HCMP1115/2017] [2018 HKCFI176] [2018 HKCFI328]
The Hong Kong High Court issued a Decision on 13 May 2021 to deal with an interpleader action concerning the stakeholding of US$700,000 in relation to a dispute over some management fees between two transport operators. [HCMP510/2020] [2021 HKCFI 1373]
The United States District Court (Southern District of New York) issued an order on 29 November 2021 to deny a shipping company’s motion to rely on the Singapore jurisdiction clause in its bill of lading. [1:19-cv-5731-GHW-RWL]
The VGM laws have come into operation in Hong Kong since 1/7/2016. They are mainly contained in Section 3 and Section 3A of the Merchant Shipping (Safety) (Carriage of Cargoes and Oil Fuel) Regulation (Chapter 369AV) as follows:
The High Court of Hong Kong issued a Judgment on 3/2/2012 concerning which currency (US$ or Euro) should be the proper one for the cargo owners in a shipment to claim against the forwarder for compensation in a cargo damage case. [HCAJ 152/2010]
The Hong Kong High Court issued a Decision As To Costs on 5 December 2024 ordering a shipowner (which lost in an anti-suit injunction court case) to pay the winning party’s (a cargo owner) costs on an indemnity basis. HCCT 66/2024 [2024 HKCFI 3511]
The Hong Kong High Court issued a Judgment on 29/4/2013 relating to a discovery order ancillary to and in support of a Mareva injunction. [HCA 2124/2011]
We recently have received a lot of uncollected cargo claim cases from our forwarder clients, which have kept our 6 claim handlers very busy. We would like to take this opportunity to talk about this troublesome problem of uncollected cargoes. Actually, the forwarders have been facing this real headache in at least these two decades.
Remember our Chans advice/138 regarding the Hong Kong High Court’s Judgment holding the He Da 98’s owners fully liable in the collision that happened off Shanghai? The Hong Kong High Court issued its Decision on 18/1/2013 dealing with the damages to be paid to the Pontodamon’s owners. [HCAJ 200/2007]
Against the post-Covid tide, we ran an off-line real seminar on Uncollected and Undelivered Cargo on 28 May 2024. Attendance could not be compared with any webinars but the number of enthusiastic questions in the Q&A session reflected the demand for transport liability issue solutions. For the sake of recapitulations and sharing the Q&A among the Chan Advice readership, we like to report the Q&A in two issues. We welcome any other questions you may have on the following.
The English High Court issued a Judgment on 26/2/2010 holding that a shipping company could follow the shipper’s instructions to change the consignee and the destination in its bill of lading and that the original consignee became having no title to sue. (2010 WL 606031)
SMIC has finally jumped on the bandwagon of the cyber media rush by its presence on the Facebook. We would have done this for a long time had it not been for the daily chores and that we were then not too convinced of its value in the commercial world. Thereafter, it becomes obvious that more and more firms are capitalizing on this new media; and unlike the old economies where information flow was imperfect, consumers of the new economies tend to prefer looking up for information by themselves from the web, or augmenting information they are given.
In the issue of our Chans advice last month, we talked about the major provisions of the Montreal Convention (which is for the international carriage of goods by air). In this issue, we would like to discuss the major terms of an equally important international convention for the international carriage of goods by sea, viz. the Hague Visby Rules.
The Hong Kong District Court issued a Judgment on 28/4/2014 dismissing a seller’s cargo misdelivery claim of US$122,302.80 against a freight forwarder and holding the seller liable to pay the outstanding freight charges of US$28,855 to the forwarder. [DCCJ 344/2010]
The Hong Kong High Court issued a judgment on 21/4/2016 and disallowed a cargo owner’s application for summary judgment against a forwarder in connection with a cargo (a diamond) missing claim of US$900,000. [HCCL 10/2015]
The Hong Kong District Court issued a Judgment on 26 April 2022 dealing with a case concerned with transfer of business and lifting the corporate veil, and held a forwarder and its shareholder and director jointly and severally liable for a debt of HK$975,733.71. [DCCJ 2104/2019] [2022 HKDC 289]
According to the Hague-Visby Rules, the carrier shall be discharged of all liability in respect of the cargoes unless suit is brought within one year of their delivery or the date when they should have been delivered. The English High Court issued a Judgment on 22nd July 2025 explaining the meaning of “suit”. [2025 EWHC 1878 (Comm)]
The limit of liability for international carriage of cargoes by air under the Montreal Convention has been revised from 19 SDR/Kg to 22 SDR/Kg of the gross weight of the cargoes effective from 28 December 2019. We have received many enquiries from freight forwarders about changing their house Air Waybills’ terms to cope with the new limit of liability. We would like to take this opportunity to discuss some essential terms in house Air Waybills.
The Hong Kong High Court on 18/11/2011 issued a Judgment concerning a quite confusing situation that three different laws (the USA, the PRC, and Hong Kong) might apply to the one shipment. [HCAJ 198/2009]
The High Court of Hong Kong issued a Judgment on 21/7/2014, in which some legal principles relating to the in rem jurisdiction of the Court to arrest vessels were explained. [HCAJ 241/2009]
The High Court of Hong Kong issued a Decision on 31/8/2018 concerning a feeder company’s claim against a shipping company’s lawyer for wasted costs. [HCA1919/2016] [2018HKCFI1879]
The Hong Kong High Court issued a judgment on 30/4/2015 dealing with the legal principles in respect of the order of priorities in distributing the sale proceeds of an arrested ship. [HCAJ 129/2013]
The Hong Kong High Court issued a Decision on 22 Feb 2021 holding that the wreck removal claims of a ship sunk were not subject to the Convention on Limitation of Liability for Maritime Claims 1976. [HCAJ 98/2019] [2021 HKCFI 396]
The English Court of Appeal issued a Judgment on 20/1/2011 holding two clauses in the standard trading conditions of the British International Freight Association valid. One of them was about all sums due to the forwarder to be paid without reduction or deferment on account of any claim, counterclaim or set-off. The other was about the 9-month suit time limit. [2011] All ER (D) 128 (Jan); [2011] EWCA Civ 18
The Ningbo Maritime Court issued a Judgment on 25/5/2016, and dismissed a cargo insurer’s (PICC Ningbo) recovery claim of USD25,238.40 against Mitsui O.S.K. Lines Ltd (“MOSK”) in relation to the vessel MOL Comfort sinking into the Indian Ocean on 17/6/2013.
The Hong Kong High Court issued a Judgment on 22/11/2013 concerning an unless order in relation to a freight forwarder’s claims for outstanding freight charges of HK$4,427,336. [HCA 1755/2011]
The Hong Kong High Court issued a Judgment on 3/2/2017 holding Natural Dairy liable to pay HK$4,360,948.38 to Schenker being the outstanding freight charges. In the Judgment, the Judge also explained the principles regarding the meaning of notice of the forwarder’s standard trading conditions. [HCA 1755/2011].
The Hong Kong Court of Appeal issued a Judgment on 9/7/2015 in relation to the High Court Judgment dated 21/7/2014 (reported in our Chans advice/167 dated 28/11/2014). [HCMP 2315/2014]
The District Court of Hong Kong issued a Judgment on 21/4/2011 dismissing a forwarder’s cargo indemnity claim of US$46,201.81 against a trucking company. [DCCJ 2092/2009]
The Shanghai Maritime Court issued a Judgment on 24/12/2009 to deal with the question whether a shipping company could charge the container demurrage based on the tariff published on its website.
The Hong Kong District Court issued a Decision on 30 April 2021 dealing with a personal injury case in relation to a container terminal. [DCPI 110/2020] [2021 HKDC 463]
The Hong Kong High Court issued a Decision on 4 March 2020 dismissing a shipowner’s application for a stay of proceedings in favour of arbitration in a case of cargo misdelivery without presentation of original bill of lading. [HCAJ 5/2019] [2020 HKCFI 375]
Remember our last issue Chans advice/129 that the forwarder was held liable for its refusing to release the goods to the named consignee without original straight Bill of Lading? On 12/8/2011, the Hong Kong Court of Appeal issued a Judgment dismissing the forwarder’s application for leave to appeal. [HCMP 683/2011]
The Hong Kong High Court issued a Decision on 2 October 2024 dismissing a shipping company’s application to strike out a forwarder’s third party indemnity claim in a cargo (frozen beef) damage case. [HCAJ 9/2023, HCAJ 22/2023, 2024 HKCFI 2708]
The Hong Kong Court of Appeal issued a Judgment on 4 October 2019 upholding the High Court’s Decision dated 9 April 2018 (reported in our Chans advice/208). [CACV593/2018][2019HKCA1101]
We have received some enquiries from our forwarder clients about the FCR e.g. what is FCR? How many types of FCR are there? What are the uses of FCR? We would like to discuss these in this issue.
The Montreal Convention is an international treaty agreed by 140 states in respect of governing carriers’ liability for injury or death of passengers, damage to or loss of baggage and cargo and losses caused by delays. Hong Kong has adopted it through the Carriage by Air Ordinance (Cap 500).
The High Court of Hong Kong issued a Judgment on 26/8/2011 to determine which ship to blame in a collision case that occurred at Shanghai. [HCAJ 200/2007]
Remember Chans advice/142 dated 31/10/2012 that the High Court of Hong Kong held the forwarder liable for cargo misdelivery without production of original bills of lading? The High Court of Hong Kong issued another Judgment on 4/12/2012 dealing with the interest and costs. [HCCL 20/2011 & HCCL 21/2011]
The PRC Supreme Court on 26/11/2015 issued a Judgment holding a shipping company’s container demurrage claim against a shipper time barred. [2015民提字第119號]
What is the difference between a straight bill of lading and an order bill of lading? This can be illustrated in the Wuhan Maritime Court’s Judgment dated 17 September 2019 concerning a cargo misdelivery claim of US$89,838.
The Hong Kong High Court issued a Judgment on 11/8/2009 holding a shipping company could rely on two letters of indemnity to seek compensation of US$253,655.50 from a forwarder and a trading company in a case of cargo release without production of original bills of lading. [HCA 208/2008]
The Hong Kong Court of Appeal issued a Judgment on 29/1/2016 dealing with a case of one or two days’ delay in appeal in relation to a barge sinking accident. [HCMP 3172/2015]
The Hong Kong Court of Appeal issued a Judgment on 20 September 2019 declining to give leave of appeal to Changhong Group in relation to the High Court Decision dated 29 January 2019 (reported in our Chans advice/221). [CAMP197/2019] [2019HKCA1061]
The Hong Kong District Court issued a Judgment on 8/2/2011 holding a Hong Kong forwarder liable for its refusing to release the cargoes to a consignee without production of the original straight Bill of Lading. [DCCJ 3467/2009]
The English High Court issued a Judgment on 2/4/2014 holding the Hague Visby Rules instead of the Hague Rules (as incorporated by a Paramount Clause) to apply to a shipment ex Belgium. [Case No: 2012 Folio 102, 2014 EWHC 971 Comm, 2014 WL 1219313]
The Hong Kong High Court issued a Decision on 19 March 2018 dealing with some legal principles in relation to granting relief against unless orders in a ship collision case. [HCAJ 84/2017] [2018 HKCFI 609]
In our Chans advice/169 last month, we mentioned the English Court’s Judgment dated 14/10/2014 holding CSAV’s bill of lading’s English jurisdiction clause to be an exclusive jurisdiction clause. In this issue, let’s look at that English High Court Judgment [2013 Folio No 1248, 2014 EWHC 3632 Comm, 2014 WL 5113447] issued by Justice Cooke in detail.
In Chans advice/14 dated 28/2/2002, we discussed this topic 15 years ago. In its Judgment dated 16/10/2017, the District Court of New South Wales in Australia had to deal with, inter alia, a malpractice that a forwarder issued its own house B/Ls but signed off with as agent for China Ocean Shipping, Pacific International Lines, Mitsui O.S.K. Lines Limited or Orient Overseas Container Line without authority. [2017 NSWDC 279]
The English High Court issued a Judgment on 15/5/2015 maintaining an anti-suit injunction to restrain the Xiamen Maritime Court’s legal proceedings in breach of a London arbitration agreement. [Case No: 2015-515], [2015 WL 2238741], [2015 EWHC 1974 COMM]
In the last issue of Chans advice, we reported the case that the Hong Kong Court of Appeal rejected the mortgagee’s appeal against the High Court’s order of granting a stay until 24 April 2019 for the sale of the Vessel Brightoil Glory. On 17 May 2019, the Court of Appeal issued another judgment refusing the shipowners’ appeal in respect of their application for a further stay of the sale of the Vessel until 22 May 2019. [CAMP81/2019] [2019 HKCA 561]
We have received a lot of cargo claims from our forwarder clients in the recent months. In this issue, we would like to discuss in general how the forwarders should handle the cargo claims.
The Hong Kong High Court issued a Judgment on 25/8/2017 to determine whether the Hong Kong Court or the Yangon Court was the natural and appropriate forum in an in rem legal proceedings in relation to a cargo damage claim of USD143,852.02. [HCAJ 101/2015]
Remember Chans advice/142 and Chans advice/145 that the High Court of Hong Kong held the forwarder liable for cargo misdelivery without production of original bills of lading? The Court of Appeal of Hong Kong issued a Judgment on 31/1/2013 dismissing the forwarder’s applications for an extension of time to appeal. [HCMP 2366/2012 & HCMP 2367/2012]
The Hong Kong High Court issued a Judgment on 24/11/2015 dealing with a mandatory injunction and specific performance in respect of a letter of indemnity in connection with a delivery of cargo without production of the original bills of lading. [HCCL 12/2015]
In Chans advice/191 and Chans advice/206, we reported a case relating to a shipping company’s claim against its former deputy general manager (Mr Ma) over the alleged theft of the company’s money. The Hong Kong High Court on 16 December 2020 sentenced Mr Ma to 15 years’ imprisonment. [HCCC 20/2018] [2021 HKCFI 195]
The High Court of Hong Kong issued a Decision on 21/9/2017 dealing with the principles in respect of the real risk of dissipation of assets in a case of Mareva Injunction involving a shipowner and a charterer. [HCMP 1010/2017]
The Hong Kong High Court issued a Decision on 25 February 2019 dealing with Changhong Group’s delayed application for leave to appeal in relation to the collision case reported in our Chans advice/218 and Chans advice/215. [HCAJ3/2018, 2019HKCFI542]
The High Court of Hong Kong issued a Judgment on 22/5/2017 holding that the District Court has jurisdiction to determine bill of lading and bailment cases. [HCAJ 150/2014]
The Hong Kong High Court issued a Decision on 30 September 2021 holding a shipowner’s Defences as an abuse of process in a case of unpaid crew wages. [HCAJ 76/2020] [2021 HKCFI 2961] [HCAJ 91/2020]
The English Court of Appeal issued a Judgment on 13/12/2017 dealing with a cargo damage claim of EUR2,654,238 and a charter hire claim of USD1,012,740 in connection with a NYPE charterparty. [2017 EWCA Civ 2107] [2017 WL 06343564] [Case No. A3/2016/4770]
The Hong Kong High Court issued a Judgment on 16 January 2019 dealing with the appeal of the wasted costs’ case reported by our Chans advice/214. [HCA1919/2016] [2019HKCFI127]
The Hong Kong District Court issued a Decision on 8 May 2020 upholding a summary judgment ordering one forwarder to pay outstanding airfreight charges of HK$440,000 to another forwarder. [DCCJ1202/2018] [2020HKDC307]
Does the law require forklift trucks to have the third party insurance of motor vehicles? The Hong Kong High Court’s Judgment [Magistracy Appeal No 241 of 1996] dated 2/5/1996 explained the legal principles to answer this question.
The Hong Kong High Court issued a Judgment on 3/8/2011 holding that a Korean shipping company could not rely on its Bill of Lading’s Korean jurisdiction clause to stay a Hong Kong legal action. [HCCL 13/2010]
Are Standard Trading Conditions (“STC”) equivalent to the House Bill of Lading (“HB/L”) terms or the House Air Waybill (“HAWB”) terms? We have been frequently asked this question by our forwarder clients.
The Hong Kong High Court issued a Decision on 29 January 2019 dismissing Changhong Group’s application for stay of the legal proceedings against it brought by the consignee and the insurer of the cargo on board the Sanchi. [HCAJ6/2018, 2019HKCFI263]
In our last issue of Chans advice/253, the Hong Kong District Court’s judgment dated 26 April 2022 mentioned a case authority of China Ocean v Mitrans Shipping. We would like to discuss this judgment dated 11 July 1995 of the Hong Kong Court of Appeal in our Chans advice this month. [1995 No. 71 Civil]
Remember our Chans advice/112 that the Hong Kong High Court held the Rotterdam terminal liable to pay the cargo value of €950,071.20 for the misdelivery of one container of Sony Play Stations? On 2/4/2013, Judge To of the Hong Kong High Court issued another Judgment holding that the forwarder was entitled to limit its liability to US$24,392 in accordance with its B/L terms. [HCAJ 106/2008]
The Hong Kong High Court issued a Decision on 22 January 2021 dealing with an appeal against a Small Claims Tribunal’s award concerning a dispute over a container terminal’s storage charges. [HCSA 44/2020] [2021 HKCFI 200]
The Hong Kong High Court issued a Judgment on 21/7/2014 discharging a Mareva injunction in relation to a cargo misdelivery claim of about US$12 million. [HCA 2368/2012]
