Summary
The first respondent, M/s Shanmughavilas Cashew Indus- tries, shipped 4445 bags of raw cashewnuts from East Africa to Cochin in the vessel Steliosm chartered by the appellant M/s British India Steam Navigation Co. Ltd., incorporated in England, pursuant to a contract of affreightment evidenced by three bills of lading. But only 3712 bags were delivered at Cochin, there being thus short landing of 733 bags.
The first respondent sued the appellant in the Court of the Subordinate Judge, Cochin, seeking damages. The Subordi- nate Judge decreed the suit with interest. The appellant's appeal to the High Court failed.In the courts below the main contentions of the appel- lant were that it was a mere charterer of the vessel; that there was a charterpar? executed between the first respond- ent and the agent of the owner in London; that as per clause 3 of the bill of lading the Court at Cochin had no jurisdic- tion and only English Courts had jurisdiction; and that as per the charterparty and clause 4 of the bill of lading the remedy of the first respondent, if any, was against the'owner who alone was liable and not against the appellant charterer of the vessel.The first respondent had denied that the appellant was only a charterer and not liable for the shortage. It had also denied that only English Courts had jurisdiction in the matter.885 Before this Court, on behalf of the appellant it was submitted that the appellant was an English company regis- tered in England carrying on business in England, and it did not carry on any business in India; as the carrier under clause 3 of the bill of lading, only the appellant had an option either to sue or be sued in England, or in Cochin, which was a port of destination, but the shipper had no option to sue at Cochin; in its written statement it was clearly stated that it had appeared under protest and with- out prejudice to the contention regarding jurisdiction which contention it had also pressed at the time of the argument, and, therefore, it could not be said to have submitted to the jurisdiction of Cochin court as it never made any sub- mission or raised any objection as to the fact of short landing; and that the High Court has held clause 3 of the bill of lading to be bad on two erroneous grounds, namely, that it offends section 28 of the Contract Act and that it gives an unfair advantage to the carrier which advantage is not given to the consignee.Allowing the appeal and remanding the case to the trial Court it was,HELD: (1) A bill of lading is the symbol of the goods, and the right to possess these passes to the transferee of the bill of lading, and the right to sue passes with it.]893C]Sewell v. Burdick, [1884] 10 App. Cases 74 (85, 104), re- ferred to.(2) A bill of lading is intended to provide for the rights and liabilities of the parties arising out of the contract of affreightment. If a consignee claims the goods under a bill of lading, he is bound by its terms. [904C](3) The property in the cargo passes to the consignee or the endorsee of the bill of lading but the contract whereun- der the consignment or endorsement is made has always to be taken into consideration. Thus the consignee or endorsee gets only such rights as its consignor or endorser had in respect of the goods mentioned in the bill of lading.[904C-D](4) The jurisdiction of the Court may be decided upon the parties themselves on the basis of various connecting factors, and the parties should be bound by the jurisdiction clause to which they have agreed unless there is some strong reason to the contrary. [897B; 899F](5) The first respondent is the consignee and holder of the bills of 886lading and ex facie should be bound by clause 3 thereof in regard to jurisdiction. 1892A](6) If clause 3 of the bills of lading is held to be binding on the first respondent the choice of law by the parties would also be binding. [892C](7) In the event of the English Court alone having the jurisdic- ion, the application of Indian statutes and the jurisdiction of the Indian court would be, to that extent, inapplicable.[892D](8) There may, however, be submission to the jurisdic- tion of an Indian Court by litigating in India. [896E]Sirdar Gurdyal Singh v. Rajah of Faridkote, [1894] AC 670 (684), referred to.(9) The question of jurisdiction in this case ought not to have been determined by the High Court on the basis of the provisions of section 28 of the Indian Contract Act in the absence of a specific provision making it applicable to transactions in international trade. [895F](10) Where the negotiation of a bill of lading is by the person who had a right to sue on it, mere possession of it does not enable the holder to sue any person who was not liable under it and not to sue another who was liable under it, to make good the claim. He cannot also sue at a place not intended by the parties when intention has been ex- pressed. [893E-F](11) Although a defendant who appears and contests the case on its merits will be held to have submitted to the juris- diction, an appearance merely to protest that the court does not have jurisdiction will not constitute submission, even if the defendant also seeks stay of proceedings pending the outcome of proceedings abroad. [896F-G]Williams & Glyn's Bank PLC v. Astro Dinamico Compania Navi- era S.A. & Anr. The Weekly Law Reports Vol. (1) 1984-438 and Rein v. Stain, [1892] 66 LT 469, referred to.(12) In the instant case, in the Memo. of appeal before the lower appellate court no specific ground as to jurisdic- tion was taken though there were grounds on non-maintain- ability of the suit. Even in the Special Leave Petition before this Court no ground of lack of jurisdiction of the courts below has been taken. The appellant has, therefore, to be 887held to have either waived the objection as to jurisdiction or to have submitted to the jurisdiction, in the facts and circumstances of the case. The defence that the suit was not maintainable in the absence of the owner of the ship could in a sense be said to have been on the merits of the case.[899B-C]13) Clause 3 of the bills of lading also contains the selection of law made by the parties. The contract is gov- erned by English law and disputes are to be determined according to English Law. [8991](14) As the law has been chosen, the proper law will be the domestic law of England and the proper law must be the law at the time when the contract is made, throughout the life of the contract, and there cannot be a "floating"proper law. [900D]Gienar v. Meyer, [1796] 2 Hy BI 603; Rex v. Internation- al Trustee for the Protection of Bondholders AG, [1937] AG 500 (529); Vita Food Products Inc. v. Unus Shipping Co.Ltd., [1939] AC 277 (289-90); James Miller & Partners Ltd. v. Whirworth Street Estates (Manchester) Ltd., [1970] AC 583 (603); Mackendar v. Feldia AG, [1966] 3 All E.R. 847; Com- pagnie d'Armement Maritime SA v. Compagnie Tunisienne de Navigation SA, [1971] AC 572: [1970] 3 All E.R. 71 and Acrow (Automation) Ltd. v. Rex Chainbelt Inc., [1971] 3 All E.R.1175, referred to.(15) The bill of lading is not the contract of af- freightment, for that has been made before the bill of lading was signed and delivered, but it evidences the terms of that contract. [901B](16) If certain clauses of the charterparty are referred to in the bill of lading those should be referred to in specific terms so as to bind the shipper and the consignee.A general reference may not be sufficient under all circum- stances. [902E]T.W. Thomas & Co. Ltd. v. Portsea Steamship Co. Ltd.,[1912] AC 1; Vita Food Products, Incorporated v. Unus Ship- ping Co. Ltd., [1939] AC 277 and Rex. v. International Trustee for the Protection of Bondholders, [1937] AC 500, referred to.(17) For the purpose of ascertaining the responsibility of a charterer in respect of the cargo shipped and landed, it would be necessary to know not only the stipulations between the shipper i.e. the owner of the cargo and the charterer evidenced by the bill of lading, but 888also those between the charterer and the owner of the ship.If the charter is by way of demise the problem would be simple inasmuch as the bill of lading will be purely between the shipper and the charterer. In cases of a 'voyage char- ter' or a 'time charter' one has to find out the actual terms of the charter to ascertain whether they operated as charter by demise or made the charterer only as an agent of the ship owner, and if so to what extent so as to ascertain the extent of privity established between the shipper and the ship owner as stipulated in the bill of lading. [905G-H;906A](18) Whether a charterparty operates as a demise or not depends on the stipulations of the charterparty. The princi- pal test is whether the master is the employee of the owner or of the charterer. [906G](19) It cannot be said that the bill of lading is not conclusive evidence of its terms and the person executing it is not necessarily bound by all its stipulations, unless he repudiates them on the ground that, as he did not know, and could not reasonably be expected to know, of their exist- ence, his assent to them is not to be inferred from his acceptance of the bill of lading without objection. [907D](20) Where there is a charterparty, the bill of lading is prima facie, as between the ship owner and an indorsee, the contract on which the goods are carried. This is so when the indorsee is ignorant of the terms of the charterparty, and may be so even if he knows of them. As between the ship owner and the charterer the bill of lading may in some cases have the effect of modifying the contract as contained in the charterparty, although, in general, the charterparty will prevail and the bill of lading will operate solely as an acknowledgement of receipt. [907E-F]See the full content of this document
Extract
British India Steam Navigation Co., Ltd. VS. Shanmughavilas Cashew Industries And Ors.
PETITIONER: BRITISH INDIA STEAM NAVIGATION CO., LTD.Vs.RESPONDENT: SHANMUGHAVILAS CASHEW INDUSTRIES AND ORS.DATE OF JUDGMENT13/03/1990BENCH: SAIKIA, K.N. (J)BENCH: SAIKIA, K.N. (J)SAWANT, P.B.CITATION: 1990 SCR (1) 884 1990 SCC (3) 481JT 1990 (1) 528 1990 SCALE (1)462ACT: Indian Bill of Lading Act, 1856: Bill of Lading--Negoti- ation of Contract of affreightment need not be expressed in writing; agreed jurisdiction of a court and choice of law binding on the parties; no submission to the jurisdiction of another court if appearance only to protest.The Indian Carriage of Goods by Sea Act, 1925 Contract of affreightment--' Voyage charterparty' 'time charterpar- ty'; responsibility of the charterer vis-a-vis the owner to be ascertained from the charterparty and the bill of lading.JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 764 (N) of 1975.From the Judgment and Decree dated 30.11.1973 of the Kerala High Court in A.S. No. 365 of 1969.R.F. Nariman, Mrs. A.K. Verma and D.N. Mishra for the Appellant.Ramamurthi (Not Present) for the Respondents.The Judgment of the Court was delivered by 889K.N. SAIKIA, J. The first respondent M/s. Shanmughavilas Cashew Industries, QuiIon purchased from East Africa 350 tons of raw cashewnuts which were shipped in the vessel SS Steliosm chartered by the appellant M/s. British India Steam Navigation Co. Ltd., incorporated in England, pursuant to a contract of affreightment evidenced by 3 bills of lading issued to the shipper for the 3 loads of cashewnuts. Out of 4445 bags containing the nuts carried in the said vessel only 37 12 bags were delivered at Cochin, there being thus short landing of 733 bags.The first respondent sued the appellant in suit No. O.S.18/1965 in the Court of the Subordinate Judge, Cochin seek- ing damages for the shortage of 733 bags of raw cashewnuts amounting to Rs.44,438.03. The suit having been decreed with interest @ 6% per annum from 17.7. 1964, for the sum total of Rs.46,659.93, the appellant preferred therefrom appeal A.S. No. 365 of 1969 in the High Court of Kerala which was pleased by its Judgments and decree dated 16.8. 1973 and 30.11. 1973, to dismiss the appeal and affirm that of the Subordinate Judge. Aggrieved, the appellant has preferred this appeal by special leave.In the courts below the main contentions of the appel- lant, inter alia, were that it was a mere chatterer of the vessel which was owned by S. Matas & Compnay c/o Lucas Matas& Sons, Piraeus, Greece; that there was a charterparty executed between the first respond...
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