EnglandJindal Iron and Steel Co. Ltd. and Others

v.

Islamic Solidarity Shipping Company Jordan Ltd. - The "Jordan II",

(H.L.) 25 November 2004 [2005] 1 Lloyd's Rep. 57; 2005 AMC 1

By a charterparty on the Stemmor form dated 4 December 1997 the owners chartered the

Jordan II

to TCI Trans Commodities A.G. for a voyage from Mumbai in India to Barcelona and Motril in Spain. Jindal Iran and Steel Company Limited and Hiansa S.A. were respectively the sellers and purchasers of 435 steel coils. The goods were shipped from Mumbai aboard the vessel as evidenced by two bills of lading on the Congenbill form, both dated 2 January 1998, which were issued on behalf of the shipowners at Mumbai. The bills of lading contained or evidenced contracts of carriage from Mumbai to Motril. The bills of lading named Jindal Iron and Steel Company Limited as the shippers and Hiansa S.A. as consignees and incorporated the voyage charterparty. The Hague-Visby Rules as enacted in Indian legislation were applicable to this shipment. They correspond to the draft Hague Rules as enacted in the United Kingdom by the Carriage of Goods by Sea Act 1924, which in material respects are the same as the Hague-Visby Rules scheduled to the Carriage of Goods by Sea Act 1971.

Clauses 3 and 17 of the charterparty, so far as material, provided:

3. Freight to be paid at the after the rate of US$ . per metric ton F.I.O.S.T. - Lashed/Secured/Dunnaged .

17. Shippers/Charters/Receivers to put the cargo on board, trim and discharge cargo free of expense to the vessel.

In February 1998 the cargo was discharged at Motril. The shippers and consignees alleged that the cargo was damaged by rough handling during loading and/or discharging, and/or inadequate stowage due to failure to provide dunnage, failure to secure the coils and/or stacking them so that the bottom layers were excessively compressed.

Shippers and Receivers commenced proceedings against the Shipowner in the High Court of Justice (Commercial Court) claiming damages. They denied that clauses 3 and 17 transferred the responsibility of the loading, stowing and discharge functions to them and maintained that, if this had been the case, such clauses would have been null and void pursuant to article 3 r. 8 of the Hague Rules.

After their contentions had been rejected by the Commercial Court and the Court of Appeal, Shippers and Consignees appealed to the House of Lords, the only issue before it being whether clauses 3 and 17 were invalidated by article 3 r. 8 of the Hague Rules.

Held, by the House of Lords, that:

[1] The rule, existing under the common law, that the duty to load, stow and discharge the cargo prima facie rested on shipowners, could be transferred by agreement to cargo interests.
[2] Although under the Practice Statement the House of Lords might be persuaded to depart from an earlier decision (G.H. Renton & Co. Ltd. v. Palmyra Trading Corporation of Panama [1956] 2 Lloyd's Rep. 379), where that decision has been demonstrated to work unsatisfactorily in the market place and produce manifestly unjust results, it has not been shown that this is the case for the rule whereby the shipowner may transfer responsibility for loading, stowing and discharge the cargo on the shipper and the consignee.
[3] Devlin J. adopted in Pyrene v. Scindia Navigation [1954] 1 Lloyd's Rep. 321 a principled and reasonable interpretation of article 3 r. 2 of the Hague Rules, and his interpretation was not based on any technical rules of English law, but was founded on a perspective relevant to the interests of maritime nations generally.http://www.comitemaritime.org/jurisp/ju_billading.html