Makros Hout BV v Agrosin Private Ltd, The Starsin [2003] UKHL 12; [2003] 1 Lloyd’s Rep 571

Facts

The defendants’ vessel the Starsin was time chartered to Continental Pacific Shipping, who operated a liner service from the Far East to Europe. Timber and plywood arrived seriously damaged by fresh water. The plaintiffs were purchasers and receivers of the cargo and sued the shipowners on the bill of lading contracts (for tort claims, see Chapter 2). The bills of lading were issued on printed forms bearing the name and logo of Continental Pacific Shipping. The printed form was designed to be signed by the master and to create a contract with the shipowner, but the bills were in fact signed by agents ‘As Agent for Continental Pacific Shipping (The Carrier)’. On the back of the bills, ‘in barely legible tiny print’, the terms included a clause dealing with the identity of the carrier (cl 33) and a demise clause (cl 35). Continental Pacific Shipping had authority to issue bills on behalf of the shipowners. The shipowners argued that the carriage contracts had been entered into by the charterers, who had become insolvent. The cargo owners claimed that the bills were contracts with the shipowners. The shipowners pointed out that where written words or clauses are added to a printed form, prima facie the added words have greater effect than printed ones. The cargo owners responded that parties were free to stipulate in printed conditions that written provisions added to a printed form were not to prevail over printed terms.

The terms printed on the bills of lading provided:

1 DEFINITIONS . . . (c) ‘Carrier’ means the party on whose behalf this Bill of Lading has been signed…

33 IDENTITY OF CARRIER The contract evidence by this Bill of Lading is between the merchant and owner of the vessel . . . and . . . the . . . shipowner only shall be liable for any damage . . . arising out of the contract of carriage . . .

35 If the ocean vessel is not owned or chartered by demise to the company or line by whom this Bill of Lading is issued (as may be the case notwithstanding anything that appears to the contrary) this Bill of Lading shall take effect only as a contract of carriage with the owner . . . as principal made through the agency of the said company or line who act solely as agent and shall be under no personal liability whatsoever . . .

Held

Lord Bingham: [6] The first and most crucial issue between the parties on these appeals is whether the contracts to carry these various parcels of cargo were made by or on behalf of the shipowner, as the cargo owners contend, or by or on behalf of CPS, the charterers of the vessel, as the shipowner contends. Put another way, the question is whether these were shipowner’s bills or charterer’s bills . . .

[14] . . . [A] very cursory glance at the face of the bill is enough to show that the master has not signed the bill. It has instead been signed by agents for CPS which is described as ‘The Carrier’. I question whether anyone engaged in maritime trade could doubt the meaning of ‘carrier’, a term of old and familiar meaning, but any such doubt would be quickly resolved by resort to the first condition overleaf in which the term is defined to mean the party on whose behalf the bill of lading has been signed, that is, the party contracting to carry the goods . . .

[15] I can well understand that a shipper or transferee of a bill of lading would recognise the need to consult the detailed conditions on the reverse of the bill in any one of numerous contingencies which might arise and for which those conditions make provision. He would appreciate that the rights and obligations of the parties under the contract are regulated by those detailed conditions. But I have great difficulty in accepting that a shipper or transferee of a bill of lading would expect to have to resort to the detailed conditions on the reverse of the bill (and to persevere in trying to read the conditions until reaching conditions 33 and 35) in order to discover who he was contracting with. And I have even greater difficulty in accepting that he would expect to do so when the bill of lading contains, on its face, an apparently clear and unambiguous statement of who the carrier is . . . I am further fortified in taking this view of market practice by noting its adoption (since 1994) in the ICC Uniform Customs and Practice for Documentary Credits . . . Article 23(v) makes plain that banks will not examine terms and conditions on the back of the bill of lading. The ICC’s Position Paper No 4 reiterates that the name of the carrier must appear as such on the front of the bill and that banks will not examine the contents of the terms and conditions of carriage . . .

[17] I would note, lastly on this point, that the decision of the Court of Appeal majority has not earned the approval of some academic commentators expert in this field . . .

[18] I agree with these opinions and would hold, in agreement with Colman J and Rix LJ, and for essentially the reasons which they gave, that the bill contained or evidenced a contract of carriage made with CPS as carrier.

Lord Hoffmann: [80] . . . The construction given to the bill of lading must be objective and uniform and, in the case of the identity of the carrier, determined by an unequivocal statement on the face of the document . . .

[85] . . . I think that if the carrier is plainly identified by the language on the front of the document, one never gets to the demise clause on the back.

Lord Hobhouse: [128] In my judgment the salient fact is that the signatures contradict the form. The signature is not neutral or equivocal, nor, for that matter is the form. Where the (original) parties . . . have expressly agreed that Container Pacific Shipping [sic] shall be the contracting party, they have implicitly agreed that inconsistent clauses will be overriden. The special words, typed or stamped, placed in the signature box demonstrate a special agreement. Effect must be given to that agreement. The contracts contained in these bills of lading are contracts with Continental Pacific Shipping . . .

[129] There are two observations to make about this conclusion. The first is that ‘shipped on board’ bills of lading . . . will normally have been preceded by some anterior contract . . . However, there is no evidence or finding on this aspect so it cannot assist either side on the appeal. The second observation is that the claimants are subsequent holders of the bills of lading by endorsement. Their contractual rights must be ascertained by reference to the bill of lading document itself.

Note

The works cited in para 17 of Lord Bingham’s judgment were Debattista, C, ‘Is the end in sight for chartering demise clauses’ (2001) Lloyd’s List; Gaskell, N et al, Contracts for the Carriage of Goods by Land, Sea and Air, Yates, D (Editor in Chief), London: Lloyds of London; Girvin, S and Bennett, H, ‘English Maritime Law 2000’ (2002) LMCLQ 76. The decision is considered in Girvin, S, ‘Himalaya clauses and tort in the House of Lords’ (2003) LMCLQ 311.