PRIMINDS SHIPPING (HK) CO LTD V NOBLE CHARTERING INC (THE MV “TAI PRIZE”)

[2020] EWHC 127 (Comm), Queen’s Bench Division, Commercial Court, His Honour Judge Pelling QC (sitting as a High Court Judge), 31 January 2020

Contract – Cargo damage – Unclaused bill of lading – Attribution of words “clean on board” in bill of lading – Implication of terms

The claimant voyage charterer appealed under section 69 of the Arbitration Act 1996 in respect of three questions of law arising out of a final award by which it had been ordered to pay the defendant disponent owner's claim in the sum of US$500,000 plus costs and fees. In the arbitration, the disponent owner had successfully claimed against the voyage charterer for a contribution towards the sum it had had to pay the shipowner, which in turn had been ordered to pay the receiver of the goods. The background was that the disponent owner had, by a recap voyage charterparty dated 29 June 2012, agreed to let the MV Tai Prize to the claimant for the carriage of a cargo of heavy grains, soya and sorghum in bulk from Brazil to the People's Republic of China. The vessel arrived at Santos in July 2012 and loaded a cargo of Brazilian soya beans. A bill of lading in the 1994 edition of the Congenbill form was offered for signature by or on behalf of the master on 29 July 2012. It identified the port of discharge as "Main Port(s) of South China". Under the heading “Shipper's description of Goods” the cargo was described as being “63,366.150 metric tons Brazilian Soyabeans Clean on Board Freight pre-paid”. The bill of lading was executed by agents on behalf of the master without any reservations stating that the cargo had been: “SHIPPED at the Port of Loading in apparent good order and condition on board the Vessel for carriage to the Port of Discharge ... Weight, measure, quality, quantity, condition, contents and value unknown ...”. It incorporated the Hague Rules. The vessel arrived at the port of discharge (Guangzhou) and commenced discharge on 15 September 2012. On 17 September, discharge from two of the vessel's holds was suspended “Due to charred Cargo Found”. The remaining cargo was discharged without complaint and the cargo in the affected holds was discharged but the receiver maintained that the cargo in those holds had suffered heat and mould damage. In the arbitration between the disponent owner and the voyage charterer, the arbitrator had found inter alia that the cargo had been loaded in a pre-damaged condition and that the damage was not reasonably visible to the master, crew or loading surveyors. As the contract of affreightment contained in or evidenced by the bill of lading was with the shipowner, not the claimant, there was no express provision in support of the disponent owner’s claim. The arbitrator had held that the shipper as voyage charterer’s agent had impliedly warranted the accuracy of any statement as to condition contained in the bill of lading and had impliedly agreed to indemnify the defendant against the consequences of inaccuracy of the statement; and that the statement “clean on board” in the bill of lading was a statement by the shipper as agent of the voyage charterer. The voyage charterer appealed on three questions of law, arguing notably that the arbitrator had erroneously conflated information provided by the shipper with the standard form wording contained in the bill of lading, which invited the master to carry out his own assessment of the apparent condition of the cargo; and that the standard wording could not give rise to any representation by the claimant or for that matter the shipper and should not give rise to any implied warranty or indemnity against inaccuracy.