Case No:2000 Folio 1292
 Neutral Citation Number: [2002]EWHC 1268(Com)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 25/6/02

Before:

MR. NIGEL TEARE QC
SITTING AS A DEPUTY JUDGE OF THE QUEEN’S BENCH DIVISION
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Between:

JINDAL IRON AND STEEL CO LTD
‑ TCI TRANS COMMODITIES AG
HIANSA SA
Claimants
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ISLAMIC SOLIDARITY SHIPPING COMPANY JORDAN INC
ISLAMIC SOLIDARITY JORDAN INC
Defendants
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Simon Rainey QC and Nicholas Craig (instructed by Jackson Parton) for the Claimants

Timothy Young QC and Sudhanshu Swaroop (instructed by More Fisher Brown) for the
Defendants

Hearing dates: 27 and 28 May 2002
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Judgment

INTRODUCTION

1.	This action, like many in this Court, concerns alleged damage to the cargo carried on board a ship. The First Defendants are the owners of the vessel JORDAN II. (The name of the Second Defendants is, apparently, simply a shorthand name for the First Defendants.) They chartered the vessel to the Second Claimants on the terms of a Stemmor Voyage Charter Party (1983) Form dated Hamburg 4 December 1997 for the carriage of a cargo of steel coils from India to Spain. The First Claimants were the shippers of the cargo of steel coils loaded on board the vessel in Mumbai for carriage to Spain and the Third Claimants were the receivers of the cargo in Spain. Bills of lading numbered 1 and 2 on the Congenbill form were issued dated Mumbai 2 January 1998. 

2.	The Claimants allege that the cargo was damaged by defective loading, stowage, lashing, securing, dunnaging, separation and discharge of the cargo. The Second Claimant sues under the charterparty and the First and Third Claimants sue under the contracts of carriage contained in or evidenced by the bills of lading. The Defendants contend that pursuant to the terms of the charterparty and the contracts of carriage contained in or evidenced by the bills of lading that they are not responsible for those cargo operations (save for that of separation) but that if they are so liable under the bills of lading to the First and Third Claimants they can recover the amount of that liability from the charterers, the Second Claimants. Preliminary issues were ordered by Morison J. to determine the validity of these contentions. 

3.	The issues ordered to be determined are these:

(I)   Whether on a true construction of (a) the charterparty dated 4th December 1997 and (b) the contracts of carriage contained in or evidenced by the bills of lading numbered 1 and 2 dated 2nd January 1998 the Defendants are under any liability for any damage to the cargo caused as a result of loading, stowage, laying of dunnage, securing or discharging.

(ii) If the Defendants are liable to either the First Claimants or the Third Claimants whether the Second Claimants are liable to indemnify the Defendants against such liability.

4.	These preliminary issues raise not only questions of construction but also a question as to whether the long standing observation of Devlin J. in Pyrene v Scindia [1954] 2 QB 402 that Article III r.2 of the Hague Rules does not oblige the carrier to perform the functions listed in Article III r.2 but only obliges the carrier to perform “properly and carefully” those functions which he has agreed to perform is the correct construction of Article III r.2.

THE CHARTERPARTY 

5.	The charterparty was on the Stemmor form. It was designed for the carriage of ore cargoes but on this occasion it was used for the carriage of steel coils. According to clause 43 JORDAN II was a 1988 built Brazilian SD 14 type, 140 m. in length and 20 m. in beam, with 5 holds and 5 hatches. Derricks served the holds and the dimensions of the hatches and holds were set out. The cargo was described in additional typed clause 46 in these terms:

5,500 metric tonnes, 5 percent more or less in Charterers’ option, Galvanised Steel coils (maximum pieceweight 12 tons), as full or part cargo in Owners’ option. Cargo under this charterparty to be separated by vessel’s holds. In case same is not possible, any artificial separation, if necessary, to be arranged by Owners at their time risk and expense. Coils are 6-12 tons in weight with average about 9 tons. Height 1.250 metres ‑ inner diameter 0.5 metres/outer diameter 1.35 metres.

6.	Clause 3 was entitled in the margin “Freight” and provided as follows (the first 10 words being in the original printed form):

Freight to be paid at and after the rate of US$ .... per metric ton F.I.O.S.T. ‑ lashed/secured/dunnaged ‑ …

7.	Clause 7 was entitled “Winch Clause” in the margin. The standard form clause was deleted and in its place was the following typed clause:

Charterers to have full use of all vessel’s gear to assist in loading and discharging cargo. Vessel’s gear should only be considered as supplementary to the shore gear. Shore winch/cranemen to be used at all times.

8.	Clause 17 provided (in its original printed form):

Shipper/Charterers/Receivers to put the cargo on board, trim and discharge cargo free of expense to the vessel. Trimming is understood to mean levelling off the top of the pile and any additional trimming required by the Master is to be for Owners’ account.

9.	By additional clause 44 the charterparty was expressly governed by English law. By additional clause 52 the charterparty incorporated the Hague-Visby Rules.

10.	Mr.Simon Rainey QC submitted on behalf of the Claimants that whilst clause 3 was effective to transfer to the charterers the obligation to pay for the cargo operations of loading, stowing, lashing, securing, dunnaging and discharging the cargo there was no clause in the charterparty that transferred to the charterers responsibility for the proper performance of those operations. Mr.Timothy Young QC submitted on behalf of the Defendants that clauses 3 and 17 effectively transferred to the charterers not only the obligation to pay for those activities but also responsibility for the proper performance of them.

11.	The starting point for construing the charterparty is that at common law the obligation is upon the shipowner to load, stow and discharge the cargo and that if this responsibility for the proper performance of those obligations is to be transferred to the charterer clear words are required. This was common ground. It was submitted on behalf of the Claimants that any such transfer must not only be clear but must also be unambiguous. This submission was based upon the Scottish case of Ballantyne v Patton and Hendry [1912] SC 246. That case concerned a charterparty which provided that “Cargo to be loaded, stowed and discharged free of expense to steamer, with use of steamer’s winch and winchmen if required.” It was held that this clause was not effective to transfer responsibility for the cargo operations to the charterer. Its present relevance is that Lord Guthrie said that: 

It seems to me that the respondents only need to suggest a reasonable interpretation of this clause which would be consistent with the common law duty, because if the common law is to be altered by the terms of the charter-party, that must be done by a clause which admits of no other reasonable interpretation.

12.	It was submitted that this illustrated the need not only for clarity but also for unambiguity in any wording said to be effective to transfer responsibility from the owners to the charterers. However, Lord Guthrie did not say that unambiguity was an additional requirement to clarity. If a clause is truly ambiguous, rather than being merely difficult to construe, it will not be clear and so will not effect a transfer of responsibility. In my judgment the claimed need for unambiguity adds nothing to the need for clarity.

13.	It was also submitted on behalf of the Claimants that a clause may effect transfer of one facet of the owner’s obligation to load, stow and carry, for example the duty to arrange for the work to be done or the duty to pay for it but not responsibility for the proper performance of the work. This submission was based upon observations of Sir Johnn Donaldson MR in the Filikos [1983] 1 Ll.Rep. 9 at p.11 where he said:

... at common law the task of loading from ship’s rail, stowing and discharging overside is the sole responsibility of the shipowner. However either or both of the duties of (a) arranging for these processes to be carried out and (b) paying for them to be carried out may be transferred by contract to the charterers. So too can liability for breach of the duty of care in carrying out these processes, whether or not either or both the duties of arranging and paying for their performance have been so transferred.

14.	This submission was not challenged but it was said that unless there is good reason to differentiate between the various aspects of the duty the Court, when construing a charterparty, should endeavour to reach a conclusion whereby there was a unity of the various aspects of the duty in either the owner or the charterer. This submission was based upon Brys & Gilsen v Drysdale [1920] 4 Ll.Rep.24. That case concerned a provision in a charterparty which stated that “the Charterers or their agents are to provide and pay a stevedore to do the stowing of the cargo under the supervision of the master.” Greer J. held that those words transferred to the charterer the duty of stowing the cargo in the way it ought to be stowed. For present purposes the following passage was relied upon:

It would be an odd state of things if one were to hold that a shipowner who has no contract whatever with the stevedore and who cannot say to the stevedore: You have broken your contract with me, and therefore I will not have you any longer in my vessel; and who has no control over what is to be paid to the stevedore, should be responsible for the failure of the stevedore to do his duty.

15.	I do not consider, in the light of the observation of Sir John Donaldson MR in the Filkos, that there is any presumption in favour of a unity of the various facets of the obligation to perform cargo work. If there were any such presumption I would expect it to have been mentioned in the Filikos. The consideration mentioned by Greer J. in Brys & Gilsen v Drysdale may, depending upon the circumstances of a case, be a relevant consideration to be taken into account when construing a charterparty but in any particular case there may be countervailing considerations apparent either from the words used or from the factual context. In this regard I take comfort from the circumstance that the editors of Scrutton on Charterparties 20th.ed (1996) at p.175 submit that no general rule can be derived from the cases and that probably each case depends upon its own circumstances.

16.	I return to the charterparty in the present case. Attention was directed in particular to clauses 3 and 17. The charterparty must of course be construed as a whole and so it is necessary to consider the effect of both clauses together. Clause 3 provides that freight was to be paid “F.I.O.S.T. – lashed/secured/dunnaged”. It was common ground that the acronym meant “free in and out stowed and trimmed”. It was also common ground that those words meant (at least) that the shipowner did not have to pay for the work of loading, stowing, including the work of lashing, securing and dunnaging, and discharging the cargo. With a cargo of steel coils it was common ground that there would be no trimming to be done. The words “lashed/secured/dunnaged” in clause 3 appear to me to reflect the services which this cargo of steel coils required in place of trimming.

17.	Unlike clause 3, clause 17 states expressly that certain activities are to be carried out by the “Shippers/Charterers/Receivers”. Clause 17 was part of the original printed form of the Stemmor charterparty. It encompasses all cargo operations which would be required by a cargo of ore, namely, putting it on board, trimming it and discharging it. All of these cargo operations were to be performed by the “shippers, charterers, receivers”.

18.	In Canadian Transport v Court Line [1940] AC 934 the charterparty provided that “the charterers are to load, stow and trim the cargo at their expense under the supervision of the master.” It was held that those words were effective to transfer responsibility for those operations to the charterers; see at p.943 per Lord Wright. The words imported that the charterers “[took] into their hands the business of lading and stowing the cargo.” A contrary decision was reached in Ballantyne v Paton & Hendry (see above) but in that case it appears from the judgment of Lord Guthrie that it was not argued that the words “cargo to be loaded stowed and discharged free of expense to steamer” transferred responsibility to the charterers. The argument was as to the effect of the words “with use of steamer’s winch and winchmen if required”. I shall therefore construe clause 17 with the assistance of Lord Wright’s reasoning in Canadian Transport v Court Line.

19.	I consider that the intended effect of clause 17 in a charterparty concerning an ore cargo was that the charterers were to take into their hands the business of putting an ore cargo on board, trimming and discharging it and thereby the responsibility for the proper performance of those tasks was transferred to them. There was no discussion before me as to why shippers and receivers were mentioned as well as charterers. I consider that they were mentioned because the charterers might well arrange for some or all of the cargo operations to be carried out on their behalf by the shippers or receivers. In the context of the charterparty it would not make sense to suggest that they were to take the cargo operations into their own hands because they were not party to the charterparty.

20.	It is common ground that the express definition of trimming in the second sentence of clause 17 makes no sense in the context of a cargo of steel coils. I agree that the second sentence cannot have been intended by the parties to have had any effect because there would be no “levelling off the top of the pile” of steel coils. It was an apt definition in the context of an ore cargo but not in the context of a cargo of steel coils. However, a cargo of steel coils, like a cargo of ore requires to be put on board and discharged. I consider that clause 17 transfers responsibility for the proper performance of these activities to the charterers. Further, clause 3 shows that the parties gave attention to the cargo activities which this cargo would require instead of trimming once it was in the hold, namely, lashing securing and dunnaging. My first impression on reading clauses 3 and 17 together was that the reference to trimming in the first sentence of clause 17 should be read as a reference to the activities of lashing securing and dunnaging the cargo which the parties had stated that this cargo required instead of trimming in clause 3. So read clause 17 is effective also to transfer responsibility for the proper performance of those activities to the charterers. 

21.	Mr. Rainey did not accept that this was the true construction of the charterparty. Firstly, it was submitted that clause 17 could not be applied at all to this charterparty because it was intended to apply to an ore cargo and this was a cargo of steel coils which require quite different treatment than ore. I accept that the definition of .trimming in the second sentence of clause 17 cannot have been intended to have had effect because it simply makes no sense in the context of a cargo of steel coils. I do not accept that the first sentence of clause 17 can be ignored because a cargo of steel coils like a cargo of ore requires to be loaded and discharged. Secondly, it was submitted that clause 17, if effective, was only effective to transfer to the charterers responsibility for the proper performance of loading (putting the cargo on board) and discharging. Responsibility for the proper performance of cargo operations which were required after loading i.e. stowing, lashing, securing and dunnaging the cargo was not transferred. Those activities were not mentioned in clause 17. The reference to trimming in the first sentence could not be read as a synonym for those activities because the second sentence defined trimming in a way which could not apply to a cargo of steel coils. Mr. Rainey therefore submitted that whilst the parties had agreed in clause 3 that the charterers would be liable for the cost of these operations they had not agreed to transfer responsibility for the proper performance of those operations to the charterers because they had not added them to clause 17. Thus it was said that the shipowners had agreed to be responsible for the proper performance of stowing, lashing, securing and dunnaging the cargo but not to pay for the cost of that work.

22.	Reliance was placed on the decision of the Court of Appeal in Blandy Brothers v Nello Simoni [1963] 2 Ll.Rep.393. That case concerned a claim by agents against charterers for reimbursement of expenses incurred in connection with the stowage of cargo. The agents acted as agents for both shipowners and charterers and were aware that the terms of the charterparty provided that the freight was f.i.o.s. and that the cargo “was to be put on board stowed and discharged free of expense to the vessel.” It was contended on behalf of the charterers that the agents had incurred the costs of stowage without any instructions to do so and so were not entitled to reimbursement of those costs. The Court of Appeal held that the agents were entitled to reimbursement of their costs from the charterers. It was within the ordinary authority and duty of an agent of the shipowner to arrange and pay for the stowage of cargo. The agents were entitled to reimbursement of those costs but in circumstances where they knew that as between the shipowner and charterer that liability for the payment of those costs had been transferred to the charterer they were entitled to reimbursement from the charterer. It was submitted by Mr. Rainey that the Court of Appeal held that the effect of the charterparty terms was that whilst responsibility for payment of the costs of stowage was transferred to the charterers responsibility for the actual work of stowage remained with the owners. Reliance was placed on the judgments of Willmer LJ at p.402, of Pearson LJ at p.404 and of Diplock LJ at p.405. These passages appear to have the effect for which Mr. Rainey contended; see in particular the judgment of Pearson LJ at p.404. However, the Court of Appeal’s observations concerning the owners’s duty to stow were, it seems to me, directed to the owners’ duty to stow under the contracts contained or evidenced by the bills of lading. In these circumstances it was not necessary for the Court of Appeal to address in terms the question whether as between owners and charterers responsibility for doing the work of stowage had been transferred to the charterers and it did not do so. In these circumstances Mr. Rainey cannot, in my judgment, derive much support from the case.

23.	Mr.Young did not accept that clause 3 dealt only with the transfer of who was liable to pay for the costs of loading, stowage and discharge. He submitted that the acronym F.I.O.S.T. was effective not only to transfer liability to pay for the costs of loading, stowing and discharge but also to transfer responsibility for proper performance of those obligations. Some F.I.O.S.T. terms expressly provide that the charterers will perform cargo operations free of risk liability and expense to the owners eg the F.I.O.S.T. terms in the Gencon form of charterparty set out in Cooke on Voyage Charters 2nd ed. at p.323. Such terms are clearly apt to transfer liability for the proper performance of cargo operations to the charterers. Mr.Young was not able to refer me to any authority which indicated that the acronym itself is always understood without more as bringing about a transfer of responsibility for the proper performance of loading, stowing and discharging. He referred me to an observation of Hobhouse J. in Ets.Soules v Intertradex [1991] 1 L1.Rep.378 at p.382 as to the meaning of “free out” in a contract of sale. But Hobhouse J. was not saying how that phrase is always understood in a charterparty. In CHZ Rolimpex v Eftavrysses (the Panaghia Tinnou) [1986] 2 L1.Rep.586 a charterparty clause contained the words free in and out stowed but also said that the charterers were to load and stow the cargo free of any expense to 	the owners. Thus, as Steyn J. said at p.589-590, the decision in Canadian Transport v Court Line was directly in point. It was not a decision on the meaning of the acronym F.I.O.S.T. standing alone.

24.	Had clause 3 stood alone it would have been arguable that the charterparty would not have contained clear words transferring responsibility for the proper performance of loading, stowing, lashing, securing, dunnaging and discharging the cargo to the charterers. It is in a freight clause and whilst it is apt to transfer liability for the expense of cargo operations it could be said not clearly to transfer responsibility for the proper performance of cargo operations; see in this respect the South African case of the Sea Joy [1998] (1) SA 487. However, it is not necessary for me to determine the effect of clause 3 had it stood alone because it does not stand alone. 

25.	Clause 3 stands with clause 17 which, for the reasons I have given, is effective to transfer responsibility for the proper performance of the duties there listed. The crucial question, to my mind, is whether the parties’ identification in clause 3 of the activities required by a cargo of steel coils after it has been placed or stowed in the hold can be read into clause 17 in place of or as a definition of the obligation to trim. Mr. Rainey submits that it cannot be so read into clause 17. The parties could have inserted the activities of lashing, securing and dunnaging into clause 17 but they did not do so. This indicated that whilst the responsibility for the proper performance of putting the cargo on board and discharging it was transferred to the charterers responsibility for the proper performance of lashing, securing and dunnaging was not so transferred. 

26.	In construing clauses 3 and 17 I have borne in mind a passage in Voyage Charters 2nd.ed. to which Mr.Young referred me at p.33 that “all words and phrases depend upon their context for their meaning and must not be construed in a vacuum.” The context in which the obligation to “trim” is found in clause 17 is a charterparty for the carriage of steel coils which, it is common ground, do not require trimming but require other services which the parties have listed in clause 3, namely, lashing, securing and dunnaging. Bearing that context in mind it seems to me that the obligation to trim in clause 17 was intended by the parties to mean the obligation to lash, secure and dunnage.

27.	Mr. Rainey objects that the words “lashed/secured/dunnaged” in clause 3 define what the parties understood by stowed rather than trimmed, i.e. the S rather than the T in F.I.O.S.T., and therefore cannot be used to define the obligation to trim in clause 17 which should simply be ignored because it is meaningless in the context of a cargo of steel coils. It seems to me that the words describe the cargo operations required after the cargo had been placed in the holds. In this sense they were part of the stowage but they were also the operations required in place of trimming. I therefore adhere to the view that they can be used to explain what the parties understood by the obligation to trim in clause 17.

28.	Once the obligation to trim in clause 17 is construed as meaning to lash, secure and dunnage clause 17 therefore reads as follows: “Shippers/Charterers/Receivers to put the cargo on board, lash, secure and dunnage and discharge the cargo free of expense to the vessel.” It is clear that so read, and for the reasons I have given, responsibility for those cargo operations is transferred to the charterers.

29.	It is common ground that in so far as any damage was caused by a failure to separate the cargo artificially as provided in clause 46 this was a duty for the proper perfomance of which the defendants were responsible.

30.	I accordingly conclude that under the charterparty responsibility for the proper performance of the duty to load, stow, lash, secure , dunnage and discharge the cargo was transferred from the owners to the charterers and accordingly the Second Claimants cannot claim in respect of damage caused by those activities.

THE BILL OF LADING

31.	The bills of lading which were issued after the cargo had been loaded on board the vessel at Mumbai on 2 January 1998 were on the Congenbill form. They provided that freight was payable “as per Charterparty dated 4.12.97”. Accordingly the freight provision in clause 3 of the charterparty (F.I.O.S.T. ‑ lashed/secured/dunnaged) was incorporated into the bill of lading. On the reverse of the bills it was provided that “all terms and conditions, liberties and exceptions, of the Charterparty dated overleaf, are  herewith incorporated. The Carrier shall in no case shall be responsible for loss of or damage to cargo prior to loading or after discharging.” It is accepted by the Claimants that clause 17 of the charterparty is germane to the shipment, carriage or delivery of the  cargo and therefore prima facie is incorporated into the bills of lading. There is also no  dispute that by reason of the Carriage of Goods by Sea Act 1971 and Article X(c) of the Hague-Visby Rules the Hague-Visby Rules applied compulsorily to the contracts of carriage contained or evidenced by the bills of lading.

32.	In the context of the charterparty I have held that the effect of clauses 3 and 17 read together is to transfer responsibility for the proper performance of those operations to the charterers. The question which now arises is what effect they have when incorporated into the bills of lading.

33.	It is necessary to treat clauses 3 and 17 as if they have been set out in full in the bill of lading and consider whether they make sense in the context of the bill of lading. Thus, if  they are inconsistent with an express term of the bill of lading they must be rejected. Similarly, if they are inapplicable to the bill of lading in a commercial sense they must be rejected.

34.	Mr. Rainey, in his written outline argument, submitted that clauses 3 and 17 were inconsistent with Article III r.2 of the Hague Vusby Rules which were expressly part of the bill of lading. However, this argument assumed that Article III r.2 placed an obligation upon the carrier to load, stow, carry and discharge the goods rather than defining the standard to which the carrier must perform those obligations if he has undertaken to perform them. This is in effect the question raised by the argument based upon Article III r.8. I will deal with it under that heading but for present purposes I shall assume, in accordance with the dicta of Devlin J. in Pyrene and Scindia [1954] 2 QB 402 that Article III r.2 only sets out the standard to which the carrier must perform those duties which he has undertaken to perform. The emphasis of Mr. Rainey’s oral argument was different. He submitted that the effect of the incorporation was commercially repugnant to the bill of lading and made no sense. 

35.	Mr. Rainey made 4 particular points. Firstly, it was said that clause 17 was commercially repugnant to the bill of lading because it sought to transfer from the carrier his normal responsibility for the proper performance of cargo operations. This point begs the question as to what responsibilities the carrier has undertaken. Secondly, it was said that if the clause can be read in to the bill of lading only such part of it as makes commercial sense for a cargo of steel coils should be read in. On this basis only the parts relating to putting on board and discharging the cargo should be read in because the part relating to trimming the cargo makes no commercial sense in the context of a cargo of steel coils Thirdly, it was said that the reference to trimming when read into the bill of lading was ambiguous and therefore insufficiently clear to effect a transfer of responsibility for the proper performance of the operations of stowage, lashing, securing and dunnaging. I consider that both the second and third points fail for the same reasons that I have given in relation to the same argument under the charterparty. Clauses 3 and 17, when read into the bill of lading, must be read together. When so read the reference to trimming in the first sentence of clause 17 should clearly be understood in the sense in which it is understood in clause 3.

36.	The fourth point was that when clause 17 was read into the bill of lading the reference to “shippers/charterers/receivers” could only have the effect of transferring to the shippers or receivers those cargo operations which the shippers or receivers could sensibly be required to perform. Thus it was said that the clause could not be interpreted as transferring to the receivers, the Third Claimants, responsibility for the proper performance of stowage, lashing securing and dunnaging.

37.	Mr.Young’s approach to the construction of clauses 3 and 17 when read into the bill of lading accepts in part Mr. Rainey’s fourth point. He submits that responsibility for proper performance of the obligation to load and stow is transferred to the shipper and that responsibility for the proper performance of the obligation to discharge is transferred to the receiver. In circumstances where (as is alleged in the present case) damage was caused by poor stowage and a claim is advanced by the receiver against the shipowner he submits that the shipowner has a defence under Article IV r.2(i) on the grounds that the damage was caused by an act of the shipper.

38.	My approach to this difficult issue is as follows. When clauses 3 and 17 are read together and are written out into the contract of carriage contained or evidenced by the bill of lading they provide that:

Shippers/charterers/receivers to put the cargo on board, lash, secure and dunnage and discharge the cargo free of expense to the vessel.

39.	The reference to shippers and receivers makes obvious sense in the context of a contract of carriage contained in or evidenced by the bills of lading because the person to whom the bills of lading will be issued at the port of loading will be the shipper and the holder of the bills of lading at the port of discharge will be the receiver. (There was no discussion before me as to the meaning of the reference to charterers in this context but if the shippers or the receivers were the charterers their relationship with the shipowner would be governed by the charterparty.) The clause provides that the shippers and receivers are to put the cargo on board, lash, secure and dunnage the cargo and discharge it. Thus those activities are to be performed by the shippers and receivers. The words of the clause import that the shippers and receivers are to take into their own hands the business of loading, stowage and discharge. That is a clear indication that responsibility for the proper performance of those activities is transferred to the shippers and receivers. However, it makes no sense to transfer responsibility for cargo work at the port of loading (loading, stowage, lashing, securing and dunnaging ) to the receivers because the receivers are not there to do it and at the time of loading may be wholly unaware of the terms of the bills of lading. For this reason I accept Mr. Rainey’s fourth (alternative) submission that responsibility for the proper performance of the cargo work at the port of loading has been transferred to the shippers and responsibility for the cargo work at the port of discharge has been transferred to the receivers. Where a claim under the bill of lading is brought by the receivers in respect of damage done during cargo work at the port of loading the shipowner is not able to say that responsibility for that damage had been transferred to the receiver but he can say that he, the shipowner, had not undertaken to carry out the cargo work at the port of loading or at the port of discharge and that any damage done during loading or stowage was caused by an act or omission of the shipper for which, pursuant to Article IV r.2(i), he was not responsible. Conversely, where a claim is brought by the shipper in respect of damage done during discharge, the shipowner will have a defence if he can prove that the damage was by a cause arising without the actual fault or privity of the carrier or without the fault of neglect of the agents or servants of the carrier for which, pursuant to Article IV r.2(q), he was not responsible.

40.	It follows, in my judgment, that in the present case the First and Third Claimants, the shippers and receivers, cannot claim under the bill of lading for damage to the cargo caused by poor loading, stowage or discharge so long as the alleged damage was not caused by the acts or omissions of the Defendants, their servants or agents. As to this latter point there is an issue of fact because the Claimants allege by an amended pleading that the damage was caused by the master and/or chief officer and/or servants and/or agents appointed by the Defendants and/or for whom they were 	responsible and the Defendants allege by an amended pleading that the damage was caused by the acts or omissions of the agents or servants of the Claimants and/or without the fault privity or neglect of the Defendants or their agents or servants.

41.	Several cases were cited in argument in relation to this question but none is of particular relevance because the terms in those cases were different from those in the present case. The first in time was Balli Trading v Afalona Shipping (the Coral) [1993] 1 L1.Rep.1. In that case the charterparty provided that the “charterers” were to load stow and trim and discharge the cargo at their expense. Bills of lading incorporated the terms of the charterparty. The shipowners, when sued under the bills of lading, claimed that they had divested themselves of the duty to load the cargo and that responsibility for the proper performance of the duty to load had been transferred to the charterers or, by verbal manipulation, to the shipper or subsequent holders of the bills of lading. On an application by the plaintiffs for summary judgment Sheen J. held that there was no justification for substituting shippers for charterers in the relevant clause when it was incorporated into the bill of lading and that the clause was not effective to relieve the shipowners of their duty to stow the goods under the bill of lading. On appeal it was held that the plaintiffs had not shown the shipowners’ argument to be so clearly unarguable that there was no defence to the claim and therefore granted leave to defend. In the circumstances the Court did not express an opinion on the proper construction of the bill of lading. The clause in the present case contains a reference to the shipper and receivers and so the question of construction is different and in particular there is no need for verbal manipulation of the charterparty term when incorporated into the bill of lading. 

42.	The next case is A.I.C.C.O.SA v Forggensee Navigation Co.Ltd. (The Polar) [1993] 2 L1.Rep.478. In that case there was a clause in a charterparty which stated that the vessel was “to be loaded, stowed and discharged by Shippers, Charterers,  Receivers Stevedores free of risk and expense to the vessel.” A further clause provided that the master was to take care that the stowage should not harm the normal and efficient ventilation and/or cooling system. Those clauses were incorporated into the bill of lading. The shipowners originally contended that they were not responsible for stowage but later accepted that they were responsible. Clarke J. held that the concession was correctly made. There is no indication of the reasoning which led Clarke J. to express his view that the concession was rightly made. It may have been connected with the clause which stated that the master had to take care that the stowage would not harm the ventilation or cooling system. In any event I do not consider that I can derive any assistance from this case. 

43.	The third case was a South African case, the Sea Joy [1998] (1) SA 487. In that case a bill of lading had the letters FIOS on the face of the bill of lading in the place reserved for recording particulars as to freight details. It was held that was not sufficient to transfer from the owners responsibility for the proper discharge of the duty to load and stow. This case might have been of assistance had only clause 3 been incorporated into the bill of lading in the present case; but clause 17 was also.

44.	For the reasons which I have endeavoured to express I have concluded that, subject to Mr. Rainey’s next submission, the shippers, the First Claimants, do not have a claim against the Defendants under the contract of carriage contained in or evidenced by the bills of lading for damage caused by poor loading, stowage and discharge so long as the alleged damage was not caused by the acts or omissions of the Defendants their servants or agents and nor do the receivers, the Third Claimants.

THE HAGUE RULES POINT

45.	Mr. Rainey’s submission is that if, as I have held, the incorporation of clauses 3 and 17 into the bills of lading have the effect that the defendants are not liable under the bills of lading for damage by poor loading, stowage and discharge those clauses relieve the defendants from liability arising from negligence, fault or failure in the duties provided in Article III r.2, and are therefore null and void and of no effect pursuant to Article III r.8 of the Hague-Visby Rules. 

46.	This submission raises a question that had been thought to have been settled by the approval of the House of Lords in Renton v Palmyra [1957] AC 149 of dicta of Devlin J. in Pyrene v Scindia [1954] 2 QB 402. It is, I think, fair to say that the law reports contain observations by judges of the highest authority in shipping law that Article III r.2 of the Hague Rules, by reason of those two cases, does not oblige the carrier to load, stow, carry and discharge the goods properly and carefully but only obliges the carrier to do so if the carrier has agreed to perform those functions; see for example Blandy Brothers v Nello Simoni [1963] 2 L1.Rep.393 at p.405 (per Diplock LJ), Ismail v Polish Ocean Lines [1976] 1 QB 893 at p.900 (per Lord Denning MR), The Arawa [1977] 2 Ll.Rep.416 at p.424 (per Brandon J.), The Strathnewton [1983] 1 L1.Rep. 219 at p.222 (per Kerr LJ) and The Panaghia Tinnou [1986] 2 L1.Rep.586 at p.589 (per Steyn J.).

47.	It is also fair to say that Mr. Rainey was not at all troubled by this wealth of dicta against his submission. He argued that there was no decision which obliged this Court to follow the dicta of Devlin J. in Pyrene v Scindia as a matter of authority, that the reasoning of Devlin J. in Pyrene v Scindia was wrong, in particular that it proceeded on an assumption as to the intentions of those who drafted the Hague Rules which by reference to the travaux preparatoires can be shown clearly to have been wrong and that the approach of Devlin J. is now out of step with the approach taken in other leading common law jurisdictions to the interpretation of Articles III r.2 and 8. 

48.	The first question which I must decide is whether there is authority binding on this court.  It is common ground that the observations of Devlin J. in Pyrene v Scindia were obiter dicta. The case usually regarded as approving those dicta is the decision of the House of Lords in Renton v Palmyra. Mr. Rainey submitted that the approval by certain of their Lordships was not part of the ratio decidendi of the case and is therefore not binding upon this Court. It is therefore necessary to examine the issue in Renton v Palmyra, the decision in that case and the reasons underlying that decision.

49.	In Renton v Palmyra a vessel carrying timber was en route from Canadian ports to London and Hull when a strike broke out in London and in Hull. As a result the shipowner caused the vessel to proceed to Hamburg and there discharge her cargo. The shipowner took no steps to forward the cargo to England. The receivers claimed damages from the shipowners for breach of the contract of carriage contained in or evidenced by the bills of lading. The shipowners relied upon a clause in the bills which permitted them in the event of a strike to discharge at another safe and convenient port which would be deemed due fulfilment of the contract of carriage. The receivers argued that the clause was repugnant to or inconsistent with the main object of the contract of carriage (the common law point). They argued further that the clause was contrary to Article III r.2 of the Hague Rules which required the shipowners to “properly ... carry ... the goods” (the Hague Rules point). The clause, it was said, could permit the shipowners to discharge the goods at the port of loading, which would mean that the ship did not “carry” the goods at all. The clause was therefore null and void pursuant to Article III r.8 of the Hague Rules.

50.	The House of Lords decided unanimously in favour of the shipowners on both points but, in relation to the Hague Rules point, for different reasons. Viscount Kilmuir LC decided in their favour on the common law point. As to the Hague Rules point the Lord Chancellor held that the duty to carry properly meant in accordance with a sound system and had no geographical significance. For that reason he decided in favour of the shipowners and said nothing about Pyrene v Scindia. Lord Tucker decided in favour of the shipowners on the common law point and on the Hague Rules point for essentially the same reasons as the Lord Chancellor. He added that a decision, with perhaps far reaching consequences, on the extent and nature of the obligations imposed by Article III r.2 was not called for. That was, I think, a reference to the point raised by Pyrene v Scindia.

51.	However, the other three Law Lords did deal with Pyrene v Scindia. Lord Morton decided in favour of the shipowners on the common law point. As to the Hague Rules point he said in terms that he construed the words “shall properly and carefully carry and discharge the goods carried” as meaning that the carrier must perform the duties of carriage and discharge imposed upon him by the contract in a proper and careful manner. He referred to and quoted the dicta of Devlin J. in Pyrene v Scindia and agreed with them saying that his construction of Article III r.2 was more consistent with the object of the Rules and was the more natural construction of the language used. Having construed the terms of the contract of carriage as permitting discharge at Hamburg he said that the terms did not relieve the carrier from any failure in the duties and obligations imposed by Article III r.2 “as so construed”. He went on to say that unless the contract provides that the carrier is to carry the goods Article III r.2 does not oblige the carrier to carry the goods. He regarded that as a sufficient answer to the argument that the clause relied upon by the shipowners was inconsistent with Article III r.2 because it enabled the shipowner to discharge the goods at the port of loading. He added that he inclined to the view that a ship does “carry” goods within the meaning of Article III r.2 from the moment they are loaded on board until they are discharged from the ship. Lord Cohen agreed with Lord Morton.

52.	Lord Somervell decided in favour of the shipowners on the common law point. As to the Hague Rules point he said that he agreed with what Devlin J. had said in Pyrene v Scindia as to the ambit of Article III r.2. He said that Article III r.2 was only directed to the manner in which the obligations undertaken are to be carried out. Prima facie therefore he held that the Rules permitted the parties to contract in the way they had. He then dealt with the argument that, even if that were the correct approach to the Rules, a provision which entitled the carrier to discharge goods at the loading port must be bad because there would be no carriage. He rejected that argument on the grounds that once the good have been loaded there is “carriage” in the sense in which it is used in the Rules. But even if it could be said that there was no carriage by reason of the goods being discharged at the port of loading as a result of a strike that would not be invalidated by Article III r.2 because “such a provision is outside its scope”. That is probably a reference to the reason relied upon by the Lord Chancellor and Lord Tucker for rejecting the Hague Rules argument.

53.	Mr. Rainey submitted that the majority of the House of Lords had rejected the Hague Rules point because Article III r.2 had no geographical connotation. He submitted that only a minority (Lords Morton and Cohen) endorsed the dicta of Devlin J. in Pyrene v Scindia. Mr. Rainey excluded Lord Somervell because in the final stage of his judgment he agreed with the reasoning of the Lord Chancellor and Lord Tucker.

54.	I agree that there was a majority for the view that Article III r.2 had no geographical connotation. However, I disagree that only a minority approved the dicta of Devlin J. in Pyrene v Scinda. Lords Morton and Somervell did so expressly and Lord Cohen agreed with Lord Morton.

55.	The ratio decidendi of a case has been described as the “enunciation of the reason or principle upon which a question before a court has been decided” (see Halsbury’s Laws Vo1. 37 para.1237) or “any rule of law expressly or impliedly treated by the judge as a necessary step in reaching his conclusion, having regard to the line of reasoning adopted by him, or a necessary part of his direction to the jury” (see Precedent in English Law by Cross and Harris 4th ed. at p.72). There is no rule that if two reasons are given for the decision the second of the two is to be regarded and the first ignored as the ratio decidendi, for there can be two rationes decidendi in which case both are binding; see Behrens v Bertram Mills Circus [1957] 2 QB 1 at p.24 (per Devlin J.). Having regard to the language used by their Lordships there are, in my judgment, are at least two rationes decidendi for the rejection of the Hague Rules point by the House of Lords. Each is supported by a majority; the first is to be found in the speeches of the Lord Chancellor, Lord Tucker and Lord Somervell, that Article III r.2 has no geographical connotation, and the second is to be found in the speeches of Lord Morton, Lord Cohen and Lord Somervell, that Article III r.2 only requires the carrier to perform properly and carefully those obligations which he has agreed to perform. Lord Morton, with whom Lord Cohen agreed, said that that construction of Article III r.2 was sufficient to answer the Hague Rules point. Lord Somervell, by saying that that construction of Article III r.2 gave rise to a prima facie answer to the Hague Rules point, made clear that he also regarded that construction as a sufficient answer to the Hague Rules point. Each ratio decidendi is binding on this Court.

56.	Mr. Rainey said that in any event the decision in Renton v Palmyra was only that a strike clause was not inconsistent with Article III r.2. It was not necessary for the  House of Lords to decide that a carrier could divest himself of the other obligations in Article III r.2, for example, the duty to stow. It is correct that the House of Lords did not address in terms the question whether a carrier could divest himself of the obligation to stow but the reasoning of Lords Morton and Somervell drew no distinction between the various activities in Article III r.2. In my judgment the ratio decidendi to be found in the speeches of Lords Morton, Cohen and Somervell for rejecting the Hague Rules point applies to all the obligations or activities listed in Article III r.2. 

57.	In these circumstances it is unnecessary for me to consider whether there are any other decisions of appellate courts which approve the dicta of Devlin J. in Pyrene v Scindia in a manner which is binding upon this Court. 

58.	It is also unnecessary for me to consider Mr. Rainey’s submission that Devlin J. was wrong in 1954 when he preferred the views of the editor of Carver’s Carriage of Goods By Sea 9th. ed. (1952) (Raoul Colinvaux) to those of the editors of Scrutton on Charterparties and Bills of Lading 15th. ed (1948) (Sir William McNair KC and A.A.Mocatta) as to the proper meaning and effect of Article III r.2. 

59.	However, in case I am wrong in my conclusion that I am bound by authority to reject Mr. Rainey’s submission and in deference to the thoroughness of his researches (and those of his junior Mr. Craig) I will also deal with Mr. Rainey’s submission on the basis that there is no binding authority on the point. However, I will do so as shortly as I can and I hope he will forgive me if I do not comment upon each and every point.

60.	Mr. Rainey’s argument centred upon the travaux preparatoires to the Hague Rules. This was because Devlin J., whilst expressing the view that the language of Article III r.2 favoured the interpretation for which Mr. Rainey contended, that the carrier shall perform the cargo operations listed in Article III r.2 and that he shall do so properly and carefully, nevertheless regarded the object of the Rules to be more consistent with the interpretation that the carrier shall perform whatever cargo operations he has undertaken to perform properly and carefully.

61.	Reference to travaux preparatoires was first recognised as legitimate long after Pyrene v Scindia was decided; see Forthergill v Monarch Airlines [1981] AC 251. In Effort Shipping v Linden Management [1998] AC 605 Lord Steyn described the correct approach to the construction of an international convention in these terms: 

Although the text of a convention must be accorded primacy in matters of interpretation, it is well settled that the travoaux preparartories of an international convention may be used as “supplementary means of interpretation”; compare article 31 of the Vienna Convention on the Law of Treaties, Vienna, 23 May 1969. Following Fothergill v Monarch Airlines, I would be quite prepared, in an appropriate case involving truly feasible alternative interpretations of a convention, to allow the eveidence contained in the travaux preparatoires to be determinative of the question of construction. But that is only possible where the court is satisfied that the travaux preparatoires clearly and indisputably point to a definite legal intention; see Fothergill v Monarch Airlines Ltd. per Lord Wilberforce, at p.278C. Only a bull’s eye counts. Nothing less will do.

62.	To my mind the language of Article III r.2 supports Mr. Rainey’s submission.  This was the view of the language of Article III r.2 favoured by Devlin J. It was also the view favoured by textbook writers after the introduction of the Hague Rules; see Scrutton on Charterparties 12th.ed (1925) at p.495 (which view was continued through to the 15th.ed (1948), Temperley on The Carriage of Goods by Sea Act 1924 1st ed. (1925) pp.27-28 and 3rd.ed. (1927) pp.25-28, and Carver on Carriage by Sea 7th.ed. (1925) at paras.76(a) and 273 (continued through to the 8th.ed (1938)). 

63.	However, Lord Morton in Renton v Palmyra thought that the more natural construction of the language was that the carrier must perform the duties of carriage and discharge imposed upon him by the contract in a proper and careful manner.  This was the preferred view in the 9th.ed. of Carver published in 1952.

64.	In these circumstances it can fairly be said that there are truly feasible alternative constructions of Article III r.2. Mr. Rainey therefore explored the travaux preparatoires to the Hague Rules. (Although the bills of lading were subject to the Hague-Visby Rules there was no change to Article III r.2 in the Hague-Visby Rules.) The travaux preparatoires are now readily accessible in “The Legislative History of the Carriage of Goods by Sea Act and the Travaux Preparatoires of the Hague Rules (1990) by Professor Sturley. Mr. Rainey was not able, I think, to point to any express reference in the travaux preparatoires to the particular point which has arisen in this case, namely, can the merchant and the shipowner agree that the merchant shall perform the obligations of loading, stowage and discharge ? However, whilst it was not until the Diplomatic Conference in Brussels in October 1923 that Article III r.2 emerged in its final form, there are certain statements in the travaux preparatoires which strongly suggest that Article III r.2 was not intended to permit a shipowner to contract out of his duty to load, stow and discharge. Indeed Mr.Young accepted that there were passages which appeared to support Mr. Rainey’s argument.

65.	In May 1921 a sub-committee of the Maritime Law Committee of the International Law Association produced the first draft of the rules. The draft was approved by the International Law Association and its Maritime Law Committee in the Hague in September 1921. The draft became known as the Hague Rules 1921. At the World Shipping Conference in November 1921 (at which shipowners reviewed the Hague Rules 1921) Sir Norman Hill (who, as secretary of the Liverpool Steamship Owners’ Association and representative of the carriers, had been a dominant member of the drafting sub-committee of the Maritime Law Committee) said this:

So far I have laid stress on the advantages the shipowners gain under the Rules. On the other hand, the shipowner assumes, under Article III, the definite obligation to provide for the proper and careful handling, loading, stowage, carriage, custody, care and unloading of the goods throughout the period covered by the Rules ‑ that is, from loading to discharge ‑ tackle to tackle. The liability is only qualified by the terms of Article IV, which exempts the shipowner from liability for the perils there defined, including negligence in the navigation or in the management or in the management of the ship. The Rule will place on the shipowners full responsibility for damage resulting within the period in question from bad stowage or from theft and the like. It is a substantial extension of the shipowners’ liability, but it does not go, except on one point with which I will deal, beyond the obligations imposed by the Harter and Dominion Acts.

66.	This passage does not sit happily with the possibility that shipowners could avoid their obligations under Article III r.2 by entering into an agreement which removed from their sphere of activity the duty to load, stow and discharge.

67.	In May 1922 the rules were amended slightly by Sir Norman Hill and Andrew Marvel Jackson, a leading representative of the cargo interests, at a conference arranged by the Board of Trade. In October 1922 at a conference of the Comite Maritime International in London the rules were put into a form which could be adopted at a diplomatic conference. These were the Hague Rules 1922. At the Diplomatic Conference on Maritime Law in Brussels, held later in October 1922, the rules were discussed. The chairman of the conference, Louis Franck, introduced the rules and said this:

... in so far as it [the draft rules] deals with the handling, receipt, custody, stowage and delivery of the goods, it makes a uniform law obligatory in relations between the shipowner and the holder of the bill of lading.

68.	Because many of the delegates lacked authority to commit their governments to the final text a further diplomatic conference was required. That took place in Brussels in 1923. It was at this stage that the final form of Article III r.2 emerged. The chairman was again Louis Frank. He said this about Article III r.2:

Article 3(2) contained an essential clause highlighting that the carrier, except as provided for in article 4, was responsible for seeing that everything required for loading, handling, stowage, carriage, custody and unloading was provided for the goods to be carried. And the inclusion of every clause permitting the shipowner, without incurring responsibility, to fail in this essential duty of overseeing the preservation of the goods from the point of view of successful stowage, loading, and unloading was null and void. That was the main element of the convention because it was in this way that, in the past, the use of immunity clauses had given cause for the greatest criticism. The result had been the creation of different sorts of bills of lading that still bore the form, but whose content was completely destroyed by the force of the immunity clauses.

69.	Again it can be said that this passage does not sit happily with the possibility that shipowners could avoid their obligations under Article III r.2 by entering into an agreement which removed from their sphere of activity the duty to load, stow and discharge.

70.	The court can only be influenced by these travaux preparatoires if they clearly and indisputably point to a definite legal intention. The degree of clarity required is graphically illustrated by Lord Steyn’s remark that only “a bull’s eye” counts. Since the travaux preparatoires do not deal expressly with the question raised in this case I find it difficult to say that Mr. Rainey has scored a bull’s eye although he has come very near to doing so (particularly in the case of Sir Norman Hill’s address to the shipowners at the World Shipping Conference in November 1921). My difficulty can be illustrated by examining the statement of the chairman of the diplomatic conference in 1923 (when Article III r.2 was in its final form) which I have quoted. He does not say in terms that Article III r.2 prevents a shipowner and a merchant from agreeing that the merchant shall load, stow and discharge. He refers to a clause which permits a shipowner to fail in his duty to load, stow and discharge and refers to such clauses as immunity clauses. The distinction between, on the one hand, having a duty and seeking to protect oneself from a failure to perform that duty and, on the other hand, having no duty may be a fine one but it is a clear distinction nevertheless. The chairman did not say expressly or by necessary implication that a shipowner and merchant would be unable to agree that the merchant would load, stow and discharge the goods. For this reason I have concluded that Mr. Rainey has not been able to find a clear and indisputable legal intention on that point.

71.	Mr. Rainey has also submitted that the courts of the United States of America have taken a different view of Article III r.2 from that taken by Devlin J. in Pyrene v Scindia and that their view supports his submission on the effect of Article III r.2 and r.8. In this regard he has relied upon the importance attached by the House of Lords to a uniform approach to questions arising under an international convention; see for example Effort Shipping v Linden Management [1998] AC 605 at p.624 per Lord Steyn. As to the position in the USA Mr. Rainey referred to the decision of the US Court of Appeals Second Circuit in Associated Metals and Minerals v The Arktis Sky 978 F.2d. 47 (2nd Cir) 1992. Mr. Rainey also submits that the courts of Canada, South Africa, Italy and France have taken a different view of Article III r.2 from that of Devlin J. However, he accepts that the courts of Australia have followed Devlin J but he has pointed to a judicial suggestion that this may call for review; see Nikolay Malakhov Shipping v Seas Sapfor (1998) 44 NSWLR 371 at pp.380,387-8 and 418.

72.	I have not analysed in detail the foreign case law upon which Mr. Rainey relies but I am prepared to assume that the courts of several major trading countries have reached a different conclusion as to the scope of Article III r.2 from that reached by Devlin J. However, in circumstances where a commercial judge as distinguished as Devlin J. expressed his preference for one of two competing interpretations of Article III r.2 as long ago as 1954 and where that preferred interpretation has been regarded as settled law by English courts ever since (see the cases listed above in paragraph 46) I do not consider that it is right, at any rate for a court of first instance, to disturb that well established understanding of Article III r.2. In commercial law there is generally accepted to be a special need for certainty, consistency or continuity; see for example the Hannah Blumenthal [1983] AC 855 at p.913 (per Lord Brandon). It may be that  if England is out of step with most other jurisdictions that factor is not as potent as it would otherwise be and that the House of Lords may not feel inhibited from altering what has been regarded in English law as settled. But so far as concerns a first instance  court it is still, in my judgment, an important factor. So, although I consider that Mr. Rainey’s interpretation of Article III r.2 fits the language of Article III r.2 better than the interpretation preferred by Devlin J., I would still have rejected Mr. Rainey’s submission had there been no binding authority on the question.

THE INDEMNITY CLAIM

73.	It is unnecessary for me to decide this issue because I have held that the Defendants are not liable to the Claimants under the contracts of carriage contained in or evidenced by the bills of lading where the loading, stowage and discharge was not carried out by the Defendants, their servants or agents. Further, it is accepted by both the Claimants and the Defendants that the ultimate fate of the indemnity claim depends upon the issue of fact as to whether servants or agents of the Defendants caused the alleged damage to the steel coils by their negligence. It is accepted that if servants or agents of the Defendants did so cause the damage the Defendants would not have an indemnity claim against the charterers.

74.	In those circumstances I shall express my views shortly on the point which was debated  in argument, namely, whether clause 21 of the charterparty is apt to protect the charterers from any liability to indemnify the owners arising out of poor loading, stowage or discharge of the cargo.

75.	Clause 21 provides as follows:

All liability of charterer shall cease on completion of loading except Charterers to remain responsible for payment of freight, deadfreight and demurrage if any. Deadfreight/demurrage to be settled after completion of the voyage and receipt of loading and/or discharging documents.

76.	The only other clauses which were said to be relevant in construing this clause were clauses II and 17. Clause 17 I have already quoted. Clause 11 is entitled “Bills of Lading” and provides as follows: 

The Captain to sign Bills of Lading at any Freight required by Charterers, not less than Chartered rate. Charterers have the right to sub let this Charter Party to others in full or part, at any rate of freight  without prejudice to this Charter, they remaining fully responsible for due fulfilment of the same.

77.	It was submitted on behalf of the Defendants,  the shipowners, that there was an inconsistency between clauses 11 and 21 which should be resolved in favour of clause 11. I am not satisfied that there is any inconsistency. Clause 11 enables the charterers to sub-charter the vessel but they remain responsible to the owners under the terms of the charterparty. In other words any sub-charter does not affect the terms of the head charter. In order to decide what responsibility the charterer has under that charterparty it is necessary to look at the terms of the charter which terms include clause 21. 

78.	The Second Claimants, the charterers, argued that clause 21 meant what it said. “All liability” meant “all liability whatsoever”.

79.	The charterparty, by clauses 3 and 17, transfers to the charterers responsibility for  the proper performance of loading, stowage and discharge of the cargo. Those provisions, coupled with clause 11, give rise to an implied indemnity in favour of the owners  where the owners incur a liability to a bill of lading holder for improper performance of those obligations; see Canadian Transport v Court Line [1940] AC 934 at p.943 and Cooke on Voyage Charters at para.14.37. I consider that the liability can also sound in damages for breach of the charterers’ obligation to perform those obligations in a proper and careful manner; see the Caroline P [1984] 2 L1.Rep.466 at p.475 and Cooke on Voyage Charters at para.14.37 and 18.217. In the present case the pleaded claim mentions only an indemnity but I do not consider that this should bar the shipowners from relying upon both juridical bases for the claim as they did in argument.

80.	If clause 21 is to have the effect for which the Second Claimants, the charterers, contend it operates as a clause exempting the charterers from liability for improper or careless loading, stowage and discharge. As a matter of language there is some force  in the charterers’ argument because the clause expressly identifies those liabilities for which the charterers will remain liable and they do not include liability for improper or careless loading, stowage and discharge. However, an exemption clause must on general principles be construed strictly. I do not consider that clause 21 is expressed in sufficiently clear terms to exempt the charterers from the responsibility for the proper performance of the obligations to load, stow and discharge which they undertook in clauses 3 and 17 of the charterparty. Were clause 21 to exempt the charterers from such liability the shipowners would be left with no remedy in respect of improper or careless loading, stowage and discharge. That seems to me an improbable intention to ascribe to the parties in the absence of clear words to that effect. There would be no alternative claim against the shippers and receivers because this part of the argument assumes that the shipowners are liable under the bills of lading for improper or careless loading, stowage and discharge.

CONCLUSIONS

81.	I shall, subject to any drafting comments by counsel, answer the preliminary issues in this way:

1   (a) No.

(b). No, so long as the alleged damage was not caused by acts or omissions of the Defendants, their servants or agents.

2.   The question does not arise.