Court of Appeal, Singapore

Yong Pung How CJ, Chao Hick Tin JA, Judith Prakash J

11 September 2002; 12 November 2002

KEYWORDS

Bill of Lading – Misdelivery – Conversion action available only to a bill of lading holder – Action by Glencore Switzerland, bills endosed to and held by Glencore UK as agents for Glencore Switzerland

FACTS AND DECISION

Fuel oil belonging to the claimant, carried on board the Hyperion from Iran to Fujairah, was misdelivered into another tanker, namely the Cherry, owned by another carrier. The owners of the Cherry then wrongfully on-carried the cargo to Singapore and misdelivered the same to a wrong person. The claimant however did not hold the bill of lading. The claimant brought an action in conversion (among others) against the owners of Cherry. The court disallowed the claim, as a claim in conversion was only available to a person who held the immediate right to possession, i.e. holder of the bill. The result would have been the same even if the action was brought against the former carrier who misdelivered to the latter carrier.

This was a consolidated appeal case, in which the court also decided a claim brought by the claimant against the owners of the Cherry, but in respect of a different shipment of fuel oil from Kuwait to Fujairah and two other claims brought by the same claimant against the owners of two other tankers, the Epic and the Addax. In the case of these three shipments, carried by the Cherry, the Epic and the Addax , the bills of lading were endorsed to and held by a sister company of the Swiss based claimant (Glencore International AG, Switzerland) in the UK (Glencore UK Ltd, UK) The sister company was holding the these three bills as agent for the claimant, hence the claimant was considered the holder of these bills. All the cargo of the three shipments were misdelivered by the respective owners of the three tankers without presentation of the bill (upon instruction of the seller, who also happened to be the time charterer of the three carrying ships) The claims in respect of these three shipments, bought on the basis of the bills of lading contract (among others), were allowed.

OBSERVATION

However, the procedural correctness of the decision in relation to the three shipments is questionable, as the bills were not merely held by the UK company, but were indorsed to the UK company. Hence, the UK company was the holders of the bill in the eyes of the law, even if they held it for the benefit of the Swiss company. In fact, s. 2(4) of the Bills of Lading Act in Singapore, which is identical to s. 2(4) of the Carriage of Goods by Sea Act 1992 in the UK, makes provision for this scenario by allowing the holder of the bill to take action for the benefit of the owner of the cargo. Hence, as a matter of procedure, the better and safer approach, particularly taking into account the short time limit (Art: III(6) of the Hague Rules / Hague-Visby Rules: Time limit of one year to bring suit from the date of delivery or from the date when the cargo should have been delivered) would have been at least to join the UK company as a claimant.

Overview by ARUN KASI