Court of Appeal, Singapore

Yong Pung How CJ, LP Thean J, Goh Joon Seng J

8 February 1993

KEYWORDS

Bill of Lading – Deviation when unable to Discharge, pursuant to Contingencies Clause in Bill of Lading – Abandonment of Voyage – Termination of Carriage Contract – Involuntary Bailment after Abandonment of Voyage – Consequences of Transshipment after Abandonment of Voyage without Cargo Owner’s Instruction – Conversion – Trespass to Goods – Liability of Shipowner as if Insurer

FACTS AND DECISION

Cargo was carried from Bangkok in Thailand to Khorramshahr in Iran on board vessel Kota Sejarah. She could not discharge in Khorramshahr due to laborers’ strike there. She proceeded to Porbander in India as the final destination and discharged the cargo there into the port godown. The shipowner was authorised to do so by a contingencies clause in the bill of lading in the event of contingencies like strike, etc. It was not disputed that the shipowner was so authorised. Thereafter, on 1st March 1979 the shipowners and the cargo owners discussed further arrangements, but not was reached. Then, around early May 1979, the shipowner loaded the cargo on board vessel Kota Agung bound for Khorramshahr, without any notice to the cargo owners. Just after that, on 10th May 1979, when the vessel had not set on the voyage yet, the cargo owners instructed the shipowners not to hold on the the cargo, as the Iranian buyers had defaulted and further undertook to pay the storage charges. However, the shipowner refused to off-load the cargo, but parties came to an arrangement for reshipment of the cargo from Khorramshahr to Bangkok at a certain rate. Upon arrival at Khorramshahr, the vessel caught fire and the cargo was destroyed totally. The cargo owner sued the shipowner in contract, conversion, bailment, negligence and trespass to goods.

The court found that the contingencies clause did not authorise transshipment after cargo was discharged at the Indian port as the final destination, at which point the voyage was abandoned and the contract for carriage terminated. Upon discharge at the Indian port, the shipowners became bailee involuntarily. The court held that transshiping without or contrary to the cargo owner’s instruction was a trespass to the goods. Removing one’s goods against his wishes or wrongful interference with another’s goods is trespass to goods. A bailee may move the goods to a safer or suitable place, but not return to perform the terminated contract for carriage. As a trespasser, the shipowner stood in the place of an insurer and had to pay for the loss, irrespective of any negligence. On another count, as a bailee too, the shipowner is liable for the loss, as the shipowner was not able to prove that the fire happened without its fault. The court also held that the shipowner had committed a ‘conversion’ by transshiping the cargo.

OBSERVATION

The validity of this conversion point is arguable, as the shipowner did not pass on the goods to any other by the transshipment, but were still holding it for the cargo owner. However, any finding on this will not affect the judgement as the shipowner was already found liable on trespass and bailment.

Overview by ARUN KASI