Rapiscan v. Global
Amongst other defences raised, Global Container relied on the limitation and exclusion of liability clauses in the Singapore Freight Forwarders Association Trading Conditions ("SFFA Conditions"). The Court held that the exclusion clause, clause 26(b) of the SFFA Conditions, did not exclude Global Container’s liability for negligence because it was applicable to heads of claim other than claims based on negligence. The limitation of liability clause, clause 27(b) was held to apply only to claims for delay and therefore did not limit Global Container’s liability in this case.
Case Note contributed by Ang & Partners, International Contributors to the site for Singapore
DMC Rating Category: Confirmed
On 16 December 2000, Rapiscan learnt that the machines were not on "Kota Perkasa" but were on a different vessel which was not scheduled to arrive in Macau until 19 December 2000. Rapiscan, with Fei Fu’s consent, immediately arranged to air-lift similar machines in Rapiscan’s warehouse in Singapore to Macau. The only air-cargo space available was from Kuala Lumpur to Hong Kong. The machines were trucked from the warehouse in Singapore to Malaysia, with some delay, but while they were en route to the Malaysian airport on 18 December 2000, Fei Fu cancelled the rental contract.
Rapiscan sued Global Container for breach of the oral contract of carriage, in particular for breach of an obligation to monitor the shipment. Apart from denying that it had such an obligation, Global Container argued that its liability was excluded or limited by the limitation and exclusion of liability clauses in the Singapore Freight Forwarders Association Trading Conditions ("SFFA Conditions") and in the bill of lading.
2. Global Container’s quotations contained the printed qualification that all transactions would be subject to the SFFA Conditions. The contract of carriage was entered into subject to those Conditions.
3. The terms of the bill of lading formed part of the contract of carriage notwithstanding that the bill of lading had not been issued at the time the oral contract was entered into. Rapiscan who had used Global Container’s services in the past would be aware that there were standard conditions attached to Global Container’s bill of lading. The principle in Pyrene Co Ltd v Scindia Steam Navigation Co Ltd  1 LLR 321, at 329, was applied: "When parties enter into a contract of carriage in the expectation that a bill of lading will be issued to cover it, they enter into it upon those terms which they know or expect the bill of lading to contain."
4. Clause 26(b) of the SFFA Conditions provided that Global Container shall not, "in any circumstances", be liable for loss or damage caused to property other than the goods themselves, indirect or consequential loss, loss of profits, and the consequences of any delay or deviation. Clause 6(4)(A) of the bill of lading had a comparable provision in shorter form. These exemption clauses were subject to the "Morton test", laid down in Canada Steamship Lines Ltd v The King  HL 192. The exemption clauses were held not to encompass liability for negligence as they were applicable to heads of claim other than claims based on negligence. Therefore, they would not exempt Global Container from liability for the breach of contract arising from its negligent misrepresentation as to the whereabouts of the machines.
5. Clause 27(b) of the SFFA Conditions limited Global Container’s liability, "howsoever arising and notwithstanding that such liability shall have arisen from the neglect or default" of Global Container, "in respect of claims for delay". Clause 6(4)(A) of the bill of lading also contained a provision limiting the carrier’s liability for delay. Although the limitation clauses were not subject to the same strict approach as the exemption clauses, the judge held that, on their wording, these clauses limited liability only in respect of claims for delay. Therefore, they could not limit Global Container’s liability arising from its negligence in failing to properly monitor the shipment.
6. Rapiscan was entitled to damages for loss of rental income as well as the costs of its attempt to mitigate the loss by embarking on the exercise of air-freighting other machines to Macau.
Comment from the Editor
The Court’s decision is pending appeal to the Court of Appeal.
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