Bhatia Shipping v. Alcobex Metals

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Bhatia Shipping & Agencies PVT. Limited v. Alcobex Metals & Others
English High Court, Commercial Division: Mr Julian Flaux QC: [2004] EWHC 2323 (Comm): 20 October 2004
Michael Parland, instructed by Holmes Hardingham (Adrian Hardingham) for the Claimant carriers
The Defendant, Alcobex, was not represented

In this case, the claimant carrier was held entitled to rely upon a nine-month time-bar in the contract of carriage as a defence to a claim by the defendant for misdelivery of a consignment of bronze tubes in the course of carriage from Avonmouth, UK, the port of discharge, to Stafford as the ultimate destination.

DMC Category Rating: Confirmed

In February 2002, the claimant carrier contracted with Alcobex to carry eight boxes of bronze tubes from Mumbai in India to Stafford in England via the port of Avonmouth. The contract of carriage was contained in or evidenced by two multimodal transport documents ("MTDs") issued pursuant to the Indian Multimodal Transport of Goods Act 1993. The relevant clauses of the Standard Conditions on the reverse of the MTDs read as follows:

"12. Liability for loss or damage when the stage of transport where loss or damage occurred in known:-
(1) When the MTO [Multimodal Transport Operator or carrier] is liable to pay Compensation in respect of loss of or damage to the goods between the time of taking them into his charge and the time of delivery and the stage of transport where such loss or damage occurred is known, the liability of the MTO in respect of such loss and damage shall be determined by…. the provisions of the applicable law of the country where the loss or damage occurred….

22. Limitation of action:
Any action relating to multimodal transport under theses conditions shall be time barred if judicial proceedings have not been instituted within a period of nine months after:

  1. the date of delivery of the goods, or
  2. the date when the goods should have been delivered, or
  3. the date on and from which the party entitled to receive has the right to treat the goods as lost.

23. Jurisdiction
In judicial proceedings relating to the contract for [multimodal transportation] under these conditions the plaintiff, at his option, may institute an action in a court which according to the law of the country where the court is situated, is competent and within the jurisdiction of which is situated one of the following places:....

(c) the place of taking charge of the goods for multimodal transportation or the place of delivery thereof."

The terms of clauses 22 and 23 essentially mirrored the terms of ss.24 and 25 of the Indian Multimodal Transportation Act of 1993 and thus reflected Indian law.

The goods were carried from Mumbai to Avonmouth on the vessel "Persey" and discharged there on 9 April 2002. Despite the fact that the carrier had appointed an agent to effect on-carriage to Stafford, the receivers arranged with the ship’s agents that the goods should be released to them in Avonmouth, without production of the bills of lading. The release probably took place sometime in early May, and certainly by 17 May 2002.

Alcobex alleged that the release was without its knowledge and consent and that the receivers had not paid for the goods, which had been sold on cash against documents terms. It accordingly advanced a claim against the carrier alleging misdelivery and conversion of the goods. Despite sending a number of "letters before action" in the course of 2002 and 2003, it was only in January 2004 that Alcobex commenced proceedings against, among others, the carrier, in the Indian High Court at Mumbai.

Meanwhile, in April 2003, the carrier had commenced this action against, among others, Alcobex, seeking a declaration that it was not liable to Alcobex on the ground that any claim by Alcobex against it was time-barred under the provisions of the MTDs. The claims against the other defendants were for damages or an indemnity if the carrier were held liable to Alcobex for the misdelivery. These proceedings were duly served on Alcobex, which purported to serve an acknowledgement of service. This acknowledgement was invalid as it failed to give an address for service within the jurisdiction. The carrier asked that the action be tried on its merits, in order to facilitate enforcement in India of any judgment in its favour – a default judgment not being enforceable under Indian law.

On the question of jurisdiction and choice of law, the judge held that the English court had jurisdiction over the claim for two reasons. Firstly, the provisions of cl.12 of the Standard Conditions provided for a "proper floating law which is objectively ascertainable", which in this case was English law as the law of the country where the loss or damage occurred. Secondly, the court had jurisdiction by the express provisions of cl.23 since that clause "did not seek to restrict who may be the "plaintiff" or limit it to the owner of the cargo or the consignor or consignee". In addition, the judge held that England, rather than India, was the proper and appropriate forum for the proceedings. Although both parties were Indian, the alleged misdelivery took place in England and if the carrier’s claim against the other defendants had to proceed, the bulk of the evidence would come from England. Furthermore, the contracts of carriage were governed by English law. Even had the judge concluded that the contracts were governed by Indian law, he would still have held England to be the appropriate forum, particularly since the evidence showed that Indian law was - in all respects material to the case - the same as English law.

As regards the time-bar, the judge noted that cl.22 was in very wide terms, in that it referred to any action relating to the multimodal transport and thus encompassed whatever claim Alcobex might make in respect of the misdelivery, whether framed in contract or in tort. The nine-month period for the bringing of an action under cl.22 expired, at the latest, on 17 February 2003. Once that date had passed, any right of Alcobex to bring an action against the carrier was extinguished. The judge referred to Metalimpex Foreign Trade Corp. v. Eugenie Maritime [1962] Lloyd’s Rep. 378 as authority that English courts would construe time-bar clauses as extinguishing the right to bring a claim, rather than as having some lesser effect.

He noted further that since the relevant contracts were MTDs, the Hague/Hague Visby Rules and the twelve-month time limit under those Rules were of no application. Even if they were relevant, the twelve-month time limit had also expired before Alcobex commenced their proceedings in India.

Finally, the judge considered this an appropriate case in which to exercise his discretion whether or not to issue a negative declaration, as requested by the carrier. In the first place, any claim by Alcobex was already time-barred. Secondly, a judgment on the merits in these terms should preclude Alcobex from continuing its claim against the carrier in India. Thirdly, a judgment to this effect would render it unnecessary for the carrier to pursue its claims against the other defendants, since they were all contingent upon the carrier having a liability to Alcobex.

The claimant was according entitled to the declaration that it sought.

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