Bandung Shipping Pte Ltd v Keppel Tatlee Bank Ltd

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 30 October 2002
• Neutral Citation: [2002] SGCA 46
• Docket Number: Civil Appeal No 13 of 2002
• Date: 30 October 2002
• Published date: 19 September 2003
• Year: 2002
• Plaintiff Counsel: Toh Kian Sing and Ung Tze Yang (Rajah & Tann)
• Citation: [2002] SGCA 46
• Defendant Counsel: Haridass Ajaib and Thomas Tan (Haridass Ho & Partners)
• Court: Court of Appeal (Singapore)
• Subject Matter: Bills of lading,Civil Procedure,Admiralty and Shipping,Whether local bank retains rights of suit under bills of lading,Striking out,Bills of Lading Act (Cap 384, 1994 Rev Ed) ss 2(1), 2(5) & 5(2),Whether rights of suit under bills of lading re-vested in local bank,Buyer failing to pay,Rules of Court (Cap 322, R 5, 1997 Rev Ed) O 18 r 19,Local bank indorsing and delivering bills of lading to foreign bank,Local bank stamping word "cancelled" over indorsement to foreign bank in bills of lading,Foreign bank redelivering bills of lading to local bank without any indorsement,Whether plaintiffs have right of suit under Bills of Lading Act (Cap 384, 1994 Rev Ed)

Judgment

GROUNDS OF DECISION

1 This was an appeal against a decision of the High Court reversing in part a decision of the Deputy Registrar striking out the statement of claim of the plaintiffs, the respondents before us. The High Court while restoring the plaintiffs’ claim based on contract/bills of lading, agreed with the Deputy Registrar that those parts of the statement of claim based on negligence and conversion should be struck out. We heard the appeal on 11 September 2002 and allowed it restoring the decision of the Deputy Registrar striking out the entire statement of claim and the action. We now give our reasons.

The facts

2 The defendant-appellants (Bandung) were at all material times the owners of the vessel "Victoria Cob". The respondent-plaintiffs (Keppel TL) were bankers. A cargo of 508 m/t of crude palm oil, which was the subject matter of the action, was shipped by Shweta International Pte Ltd (Shweta) on board the vessel at Belawan, Indonesia for delivery at Kandla, India. Two bills of lading (B/L), dated 13 April 2000, were issued by Bandung for that shipment.

3 In the statement of claim, Keppel TL averred that they were the owners of the cargo which was carried on board the vessel. In the alternative, they alleged that they were the lawful holders or indorsees of the two B/Ls and were thus entitled to immediate possession of the same.

4 Keppel TL further averred in the statement of claim the following:-

7. In breach of contract and or in breach of their duty as bailees and or through negligence the Defendants failed to take reasonable care of the Cargo and to deliver the Cargo to the Plaintiffs against the presentation and or production of the original Bills of Lading and instead delivered the Cargo to person(s) who did not hold and or present and or have possession of the said original Bills of Lading.

8. Further and or alternatively, the Defendants have converted the cargo to their own use and have wrongfully deprived the Plaintiffs thereof.

9. By reason of the Defendants’ breach of contract and or duty and or negligence and or conversion aforesaid, the Plaintiffs have suffered loss and damage.

5 We would point out that the portions of 7 to 9 of the statement of claim quoted above which were underscored, were the portions which were struck out by the judge below when allowing in part the appeal of Keppel TL. There was no appeal by Keppel TL against the order striking out those parts. Following the decision of the High Court, what remained of Keppel TL’s claim was on contract/bills of lading.

6 Pursuant to a written request by Bandung, further and better particulars were furnished. Keppel TL stated that they obtained the two B/Ls by purchase from Ranchhoddas Purshottam Holdings (RPH). They alleged that at all material times Keppel TL were holding the B/Ls and yet Bandung delivered the cargo to another who never presented the B/Ls.

7 When particulars were requested as to the party who allegedly endorsed the B/Ls to Keppel TL, the latter asserted that they were not relying on any indorsement on the B/Ls to establish their title to sue.

8 After the particulars were furnished, Bandung applied to have the action struck out under O.18 r.19(1)(a)-(d) of the Rules of Court. From the affidavits filed by the parties, the following facts emerged. Shweta had sold the cargo to RPH and shipped them on board the "Victoria Cob". Shweta indorsed the B/Ls in blank and delivered them to RPH who, in turn, had on-sold the cargo to Lanyard Foods Ltd (Lanyard). Thereafter, RPH, through its bankers, Bank National de Paris, delivered the two B/Ls to Keppel TL for purchase/negotiation, without filling in any name onto the indorsement made in blank by Shweta.

9 On 25 May 2000, Keppel TL filled in the name "the State Bank of Saurashtra in India" (State Bank) onto the blank endorsement made by Shweta and forwarded the two B/Ls to the State Bank to hold the same for collection by Lanyard. However, Lanyard never came forward to pay for the cargo and collect the two B/Ls, which were duly returned by the State Bank to Keppel TL in November 2000. No indorsement was made by the State Bank on the B/Ls either in blank or specially in favour of Keppel TL. Upon receipt of the two B/Ls, Keppel TL, on their own motion, just stamped the word "CANCELLED" over the indorsement in each of the two B/Ls.

10 In the meantime, the vessel arrived at Kandla and discharged the cargo to the agents of Lanyard, without the production of the B/Ls.

Decision below

11 To succeed under r 19(1)(a), no other material may be referred to except the pleadings. As Keppel TL had pleaded that they purchased the B/Ls from RPH, that Bandung had delivered the cargo to a third party without the presentation of the B/Ls which were still held by them and that they had thereby suffered loss, Bandung could not possibly succeed in having the action struck out under r 19(1)(a). And the judge below so held.

12 However, affidavit evidence is admissible for the purposes of r 19(1)(b)-(d), and such facts may be taken into consideration in determining whether the action should be struck out. The judge below noted that Keppel TL inserted the name of State Bank in the blank indorsement as a safety precaution, in case either of the two B/Ls should go astray in transit. With regard to the argument raised by Bandung, that the cancellation of the indorsement effected by Keppel TL had the result of nullifying the original indorsement of Shweta, the judge was of the view that this was a question of law which was not altogether clear and that the issue should proceed to trial. He said that it was only in plain and obvious cases that the power of striking out should be invoked.

Issues on appeal

13 There was in substance only one issue for this court to decide: Had Keppel TL the rights of suit under the contracts of carriage as evidenced by the two B/Ls. A related question was, if Keppel had no such right of suit, whether the action should have been struck out. We will first deal with the substantive question.

Rights of Suit

14 Under s 2(1) of our Bills of Lading Act (B/L Act), which was adopted from, and is in pari materia with, the English Carriage of Goods by Sea Act, 1992 (COGSA 1992), a person who has become the lawful holder of a B/L shall have and "transferred to and vested in him all rights of suit under the contract of carriage as if he had been a party to that contract".

15 Under s 5(2)(b) of the B/L Act, a person "with possession of the bill as a result of the completion, by delivery of the bill, of any indorsement of the bill or, in the case of a bearer bill, of any other transfer of the bill" and who "has become the holder of the same in good faith", shall be regarded as the lawful holder of the bill. In short, an indorsee who is in possession of the B/L in good faith would be the lawful holder. We should add that under s 5(2)(a) and (c), two other situations are provided where a person could be the lawful holder of a bill but they do not concern us here.

16 Another relevant provision is section 2(5) of the B/L Act which reads:–

"2(5) Where rights are transferred by virtue of the operation of subsection (1) in relation to any document, the transfer for which that subsection provides shall extinguish any entitlement to those rights which derives,

(a) where that document is a bill of lading, from a person’s having been an original party to the contract of carriage;

(b) in the case of any document to which this Act applies, from the previous operation of that subsection in relation to that document,"

17 The effect of s 2(5) is explained in Carver on Bills of Lading as follows (at 5-066):-

"The situation here to be considered is that in which goods are shipped by A under a bill of lading which he transfers to B who then transfers it to C. If each of these transfers is made in circumstances vesting rights in...