Nasaka Industries (S) Pte Ltd v Aspac Aircargo Services Pte Ltd

JurisdictionSingapore
Judgment Date07 July 1999
Date07 July 1999
Docket NumberSuit No 1713 of 1997
CourtHigh Court (Singapore)
Nasaka Industries (S) Pte Ltd
Plaintiff
and
Aspac Aircargo Services Pte Ltd
Defendant

[1999] SGHC 181

Judith Prakash J

Suit No 1713 of 1997

High Court

Carriage of Goods by Air and Land–Carriage of goods by air–Carriage by Air Act (Cap 32A, 1989 Rev Ed)–Warsaw Convention–Whether equitable defences ousted by Warsaw Convention–Conditions of contract relieving carrier of liability–Whether null and void–Misdelivery of goods–Release of goods by carrier's agent to purchaser without authorisation by named consignee–Whether wilful misconduct–Equity–Estoppel–Defences–Acquiescence–Waiver–Whether equitable defences applicable

The purchaser ordered goods from Nasaka Industries (S) Pte Ltd (the “vendor”). Payment was by sight draft through the purchaser's banker (“the bank”), and the goods were to be shipped to the purchaser in New Delhi by air through Aspac Aircargo Services Pte Ltd (“the carrier”). When the goods were ready for despatch, the vendor would prepare shipping instruction naming the vendor as consignor, the bank as consignee and the purchaser as the notify party. For each shipping instruction, the carrier would prepare a house airway bill (“HAWB”), naming the vendor as shipper, the bank as consignee and itself as issuing carrier.

The carrier would arrange for the goods to be shipped to New Delhi and then place them under the control of the carrier's agent in New Delhi (“the agent”). For the purchaser to obtain delivery of the goods, the procedure to be followed would be for the purchaser to make payment to the bank on the sight draft, the bank to issue to the purchaser a bank release order (“BRO”) after receipt of payment, the agent to issue a delivery order in favour of the purchaser in accordance with the BRO and the purchaser to collect the goods from the airport on presenting the delivery order.

Prior to their contract with the carrier to ship the goods, the vendor was aware that the purchaser was in the habit of taking delivery of shipments of goods purchased by it but consigned to named consignee banks, prior to making payment, and without BRO. In this case, the agent released the delivery orders to the purchaser before payment, and without obtaining the relevant BRO. The purchaser took delivery of the goods and failed to pay for some of them. The vendor claimed against the carrier for the price of the unpaid goods on the ground of the carrier's breach of duty under the Carriage by Air Act (Cap 32A, 1989 Rev Ed) which incorporated the amended Warsaw Convention (“the Convention”) part of Singapore law, and alternatively, on the ground of breach of contract or negligence.

The carrier did not deny that it was contractually responsible to the purchaser and accepted that its contractual duty was to deliver the goods to the named consignee, the bank, or to its order pursuant to a duly issued BRO. In its defence, the carrier relied on the equitable defences of acquiescence, estoppel and waiver; defence under cl 4 (a) of the conditions of contract printed on the reverse of the HAWB; and the defences and limitation of liability provisions of the Warsaw Convention. The carrier argued that the equitable defences of estoppel, waiver and acquiescence were ousted by the Warsaw Convention.

Held, allowing the claim:

(1) The principles of equity were a fundamental part of Singapore law and had to be applied by the court unless Parliament specifically legislated for them not to be available. In this case the Convention did not specifically oust the principles of equity. In relation to the defences available to a carrier the Convention itself appeared to recognise that national law might be applicable. This was shown by Art 21, which stated that where the carrier could show contributory negligence on the part of the claimant, the carrier might be wholly or partly exonerated from liability in accordance with the provisions of the law of the forum. The Convention therefore recognised that whether contributory negligence was to have an effect on liability would depend on national law. National law therefore did play a part in determining the extent to which a defence of contributory negligence would assist the carrier. If national law could be relevant to one aspect of the defence, it could also be argued that the carrier as a defence could, if the law of the forum so allowed, raise other matters that relate to the conduct of the claimant. The equitable defences relied on in this case related entirely to the conduct of the plaintiff and laid outside the strict terms of the contract. The basis of these defences was that it would be inequitable for the plaintiff to succeed because of the way that the plaintiff itself acted in relation to the transaction. The defendant was entitled to plead and prove equitable defences because the court could not allow a plaintiff who had not come to the court with clean hands to succeed simply because the defendant could not bring himself within the provisions of Art 20 of the Convention: at [50] and [51].

(2) Silence on the part of the vendor, in not informing the carrier that it knew that the purchaser was in the habit of taking delivery of goods prior to payment, could not have caused the carrier to believe that it did not have to fulfil its obligation of making delivery to the named consignee. Neither did the silence cause the carrier to commit any act that it would not otherwise have done. The vendor had no previous experience with the carrier in relation to shipments to the agent. The vendor had no duty to tell the carrier how to conduct its business. The defence of estoppel or estoppel by acquiescence failed: at [80] and [84].

(3) On discovering that the goods were released without the BRO, the vendor informed the carrier and made it clear that such conduct was not acceptable. Despite this, subsequent goods were released without the BRO. The defence of waiver could not be established: at [88] and [89].

(4) Condition 4 (a) of the carrier's conditions of contract printed on the HAWB - containing provisions which relieved the carrier of liability - could not be relied on as it was inconsistent with Art 23 of the Convention which provided that any contractual provision tending to relieve the carrier of liability would be null and void: at [91].

(5) The defence under Art 20 of the Convention did not assist the carrier as it was unable to show that it and its agents took all necessary measures to avoid the damage since it was the wilful default of the agent that caused the damage: at [92].

(6) The defendant could not rely on Art 21 of the Convention since it did not plead or prove contributory negligence on the part of the vendor: at [92].

(7) The defendant was not entitled to the benefit of limitation under Art 25 of the Convention as the deliberate delivery of goods to a third party by its agent in blatant disregard of the contractual obligation imposed by the terms of the airway bill amounted to wilful misconduct: at [95].

Amalgamated Investment & Property Co Ltd (in liquidation) v Texas Commerce International Bank Ltd [1982] QB 84 (refd)

Greenwood v Martins Bank Ltd [1933] AC 51 (refd)

Regalite International v Aircargo Consolidation Service (HK) [1996] 3 HKC 453 (refd)

Seagate Technology International v Changi International Airport Services Pte Ltd [1997] 2 SLR (R) 57; [1997] 3 SLR 1 (refd)

Sidhu v British Airways plc [1997] AC 430 (refd)

Spiro v Lintern [1973] 1 WLR 1002 (refd)

Application of English Law Act (Cap 7A, 1994 Rev Ed)s 3 (1)

Carriage by Air Act (Cap 32A,1989 Rev Ed)

Carriage by Air (Singapore Currency Equivalents) Order 1988 (S 249/1988)

Civil Law Act (Cap 43,1994 Rev Ed)s 3 (b)

Arjan Chotrani and Haresh Kamdar (Arjan & Co) for the plaintiff

P E Ashokan and K Anparasan (William Chai & Rama) for the defendant.

Judgment reserved.

Judith Prakash J

1 This claim arises in connection with the air carriage of 27 shipments of computer components by the defendant for the plaintiff from Singapore to New Delhi in September and October 1996. The plaintiff's complaint is that the defendant wrongfully released the goods in New Delhi to someone other than the specified consignee. As a result, in respect of 15 shipments, no payment has been received by the plaintiff who now claims US$283,771.50, being the price of the goods.

Summary

2 The plaintiff company started business in Singapore in August 1995. Its founder, Mr Sandeep Gupta, had been in the computer component supply business in New Delhi and he came to Singapore to set up a similar business to supply components to Indian manufacturers of computers. The business did fairly well. In the 12-month period between April 1996 to March 1997, the plaintiff had 51 customers, mainly in India. The plaintiff's major customer was a company known as Altos India Ltd (“Altos”).

3 Altos was a public company listed on the New Delhi Stock Exchange. Its core business was the manufacture of personal computers for the domestic Indian market. The plaintiff was one of some ten foreign companies that supplied computer components to Altos for use in its production line. The plaintiff started doing business with Altos in 1995 and made regular shipments of goods to it thereafter.

4 In about August/September 1996, Altos embarked on a project it called the “Millenium project” (“the project”) to manufacture low-cost personal computers. Between 26 September 1996 and 22 October 1996, it placed five purchase orders with the plaintiff for the supply of components for the project. The payment term specified for each order was by sight draft through Altos' bankers, Bank of India, New Delhi. Further, in each purchase order, the plaintiff was instructed to forward the goods to Altos by air and to use the services of the defendant company as the freight forwarder.

5 The defendant is a Singapore company. As its name implies, the defendant sends cargo shipments by air to various parts of the...

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