Pacific Electric Wire & Cable Co Ltd and Another v Neptune Orient Lines Ltd (Toko Kaiun Kaisha Ltd, Third Party)

• Jurisdiction: Singapore
• Judge: G P Selvam JC
• Judgment Date: 29 May 1993
• Neutral Citation: [1993] SGHC 122
• Docket Number: Admiralty in Personam No 527 of
• Date: 29 May 1993
• Published date: 19 September 2003
• Year: 1993
• Plaintiff Counsel: Anwarul Haque and Sharmini Yoga (Haridass Ho & Partners)
• Citation: [1993] SGHC 122
• Defendant Counsel: Ooi Oon Tat (Emmanuel & Barker),Loo Dip Seng (Ang & Partners),Ho Chien Mien (Allen & Gledhill)
• Court: High Court (Singapore)
• Subject Matter: Whether Hague Visby Rules applicable under paramount clause in bill of lading,Express choice in bill of lading,Whether Singapore law or Taiwanese law applied,Bills of lading,Whether effective,Conflict of Laws,Contract,Whether Hague Visby Rules applicable to bill of lading delivering goods to Singapore,Hague-visby rules,Whether express choice of law clause effective,Admiralty and Shipping,Choice of law

The issue

Cur Adv Vult

This judgment is on a preliminary point of law which is whether the carriage of certain goods carried from Taiwan to Singapore under an ocean bill of lading issued in Taiwan was governed by the law of Taiwan or the law of Singapore.

The alleged circumstances under which the question arose are as follows. There was shipped on board the Malaysian mv Prima Satu, a cargo of 40 reels of power cable at Keelung for carriage to and delivery at Singapore. The carriage was evidenced by a combined transport bill of lading issued in the name of the defendants. The shippers named in the bill of lading were Pacific Electric Wire and Cable Co Ltd. It was a consignee bill of lading as distinct from an order bill of lading. It was, accordingly, not transferable by endorsement and delivery. The consignees named were Sigma Cable Co (Pte) Ltd of Singapore. The cargo was delivered to the consignees in a damaged condition. The loss and damage is quantified as S$541,917.70.

One of the bases of the claim asserted by the plaintiffs is that the bill of lading is subject to the Hague Visby Rules as scheduled to the Singapore Carriage of Goods by Sea Act (Cap 33) (`the Act`).

The defendants are Neptune Orient Lines Ltd of Singapore. Their defence states that the shipment was not subject to the Hague Visby Rules as scheduled to the Act and that the Hague Visby Rules had no application to the carriage. The defendants have pleaded limitation of liability as follows:

9 If (which is denied) the defendants are liable to the plaintiffs for the alleged damage caused to the said goods, the defendants say that the shipment and carriage of the said goods are subject to the laws of the Republic of China (Taiwan) which laws provide that the liability of the defendants is limited to the sum of NT$9,000 per package and the defendants rely on the said limitation and say that their total liability shall not exceed the sum of NT$360,000.

The approximate equivalent of NT$360,000 is S$22,500.

It is now necessary to set out two provisions in the bill of lading.

(3) Paramount clause. This bill of lading shall have effect subject to any national law as enacted in the country of shipment, making the Hague Rules or the Hague Rules as amended by the Protocol signed at Brussels on 23 February 1968 (the Hague Visby Rules) compulsorily applicable to this bill of lading. If any term of this bill of lading be repugnant to the said legislation to any extent, such terms shall be void to that extent, but no further. Neither the Hague Rules nor the Hague Visby Rules shall apply to this contract where the goods carried hereunder consist of live animals or cargo which by this contract is stated as being carried on deck and is so carried. If no such national law shall be compulsorily applicable the carrier shall be entitled to the benefit of all privileges rights and immunities contained in the United Kingdom Carriage of Goods by Sea Act 1924, but without prejudice to his right to rely on the terms, conditions and exceptions set out herein notwithstanding that they may confer wider or more beneficial rights liberties or immunities upon the carrier than those set out in the said Convention.

(21) The contract evidenced hereby or contained herein shall be governed by Singapore law. Any claim or other dispute thereupon shall be solely determined by the Singapore courts unless the carrier otherwise agrees in writing.

The limitation of liability under the Hague Rules is as follows:

Article IV

Rule 5

Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with goods in an amount exceeding 100 l per package or unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.

Article IX

The monetary units mentioned in these Rules are to be taken to be gold value.

The limitation of liability under the Hague Visby Rules is as follows:

Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding the equivalent of 10,000 francs per package or unit or 30 francs per kilo of gross weight of the goods lost or damaged, whichever is the higher.

The Singapore dollar equivalents of 10,000 francs and 30 francs are $1,563.65 and $4.69 respectively: see The Carriage of Goods by Sea (Singapore Currency Equivalents) Order 1982 (S172/82).

The defendants do not rely on the limitation under the Hague Rules or the Hague Visby Rules. The applicability of Taiwanese law and in particular Taiwanese limitation is therefore of crucial importance.

Basic principles

Before embarking on the main issue it is necessary to touch on certain matters of general principle and application.

First, a claim in contract will be decided according to the terms of the contract (both express and implied) and the proper law of the contract which as a general rule is the law the parties intended to apply to the transaction.

Secondly, the forum and all those before it are presumed to have knowledge of its laws. But foreign law, by a legal fiction, is treated as fact. Accordingly a party raising foreign law as the proper law of the contract must prove it unless it is admitted. The court otherwise will proceed on the assumption that foreign law is the same as domestic law.

Thirdly, the Singapore court, as required by s 5 of the Civil Law Act (Cap 43), in all commercial matters such as contracts for sale of goods and carriage by sea, will decide the matter by applying English law as domestic law. As this is a commercial case, English law will be considered to be Singapore law.

Fourthly, whenever a contract of affreightment is concluded between a shipper and a carrier in the expectation that a bill of lading will be issued, that contract is deemed to include from its inception the terms contained in the usual bill of lading of the carrier. And in the hands of the consignee or indorsee who is given delivery the only contract is that contained in the bill of lading. See Pyrene Co Ltd v Scindia Navigation Co Ltd .

The right of the receivers of the cargo to bring this action and the right of the parties to rely on the terms contained in the bill of lading accordingly must be determined by English law because no Taiwanese law has been raised on these aspects of the case. The applicable law is the English Bills of Lading Act 1855, the relevant provision of which reads as follows :

(1) Every consignee of goods named in a bill of lading, and every indorsee of a bill of lading, to whom the property in the goods therein mentioned shall pass upon or by reason of such consignment or indorsement, shall have transferred to and vested in him all rights of suit, and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.

In this case there is no question that the carriage was intended to be governed by a bill of lading and that bill of lading would be the defendants` usual form which in the event was issued and which is the contract both parties have relied on. Lastly, effect of the consignee being given delivery is that the shipper loses the right of action and ceases in effect to be a party to the contract: see `The Albazero` .

The real issue therefore is whether as between the carriers (the defendants) and the cargo interests (the plaintiffs) the choice of law stated in the bill of lading is binding on them. To decide the point, a historical review of the relevant authorities is necessary.

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