UNRAVELLING THE IDENTITY OF THE CARRIER

• Citation: (1994) 6 SAcLJ 182
• Author: DAVID CHONG GEK SIAN
• Date: 01 December 1994
• Published date: 01 December 1994

This article examines the law relating to the identification of the contracting carrier where goods have been shipped under bills of lading issued in respect of a chartered vessel

THE identity of the contracting carrier is of great significance. It is significant because once the identity of the carrier has been ascertained, persons who have maritime claims against the carrier may bring into motion all the remedies available against the carrier. One such remedy is the effecting of admiralty arrest of a vessel beneficially owned by the contracting carrier. Apart from the availability of the action in rem to enforce claims, the vessels belonging to the contracting carrier may also be subject, where the circumstances are appropriate, to a Mareva injunction. Of course, it is also imperative that the identity of the contracting carrier be established for otherwise claimants would not be able to commence action against the carrier within the relevant limitation period. In the days prior to the enactment of the United Kingdom Carriage of Goods by Sea Act 1992 (hereinafter referred to as “COGSA 1992”, claimants would also have to establish their locus standi to sue the party alleged to be the contracting carrier. However, with the enactment of COGSA 1992, which applies in Singapore by reason of its express inclusion in Schedule 2 of the Application of English Law Act,1 lawful holders of bills of lading who have suffered damage and/or loss by reason of damage, loss or delay caused to the goods carried under the bills of lading would be able to establish their rights of suit against the contracting carrier (whoever that might be) without any difficulty.

However, the ascertainment of the identity of the contracting carrier does not always result in the prospect of a law suit against the shipowner. In certain circumstances, such as those which arose in Cascade Shipping Inc. v. Eka Jaya Agencies (Pte.) Ltd.2 and Limerick Steamship Co. Ltd. v. A. Coker and Co. Ltd.,3 it would prove advantageous to the shipowner should it be held to be the contracting carrier. In both Cascade Shipping Inc. v. Eka Jaya Agencies (Pte.) Ltd. and Limerick Steamship Co. Ltd. v. A. Coker and Co. Ltd., the question of the identity of the contracting carrier arose because of a dispute over the right to receive the freight payable under bills of lading issued for the carriage of goods on board a chartered vessel. In such circumstances, the relevant parties would naturally contend that it is the contracting carrier so as to lay their hands on the freight.

The identity of the contracting carrier is often - to the uninitiated cargo claimant - a matter of some mystery especially since vessels are often operated in the framework of charterparties and sub-charterparties. Of course, where bills of lading are issued by the shipowner who operates the vessel in his own right, the shipowner is the contracting carrier. Similarly, where the vessel has been demise chartered and bills of lading are issued in respect of the goods shipped on board the demise chartered vessel, the bills of lading so issued evidence and/or contain contracts of carriage between the demise charterer and the holder of the bills of lading.4

However, in reality things are not so simple as they seem - and it is usual for the shipowner or demise charterer to charter and sub-charter, respectively, the vessel. Indeed, it is not unknown for a vessel to be the subject of several successive charterparties as may be seen in the case of “The Cebu (No. 2)”,5“The Annangel Glory”6 and “The Jalamohan”.7 In all these three cases. the dispute arose against a setting of a head time charter and a sub-time charter followed by a sub-sub-charter. Such a setting is not unfamiliar to those who are au fait with the shipping market as the car “back-to-back” charterparty arrangement is a popular commercial arrangement. In this kind of arrangement each charterer, sub-charterer and subsub-charterer may properly be described as a disponent owner. As Morris J. observed in O/Y Wasa S.S. Co. Ltd. & Anor. v. Newspaper Pulp & Wood Export Ltd.:8

“The phrase ‘disponent owner’ is a somewhat vague one. It would presumably cover a time charterer. It covers someone who can dispose of a ship without being the owner of the ship, for the ‘disponent owner’ must be different from the owner.”9

However, the cargo claimant should not be distressed for amidst - or one may say, despite - all the obnubilations and obfuscatory commercial machinations like the “back-to-back” charterparty arrangement, the law has fashioned clear principles for the identification of the contracting carrier in contracts of carriage of goods by sea. It is the faithful application of

these principles which assist the cargo claimant to unravel the identity of the contracting carrier.

It is the object of this paper to examine the principles which apply to the ascertainment of the identity of the contracting carrier in contracts of carriage of goods by sea evidenced by or contained in bills of lading issued in respect of goods shipped on board chartered vessels. By way of clearing the decks, it must be stated at the outset that this paper does not deal with the position of the voyage charterer to whom bills of lading have been given by the master for shipment of goods on board the vessel. In such a situation, any claim for cargo loss or damage by the charterer (as opposed to a claim by a holder of the bill of lading who is not the charterer) against the shipowner would be regulated by the terms of the voyage charterparty. For in such a situation, the bill of lading in the hands of the charterer is just a receipt for the goods and a document of title.10 As mentioned earlier, this paper examines the rights of cargo owners (other than charterers)11 who hold bills of lading issued to them or endorsed12 over to them in respect of goods shipped on board a chartered vessel.

For the sake of convenience, this paper is sub-divided into two parts: the first part deals with the construction of the relevant documents to ascertain the identity of the contracting carrier and the second part deals with the doctrine of estoppel creating liability as contracting carrier.

I. CONSTRUCTION OF THE RELEVANT DOCUMENTS

In the main, the difficulties in identifying the contracting carrier arise because goods are shipped on board a vessel which is the subject of a charterparty. In such a case, where bills of lading have been issued, the question which invariably arises is the identity of the contracting carrier. At this juncture, it is pertinent to point out that bills of lading issued by

a demise charterer present no difficulty - in such a case, since the demise charterer has the possession of the vessel, he is pro hac vice the owner of the vessel and in such a charterparty, the master of the vessel is the agent or servant of the demise charterer. Thus any bill of lading signed by the master of a demise chartered vessel would evidence a contract of carriage between the demise charterer and the shipper. However, complications arise where the demise charterer has sub-chartered the vessel by way of a time or voyage charterparty and bills of lading are issued thereafter. In such a context, the question of who is the contractual carrier is not entirely free from difficulty for as Roche J. observed in Wilston S.S. Co. Ltd. v. Andrew Weir & Co. Ltd.,13“whether the bills of lading … were signed as the contracts of the shipowners or of the charterers [is] an old and familiar question. It is a question which always falls to be decided upon the facts of the case and the documents in the particular case.”14

Before proceeding further, it is apropos to mention that all standard time or voyage charterparties permit the charterer to instruct the master to sign bills of lading without prejudice to the charterparty entered into between the shipowner and the charterer. As Brandon J. pointed out in “The Berkshire”15 the effect of a clause in a charterparty permitting the charterer to present bills of lading to the master for his signature is “well settled.”16 In the first place, the clause entitles the charterers to present to the master for signature by him on behalf of the shipowners bills of lading which evidence or contain contracts of carriage between the shippers of the goods and the shipowners provided always that such bills of lading do not contain extraordinary terms or terms manifestly inconsistent with the charterparty; and the master is obliged on presentation to him of such bills of lading to sign them on the shipowners’ behalf. In the second place, the charterers may, instead of presenting such bills of lading to the master for signature by him on behalf of the shipowners, sign them themselves on the same behalf. In either case whether the master signs the presented bills of lading on the directions of the charterers, or the charterers short-circuit the matter and sign themselves, the signature binds the shipowners as principals to the contracts of carriage evidenced by or contained in the signed bills of lading.17 And whether the charterers themselves or their agents sign the bills of lading on behalf of the master make no difference to the matter - at the end of the day, the bills of lading signed by the charterers or their agents on behalf of the master give rise to contracts of carriage between the shippers and the shipowners. The agents of the charterers may sign the

bills of lading binding the shipowners to the contracts of carriage evidenced by or contained in the bills of lading because of the implied authority18 conferred on such agents by reason of the clause in the charterparty obliging the master to sign bills of lading presented to him by the charterers. Where the charterers have sub-chartered the vessel, the clause in the head charter permitting the head charterers to present bills of lading to the master for his signature by necessary implication...