T-2219-96
Between:
JIAN SHENG CO. LTD.,
Plaintiff,
- and -
GREAT TEMPO S.A.,
SINOTRANS CANADA INC.,
and the owners and others
interested in the ship
"TRANS ASPIRATION",
Defendants.
REASONS FOR ORDER
JOHN A. HARGRAVE
PROTHONOTARY
These reasons arise out of the motion of the Defendant, Great Tempo S.A., to stay this action pursuant to a jurisdiction clause in favour of Hong Kong contained in a 13 March, 1996 bill of lading (the "Bill of Lading") for carriage of lumber, some of which constituted deck carriage, from Nanaimo, BC, to Taiwan. About one quarter of the whole cargo of packaged lumber, constituting a substantial portion of that which was carried on deck, was lost overboard during the voyage. The Plaintiff claims, for loss of and damage to the lumber, the sum of $395,865.92 (U.S.).
At the time of the application, I gave Great Tempo S.A. leave to file a conditional appearance, but reserved my decision for the matter of the stay was not without difficulty by reason of a booking note calling for arbitration in Vancouver, on the one hand, and a Bill of Lading provision requiring disputes to be decided in the country where the carrier has its principal place of business, on the other hand.
BACKGROUND
The facts leading up to the issuance of the Bill of Lading are important. They are set out in the no-nonsense affidavit of Gloria McNeil, the transportation broker with the long-established firm of Canadian Transport Company Limited ("Canadian Transport"). In February of 1997, Ms. McNeil booked the space for a 2,300 to 2,500 MFBM lumber cargo on the "Trans Aspiration" through Sinotrans Canada Inc. ("Sinotrans") of Vancouver. She had previously booked similar cargoes with Sinotrans and believed Sinotrans would be the carrier, as set out on the standard form Canadian Transport booking note.
The booking note contains, on its face, in reasonable sized print, two clauses which are pertinent:
| The parties further agree that the following conditions form part of the contract of carriage. If any of them are inconsistent with the Carrier's conditions of carriage, the Carrier in accepting this space booking agrees that the conditions herein prevail. |
| Any dispute arising out of or in connection with this booking shall be referred to arbitration at Vancouver for final determination in accordance with the rules of the Vancouver Maritime Arbitrators Association ("VMAA"). |
Ms. McNeil points out the booking note was not signed by Sinotrans, but her evidence is that she has booked previous shipments on other vessels with Sinotrans and all of them have been confirmed with a booking note containing the same terms and conditions. She concludes by deposing she believes the carrier would be Sinotrans, and was never told either that the carrier would be any other entity, or that the carriage would be subject to any jurisdiction other than Vancouver.
The evidence of Gloria McNeil is not rebutted directly by Sinotrans, a British Columbia company with an office in Vancouver. However, Sinotrans recently provided solicitors for the Defendant with a memo in which they profess to be agents only, without identifying their principal, but stating they at no time were charterers of the "Trans Aspiration".
An important issue is the identity of the carrier. The Bill of Lading, on a generic form, was issued March 13, 1996, by Sinotrans, in favour of Taipei Business Bank, with Jian Sheng Co. Ltd., a Taiwanese company and the Plaintiff in this present action, as the party to be notified. Sinotrans signed "AS AGENTS ONLY FOR CARRIER: TRANS ASPIRATION. This is of no help in determining the identity of the carrier. The "Trans Aspiration" is owned by Great Tempo S.A. of Panama. However, counsel for Great Tempo S.A. says the charterer of the "Trans Aspiration" is Sinotrans (Bermuda) Ltd.
Mr. Samson Lok of Wah Tung Shipping Agency Co. Ltd. ("Wah Tung") of Hong Kong deposes that Wah Tung is the manager of and conducts all of the business of Great Tempo S.A. from Hong Kong. But nowhere does anyone specifically identify Great Tempo S.A. as the carrier, an important point when it comes to construing the jurisdiction clause on the reverse of the Bill of Lading.
In puzzling over the identity of the carrier, I do not overlook the identity of carrier clause on the reverse of the Bill of Lading, Clause 17, which purports to identify the carrier as the owner of the vessel. As Professor Tetley points out in his third edition of Marine Cargo Claims, 1988, Blais International Shipping Publications, notwithstanding any identity clauses or demise clauses, the shipowner and the charterer are jointly and severally liable as carriers: see pp. 234 et seq. and 242 et seq. This line of reasoning is implicitly recognized in the Identity of Carrier Clause in the Bill of Lading which provides that if any other entity is determined to be the carrier, that entity is entitled to the limitations and exhonorations contained in the Bill of Lading.
The jurisdiction clause on the reverse of the Bill of Lading is as follows:
| 3. Jurisdiction. |
| Any dispute arising under this Bill of Lading shall be decided in the country where the carrier has his principal place of business, and the law of such country shall apply as provided elsewhere herein. |
ANALYSIS
At present the position of the Defendant, Sinotrans Canada Inc., whether it is an agent for an undisclosed principal, or a carrier, is not at issue for Sinotrans has not yet been served. Sinotrans (Bermuda) Ltd., the apparent charterer, is not a party. Thus the issue is whether the Defendant, Great Tempo S.A., is entitled to a stay of the Canadian proceedings in favour of the courts in Hong Kong. Great Tempo S.A. says it wishes to litigate in a convenient and familiar forum. To achieve this end it will waive any time bar and will replace the security given in Canada, which is only applicable to this Federal Court proceeding, with equivalent security in Hong Kong.
I have denied this application. While the booking note is, in this instance, a part of the contract of carriage, which supersedes some of the provisions in the Bill of Lading, it is a contract between the shipper and the carrier and while the shipper might require arbitration in Vancouver, that portion of the contract is not assigned by endorsing the Bill of Lading to the notify party, the Plaintiff in this instance. It is a contract upon which McMillan Bloedel Limited, the shipper, might sue and enforce, but it may not be enforced by the Plaintiff. However, the jurisdiction clause contained in the Bill of Lading is void for uncertainty and thus there will be no stay. I question, but do not have to decide, whether the Defendant has met the test for a stay set out in The "Eleftheria", [1969] 1 Lloyd's 237. I now consider all of this in more detail, beginning with the booking note.
The Booking Note
A bill of lading is not necessarily the contract of carriage. Indeed, Lord Bramwell, in Sewell v. Burdick, (1884) 10 App. Cas. 74, put it even more strongly:
| To my mind there is no contract in it. It is a receipt for the goods, stating the terms on which they were delivered to and received by the ship, and therefore excellent evidence of those terms, but it is not a contract. That has been made before the bill of lading was given. |
| (p. 105) |
This passage was picked up by Lord Goddard, C.J., in The "Ardennes", [1951] 1 K.B. 55, which is worth quoting at length:
| It is, I think, well settled that a bill of lading is not in itself the contract between the shipowner and the shipper of goods, though it has been said to be excellent evidence of its terms: Sewell v. Burdick, per Lord Bramwell (10) and Crooks v. Allan (11). The contract has come into existence before the bill of lading is signed; the latter is signed by one party only, and handed by him to the shipper usually after the goods have been put on board. No doubt if the shipper finds that the bill contains terms with which he is not content, or does not contain some term for which he has stipulated, he might, if there were time, demand his goods back; but he is not, in my opinion, for that reason, prevented from giving evidence that there was in fact a contract entered into before the bill of lading was signed different from that which is found in the bill of lading or containing some additional term. He is no party to the preparation of the bill of lading; nor does he sign it. It is unnecessary to cite authority further than the two cases already mentioned for the proposition that the bill of lading is not itself the contract; therefore in my opinion evidence as to the true contract is admissible. |
| (pp. 59 and 60) |
Indeed, in Cormorant Bulk-Carriers Inc. v. Canficorp (Overseas Projects) Ltd. (1984), 54 N.R. 66, the Federal Court of Appeal applied, among other authorities, The "Ardennes". Mr. Justice Stone pointed out, quite forcefully, that the contract is not contained in the bill of lading, but rather is the contract covered by the bill of lading which might, as in the Cormorant case, include the booking note. In that instance he concluded that the booking note and bill of lading represented a single contract (pp. 73 through 75). Similarly, as to the booking note and Bill of Lading representing a single contract, see Canastrand Industries Ltd. v. The "Lara S" (1993), 60 F.T.R. 1 at pp. 18 and 19. In The "Lara S" Madame Justice Reed gave precedence to the terms in the bill of lading because it contained a superseding clause. Here it is the booking note which contains the superseding clause.
Where the Plaintiff's argument breaks down, in this instance, is that the Plaintiff was not a party to the booking note, which was between the shipper, McMillan Bloedel Limited and Sinotrans' principal, whenever that may be. McMillan Bloedel Limited might well be able to enforce the provisions contained in the booking note, as a special contract, or even to sue on behalf of Jian Sheng Co. Ltd.1; but Jian Sheng Co. Ltd., as the only Plaintiff in the proceeding, cannot sue on that portion of the contract in the booking note as it is not a party to the booking note. The Canadian Bill of Lading Act is of no assistance as the Act specifically passes the contract expressed in a bill of lading. Nor is there anything to establish either that McMillan Bloedel Limited were agents for the Plaintiff or that the Plaintiff in any way obtained the benefit of the portions of the contract contained in the booking note when it took up the Bill of Lading.
Ambiguity in the Jurisdiction Clause
Professor Tetley in his work on Marine Cargo Claims (supra) is of the view that jurisdiction clauses must be clear and precise before they ought to be honoured:
| Unless the jurisdiction clause is clear and precise, it should not be honoured because it will not allow the parties to know with certainty before which court they are to proceed. In some countries a jurisdiction clause is not valid unless the name of the actual court is spelled out. (Page 816.) |
More specifically Professor Tetley goes on to refer to European case authority to cast doubt on a clause calling for suit in the country in which the carrier has its head office.
Several years after the publication of the third edition of Marine Cargo Claims, five defendants and a jurisdiction clause in The "Rewia" somewhat confused Mr. Justice Sheen, [1991] 1 Lloyd's 69, who was then reversed as to jurisdiction by the Court of Appeal, [1991] 2 Lloyd's 325. Mr. Justice Sheen acknowledged that the question as to who might be the parties to the contract of affreightment could not be answered until all the evidence was before the trial judge, however he did deal with the issue of a stay. The bills of lading provided that disputes would be decided in the country where the carrier had its principal place of business. The bills of lading were on a standard form with the name of a defendant, Caribbean Liners (Caribtainer) Ltd., clearly printed on them and with no indication that Caribtainer was not either the carrier or the owner of the "Rewia". The contract had been made by one of the Plaintiffs with the local agent for Caribtainer. The local agent had signed the bills of lading on behalf of the master. Another defendant, Rewia Shipping Co., the owner of the "Rewia", had its place of business in Germany, but was incorporated in Liberia. The "Rewia" was managed by Turbata Co. Ltd. of Hong Kong: indeed, Turbata handled all of the business of Rewia Shipping Co.
Rewia Shipping Co. claimed the bills of lading were charterers' bills of lading and if that was the case and if the correct jurisdiction to bring the claim was in Germany, the Plaintiffs would not be able to recover.
Mr. Justice Sheen concluded that the central management and control of Rewia Shipping Co. was exercised in Hamburg but notwithstanding the domicile of the owners, in Germany, he held that the principal place of business of the carrier was in Hong Kong, the jurisdiction from which the ship was managed. Rewia Shipping Co., the Liberian incorporated German-based shipowner appealed.
The Court of Appeal pointed out that, "the principal place of business is not necessarily the place where most of the business is carried out," (page 334). The court then found principal place of business of the carrier to be in Hamburg, for notwithstanding that the Hong Kong agent, Turbata Co. Ltd., had a free hand in the day-to-day management of the vessel from Hong Kong, all that it did was, in the final analysis, subject to the control of the directors in Hamburg.
In the present instance there is no real indication on the Bill of Lading, or in any of the evidence tendered, as to who Sinotrans Canada Inc. thought they were signing the Bill of Lading for. They merely signed "as agents for the owner: Trans Aspiration". Logically, if the "Trans Aspiration" were on charter, to Sinotrans (Bermuda) Ltd., as contended by counsel for Great Tempo S.A., it would be a charterer's bill of lading and notwithstanding the identity of carrier clause on the reverse, Sinotrans (Bermuda) Ltd. might be either the carrier or a carrier. There is nothing in the Bill of Lading to identify the carrier: nowhere in the evidence tendered on behalf of the Defendant Great Tempo S.A. does anyone come right out and say that Great Tempo S.A. is in fact the carrier. However it does appear that Great Tempo S.A. is the owner of the "Trans Aspiration" and thus might be the carrier or a carrier.
Mr. Lok, of Wah Tung Shipping Agency Co. Ltd. of Hong Kong, deposes that his firm conducts one hundred per cent of the business of Great Tempo S.A., "although Great Tempo S.A. is registered as a Panamanian company." He does not say from where the Board of Directors of Great Tempo S.A. gives overall direction to Wah Tung, including the Board's direction that Wah Tung manage the "Trans Aspiration".
A jurisdiction clause in a bill of lading has as a main purpose the clear and precise designation of the jurisdiction in which a cargo owner ought to sue when the carriage of its cargo has gone wrong. In the present instance and considering the Court of Appeal's views in the "Rewia", Jian Sheng Co. Ltd., the Plaintiff, might equally conclude it ought to sue: (1) Sinotrans (Canada) Ltd., who says it is an agent, but who does not disclose its principal and whom the shipper understood to be the carrier, in Vancouver; or (2) Sinotrans (Bermuda) Ltd., in Bermuda; or (3) Great Tempo S.A., in its place of incorporation, Panama; or (4) Great Tempo S.A., where its Board sits, in some unknown jurisdiction. On the basis of the "Rewia", the Plaintiff could conclude it probably ought not to sue Great Tempo S.A. in Hong Kong, merely on the basis that Wah Tung Shipping Agency Co. Ltd., who have only just now surfaced, is the manager of the "Trans Aspiration".
The jurisdiction clause in this instance offers no guide, let alone certainty, as to where an action on the Bill of Lading ought to be commenced. The jurisdiction clause is thus void for uncertainty.
CONCLUSION
During the course of the competent argument of this motion, counsel dealt with a number of interesting points. They argued, among other matters, the application of the elements of the test for a stay applied by Mr. Justice Brandon, as he then was, in the "Eleftheria" (supra at page 242), including where the evidence might best be available; whether the Plaintiff would be prejudiced by the procedure in Hong Kong, among other things, by a lack of examination for discovery which might be most useful in this sort of case; and whether the Plaintiff, a Taiwanese company, could have witnesses attend and so get a proper trial in Hong Kong, once it came under the control of China later this year. As interesting as these points are, I may avoid them because jurisdiction is not in Hong Kong, in any event. This is so by reason of uncertainties inherent in the jurisdiction clause in the bill of lading, when it is looked at not entirely from the viewpoint of the wording of a standard generic printed form, but also against the background of this particular carriage. In the result I have exercised my discretion by refusing a stay. Costs will be in the cause.
(Sgd.) "John A. Hargrave"
Prothonotary
April 7, 1997
Vancouver, British Columbia
__________________1 See Dunlop v. Lambert, [1839] 6 Cl. & F. 600 at 626-627, 7 E.R. 824 and The "Albazero", [1976] 2 Lloyd's 467 at 473 and ff. (H.L.)