Alpine Bulk Transport Co Inc v Saudi Eagle Shipping Co Inc (the “Saudi Eagle”) 1986
- Reported: [1986] 2 LLOYDS REP. 221
- Year: 1986
- Court: Court of Appeal
FACTS:-
The Claimant’s were the charterers of the vessel Saudi Eagle. An agreement was made on a liner booking note dated 29th October 1981 which was made between Saudi International Shipping SA who were acting as managers for the owners as carrier and the plaintiffs who chartered the vessel. The vessel was Saudi Ambassador. The contract was made expressly subject to the terms of the Conlinebill form which was printed on the back of the document.
The contract included:
The contract evidenced by this Bill of Lading is between the Merchant and the Owner of the vessel….and it is therefore agreed that said shipowner only shall be liable for any damage or loss due to any breach or non-performance of any obligation arising out of the contract…It is further understood and agreed that as the …Agent who has executed this Bill of Lading for and on behalf of the Master is not a principle in the transaction said…Agent shall not be under any liability arising out of the contract of carriage…
The Claimant claimed damages for breach of contract by the defendants who refused to load the cargo.
On 29th October 1982 the Claimants arrested Saudi Eagle at Rotterdam. The defendants gave security in the form of a bond from the Amsterdam/Rotterdam bank and obtained the release of the ship.
A year later the Claimants issued with leave a writ for service out of the jurisdiction and served it 10 months later in August 1984, in Saudi Arabia. No notice of intention to defend was given and interlocutory judgement was signed on 1st October 1984. An order for assessment of damages was made and damages were assessed on 18th April 1985. Final judgement was given in US $49,000 and costs in the sum of £3000.
A deliberate decision was taken in August 1984 not to defend the Claimant’s claim because the Defendant’s had no assets. Soon after the final judgement was given the Defendant’s remembered that the Claimant had obtained security in Rotterdam in 1982 and were holding the bond. The defendants applied to set aside the judgment and for leave to defend contending that the Claimant’s had sued the wrong Defendant’s.
In the Court of First instance, Staughton, J held that the application would be dismissed. There was an arguable point that the Claimant’s should have sued Saudi Ambassador Shipping Co Ltd or Saudi International Shipping Co and not Saudi Eagle Shipping Co. Ltd. Staughton further held that the Defendant’s had deliberately allowed the Claimant’s claim to go by default and were not deserving of the Court’s exercise of its discretion in their favour.
The Defendant’s appealed.
HELD:-
O’Connor LJ and Sir Roger Ormrod held that:
1) There was no substance in the suggested defences that it was the wrong Claimant and the wrong contract.
2) The addendum No. 1 which substituted Saudi Eagle for Saudi Ambassador could have been construed as changing the status of Saudi International Shipping S.A but any ambiguity was resolved .
3) On the evidence the Defendant’s had not shown that they had a defence which had any reasonable prospect of success. The conduct of the Defendant’s deliberately deciding not to give notice of intention to defend because it suited their interests not to do so was a matter to be taken into account in assessing the justice of the case.
Ormrod referred to the addendum in his judgement. In the course of the argument Mr Clarke, QC, acting for the Defendant’s relied strongly upon the submissions that the Defendant’s could not have been parties to the addendum 1 because at the material time Saudi Eagle was on time charter to Saudi International Shipping Co. Ltd. who were acting as principals in the trancaction recorded Addendum No 1. Ormrod stated that this was an important point which was not argued before the learned judge. It was found no dates were given for the period of the Charter. The evidence and affidavits fell short of proof that the Saudi Eagle was on time charter Saudi International Shipping at the relevant time. Ormrod concluded that he did not think that the defendants had shown that they have a defence with any reasonable prospect of success.
Ormrod further held that whilst the Defendant’s conduct did not amount to an estoppel in law, the Court can and must consider it. The principle of election and the maxim about approbating and reprobating are, in origin, rules of equity and as such give some indication of where the justice of a case may lie.
The Appeal was dismissed with costs here and below, leave to appeal to the House of Lords was refused.
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