FEDERAL COURT OF AUSTRALIA

Poralu Marine Australia Pty Ltd v MV Dijksgracht [2023] FCAFC 147

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed in part.

2.    The amended notice of contention be dismissed.

3.    The cross-appeal be dismissed.

4.    The answers to the separate questions in order 1 made on 6 September 2022 be set aside and in lieu thereof it be ordered that:

Question 1:    With regard to the limitation of liability regime applicable to the plaintiff’s claim in all the circumstances:

(a)    Is any liability of the carrier limited to £100 per package?

Answer: No.

(b)    Is any liability of the carrier limited to the present value of £100 of gold in 1924 per package?

Answer: No.

(c)    Is any liability of the carrier limited to 666.67 units of account per package or 2 units of account per kilogramme of gross weight of the goods (whichever the higher)?

Answer: Yes, unless Art 4(5)(e) of the Hague-Visby Rules (being as set out in the Third Schedule to the Merchant Shipping (Liability of Shipowners and Others) Act 1996 (IRE)) is found to apply.

Question 2:    Does the answer to Question 1 apply equally to the plaintiff’s claims in bailment and negligence?

Answer: Yes.

5.    Unless any party files and serves written submissions limited to three pages and any evidence in support on or before 15 September 2023:

(a)    Order 1 made on 5 October 2022 be set aside and in lieu thereof it be ordered that:

1.    The defendants pay the plaintiff’s costs of the hearing and determination of question 1.

2.    The plaintiff pay the defendants’ costs of the hearing and determination of question 2.

(b)    the respondents pay the appellant’s costs of the appeal in respect of question 1 and the appellant pay the respondents’ costs in respect of question 2.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed in part.

2.    The amended notice of contention be dismissed.

3.    The cross-appeal be dismissed.

4.    The answers to the separate questions in order 1 made on 6 September 2022 be set aside and in lieu thereof it be ordered that:

Question 1:    With regard to the limitation of liability regime applicable to the plaintiff’s claim in all the circumstances:

(a)    Is any liability of the carrier limited to £100 per package?

Answer: No.

(b)    Is any liability of the carrier limited to the present value of £100 of gold in 1924 per package?

Answer: No.

(c)    Is any liability of the carrier limited to 666.67 units of account per package or 2 units of account per kilogramme of gross weight of the goods (whichever the higher)?

Answer: Yes, unless Art 4(5)(e) of the Hague-Visby Rules (being as set out in the Third Schedule to the Merchant Shipping (Liability of Shipowners and Others) Act 1996 (IRE)) is found to apply.

Question 2:    Does the answer to Question 1 apply equally to the plaintiff’s claims in bailment and negligence?

Answer: Yes.

5.    Unless either party files and serves written submissions limited to three pages and any evidence in support on or before 15 September 2023:

(a)    Order 1 made on 5 October 2022 be set aside and in lieu thereof it be ordered that:

1.    The defendant pay the plaintiff’s costs of the hearing and determination of question 1.

2.    The plaintiff pay the defendant’s costs of the hearing and determination of question 2.

(b)    the respondent pay the appellant’s costs of the appeal in respect of question 1 and the appellant pay the respondents’ costs in respect of question 2.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

RARES AND SARAH C DERRINGTON JJ:

INTRODUCTION

1    It will be a century next year since the first attempt at achieving some level of universal uniformity in respect of a cargo liability regime for the international carriage of goods by sea. On 25 August 1924, the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (Hague Rules) opened for signature. Those Rules were amended by the Protocol to amend the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading, opened for signature on 23 February 1968 (Visby Protocol), and then again by the Protocol amending the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading, 25 August 1924, as amended by the Protocol of 23 February 1968, opened for signature on 21 December 1979 (SDR Protocol). Together these three international instruments are known as the Hague-Visby Rules.

2    Two subsequent attempts have been made to modernise the cargo liability regime for international sea carriage, namely the United Nations Convention on the Carriage of Goods by Sea, 1978, opened for signature 31 March 1978, 1695 UNTS 3 (entered into force 1 November 1992), known as the Hamburg Rules, and the United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea, opened for signature 11 December 2008, UN Doc A/RES/63/122; 48 ILM 659 (not yet in force), known as the Rotterdam Rules, but these have not been met with international acceptance and are not presently relevant.

3    Australia has taken a bespoke approach to modernising its marine cargo liability regime. Having originally acceded to the Hague Rules, and the subsequent Visby and SDR protocols, it enacted the Hague-Visby Rules by Schedule 1 to the Carriage of Goods by Sea Act 1991 (Cth) (COGSA 91). By instrument of denunciation deposited on 16 July 1992, Australia denounced the Hague Rules. Following a review conducted in 1995-1996, under the auspices of the Department of Transport and Regional Development, the Carriage of Goods by Sea Amendment Act 1997 (Cth) was passed. That Act provided for regulations to amend COGSA 91 to add a schedule of modifications that would modify the text of the Hague-Visby Rules set out in Schedule 1. Schedule 1A to COGSA 91 was inserted by the Carriage of Goods by Sea Regulations 1998 (Cth), which were proclaimed on 30 June 1998. Although the modified Rules in Schedule 1A continue to be referred to as the “amended Hague Rules”, they are referred to throughout these reasons as the Australian Rules.

4    All of this is to explain the somewhat surprising feature of this appeal: that, in 2023, there remains uncertainty as to whether the almost 100-year-old Hague Rules apply to a contract of carriage negotiated in late 2019 by a French ship and chartering broker with a Dutch carrier. The contract involved a shipment from Ireland, a country that has not ratified the Hague-Visby Rules (but has enacted them by domestic statute), to Australia, which has enacted a version of the Hague-Visby Rules modified by domestic statute (despite having denounced the Hague Rules), and to which the consignee asserts English law applies.

5    These appeals concern the identification of the terms, and the construction, of a contract of carriage between the appellant, Poralu Marine Australia Pty Ltd as consignee, and the second respondent, Spliethoff Transport BV as carrier, for a shipment of a cargo of 23 pontoons from the port of Cork, Ireland, to the port of Geelong, Australia, on board MV Dijksgracht. The cargo was discharged on 13 February 2020 at Geelong. Poralu alleges that cargo was loaded on board in sound condition but that on discharge, three pontoons were found to be damaged.

6    Poralu commenced an action in rem against the vessel, by which it alleged that her owner was Scheepvaartonderneming Dijksgracht CV, and so was the relevant person, within the meaning of s 3(1) of the Admiralty Act 1988 (Cth), which was liable for damages in bailment and negligence. Poralu also commenced another proceeding in personam against Spliethoff (as first defendant) and Scheepvaartonderneming Dijksgracht (as second defendant). The latter was substituted by Rederij Dijksgracht, a Dutch company that claims to be the ship owner. We will refer, where necessary, to the three respondents in the appeals collectively as the carrier.

THE PRIMARY JUDGE’S DECISION

7    The primary judge ordered that a number of separate questions be determined before any others in the two proceedings. The questions, as amended by his Honour, and the primary judge’s answers, are as follows:

Question 1: With regard to the limitation of liability regime applicable to the plaintiff’s claim in all the circumstances:

(a) Is any liability of the carrier limited to £100 per package?

Answer: Yes

(b) Is any liability of the carrier limited to the present value of £100 of gold in 1924 per package?

Answer: No

(c) Is any liability of the carrier limited to 666.67 units of account per package or 2 units of account per kilogramme of gross weight of the goods (whichever is higher)?

Answer: No

Question 2: Does the answer to Question 1 apply equally to the plaintiff’s claims in bailment and negligence against the vessel’s owner?

Answer: Yes

8    Question 1 turned on which cargo liability regime, out of the Hague Rules, the Hague-Visby Rules and the Australian Rules, governed the carriage of the pontoons by sea. If the Hague Rules apply, Arts 4(5) and 9 provide that the carrier and the ship are entitled to limit their liability to the value of the quantity of gold that GBP100 could purchase in 1924: see Brown Boveri (Australia) Pty Ltd v Baltic Shipping Co (1989) 15 NSWLR 448 at 460 per Kirby P and 471 per Hope JA (McHugh JA agreeing). In this event, the answer to question 1(b) will be “Yes”. However if, as Poralu contended, the Hague-Visby Rules apply, the carrier and ship are only entitled to limit their liability to 666.67 Special Drawing Rights per package or unit or two Special Drawing Rights per kilogramme of gross weight of the goods lost or damaged, whichever is the higher, and the answer to question 1(c) will be “Yes”. If, as the carrier contended and the primary judge found, the carrier had a contractual right to limit their liability per package to GBP100 without reference to its gold value at any time, then the answer to question 1(a) will be, as his Honour held, “Yes”.

9    Question 2 concerned whether the answer to question 1 also affected the quantification of the liability of Rederij Dijksgracht in bailment and negligence, as the carrier contended and his Honour held.

10    The primary judge’s answers to the separate questions flowed primarily from his Honour’s conclusions on how the contract of carriage was formed and what were its terms.

11    The primary judge held that the booking note in the form sent on 8 November 2019 by Mr Pierre Gires (who represented Helmgale Sàrl, a ship and chartering broker that was authorised to fix the booking on Poralu’s behalf) to Mr Thomas Zuijderduin (on behalf of Spliethoff) and which Mr Patrick Schweinsbergen accepted on behalf of Spliethoff on 20 November 2019, formed the contract of carriage. The primary judge termed this the booking note contract. The primary judge also held that the sea waybill, signed and stamped by Doyle Shipping Group (Spliethoff’s agent in the Irish port of Cork) on 31 December 2019 and accepted by Poralu, did not amount to or evidence any new or varied contract of carriage between the parties, but served only as a receipt for the cargo. Based on that conclusion, the primary judge went on to find that although it was a term of the contract of carriage that the shipper had a right to demand a bill of lading, Poralu never made such a demand.

12    Next, in concluding that the booking note was governed by Dutch law, his Honour held that the Hague-Visby Rules were not compulsorily applicable to the contract of carriage. Under Dutch Law, both its “formal” and “material” requirements must be satisfied for the Hague-Visby Rules to apply compulsorily. The primary judge held that the “formal” requirement was not satisfied because Ireland is not a Contracting State. His Honour found that, therefore, it was unnecessary to decide whether the “material” requirement was satisfied, viz, whether the contract of carriage was covered by a bill of lading or similar document of title.

13    Further, the primary judge held that, although the Australian Rules were provisionally applicable, since the contract was for the carriage of goods by sea from a port outside Australia to a port in Australia (and because none of the relevant Conventions was otherwise applicable by agreement or law), the Australian Rules did not apply to the contract of carriage because it was a charterparty within the meaning of Art 10(6). In addition, the primary judge held that the sea waybill issued in respect of the cargo was not a “sea carriage document” within the meaning of Art 1(1)(g).

14    Consequently, his Honour held that because of the operation of the Himalaya clause in cl 11 of the booking note contract for which Spliethoff had its authority to contract, first, in the in rem proceeding, the ship and Rederij Dijksgracht (as the relevant person), and secondly, in the in personam proceeding, Spliethoff and Rederij Dijksgracht as owner, were all able to rely on the limitation of liability of GBP100 for each pontoon, based on the limited incorporation of the Hague Rules in cl 3(a) of the booking note contract (which did not include any use of gold value).

Summary of issues

15    By an amended notice of appeal, filed by leave on 22 February 2023 during the hearing of the appeal, Poralu advanced eight principal grounds of appeal. Those grounds can be distilled to the following issues, namely that the primary judged erred in:

(1)    failing to consider Poralu’s case that the second recap email that Mr Gires sent to Mr Jack Oostrum (on behalf of Spliethoff) on 7 November 2019 at 17:08 constituted acceptance of Spliethoff’s counteroffer and amounted to the conclusion of the contract of carriage of the pontoons (ground 1(a));

(2)    finding that the contract of carriage was on the terms of the booking note contract and failing to find that the contract of carriage was on the terms of the second recap (grounds 1(b) and (c));

(3)    finding that the proper law of the contract of carriage was Dutch, and not English, law (ground 1(d));

(4)    finding that the contract of carriage did not include a term that a bill of lading governed by English law would be issued or, alternatively, that Poralu had not demanded a bill of lading (grounds 1(e) and 2);

(5)    finding that Art 10(a) of the Hague-Visby Rules requires that a bill of lading actually be issued and that its place of issue is where it is stamped and signed (ground 3);

(6)    finding that cl 3(a) of the contract of carriage did not incorporate the Hague-Visby Rules contractually within the meaning of Art 10(c) of the Hague-Visby Rules (ground 4);

(7)    finding that:

    first, any bill of lading would have only served the purpose of a receipt and would not evidence the contract of carriage that, accordingly, it did not attract the operation of the Hague-Visby Rules; and

    secondly, the booking note contract, by providing that its terms overrode any inconsistent provisions in any other documents, including a bill of lading, had the effect of precluding the operation of any terms of the bill of lading that were inconsistent with the standard terms of the booking note contract,

(ground 4A);

(8)    finding that the contract of carriage between Poralu and Spliethoff was a charterparty within the meaning of Art 10(6) of the Australian Rules and consequently, that the Australian Rules did not apply compulsorily to the contract of carriage (ground 5);

(9)    not finding that the bill of lading which ought to have been issued was a sea carriage document within the meaning of Arts 1(1)(g)(i) or (iii), and consequently Art 10(6) of the Australian Rules (ground 5A); and

(10)    finding that Spliethoff and Rederij Dijksgracht had proved that Spliethoff had actual authority to enter into the contract of carriage as agent for Rederij Dijksgracht (ground 6).

The amended notice of contention and the cross-appeal

16    By an amended notice of contention filed by leave on 22 February 2023, Spliethoff and MV Dijksgracht contended that the primary judge’s answer to question 1(a) (that the carrier could limit their liability to GBP100 per package) should be affirmed on the further grounds that:

a.    The contractual incorporation of Art 1-8 of the Hague Rules meant that the Hague Rules “have effect in relation to the carriage” within the meaning of Art 10 r 2 of the Australian Hague-Visby Rules.

b.    The requirements of Art 10 rr 6 and 7 must be read together and are not made out so as to re-apply the Australian Hague-Visby Rules in that:

i.    no “negotiable sea carriage document” was issued as required by Art 10 r 7; and

ii.    no such document if it were issued (denied) “regulates the relationship between the holder of it and the carrier of the relevant goods” as required by Art 10 r 7.

17    In the event that the appeal were to be allowed and question 1(a) answered “No”, Spliethoff and MV Dijksgracht cross-appealed contending that the primary judge ought to have answered question 1(b) “Yes”, so that their liability was limited to the present gold value of GBP100 in 1924, on the grounds that:

a.     if the contractual incorporation of Art 1-8 of the Hague Rules with a quantum limitation of £100 in present value would be unenforceable according to the law of the place of delivery (i.e. Australia), then the contractual incorporation of Arts 1-8 should be interpreted as including the definitional provision in Art 9 (i.e. the monetary amount is taken to be gold value in 1924); and

b.    as a result, the Hague Rules “have effect in relation to the carriage” within the meaning of Art 10 r2 of the Australian Hague-Visby Rules, with the quantum limitation of £100 in 1924 gold value per package or unit.

SUMMARY OF OUTCOME

18    For the reasons that follow, the appeal must be allowed in part, and both the amended notice of contention and cross-appeal must be dismissed. This is because, in summary:

(a)    the contract of carriage between Spliethoff and Poralu was constituted by the second recap;

(b)    the second recap incorporated only those terms of Spliethoff’s standard forms of bill of lading (that would be issued and evidence the contract of carriage) and booking note that were not inconsistent with the terms of the second recap, including its agreed rider clauses that provided that the second recap was governed by English law and required disputes to be referred to London arbitration;

(c)    Spliethoff’s standard form bill of lading that was to be issued pursuant to the second reap provided in the general clause paramount in cl 3(a) that, relevantly, “The Hague Rules … as enacted in the country of shipment shall apply to this bill of lading” and, interpreted in accordance with English law, the Hague-Visby Rules as enacted in Ireland, in Schedule 3 of the Merchant Shipping (Liability of Shipowners and Others) Act 1996 (IRE) (MSA), as the country of shipment, would apply to the contract of carriage because:

(i)    by virtue of the reasoning in Kyokuyo Co Ltd v AP Møller-Maersk A/S (trading as ‘Maersk Line’) (The Maersk Tangier) [2018] 2 Lloyd’s Rep 59, the second recap, as the contract of carriage, was covered by a bill of lading within the meaning of Art 1(b) and the chapeau to Art 10 of the Hague-Visby Rules;

(ii)    the Carriage of Goods by Sea Act 1971 (UK) (COGSA 71) s 1(2) gave force of law to the Hague-Visby Rules and, in consequence, cl 3(a) of the bill of lading that would be issued pursuant to the second recap fell within Art 10(c) of those Rules;

(iii)    consequently, the Australian Rules do not apply because of Art 10(2) thereof.

(d)    any liability of the ship and Spliethoff is limited by force of the Hague-Visby Rules as amended by the SDR Protocol (as enacted in Ireland as the country of shipment) to 666.67 units of account per package or 2 units of account per kilogramme of gross weight of the goods (whichever is higher), subject to any determination in relation to breaking the limit under Art 4(5)(e) of the Hague-Visby Rules;

(e)    Rederij Dijksgracht is entitled to rely on the same limitation of liability as the ship and Spliethoff because of the operation of the Himalaya clause in cl 11 of Spliethoff’s standard form bill of lading.

THE ISSUES THAT DO NOT ARISE

19    Given these conclusions, it is unnecessary to consider whether or not:

(a)    the contract of carriage between Poralu and Spliethoff ought properly be characterised as a charterparty (issue 8). That is because, however that contract be characterised, it incorporated the terms of the bill of lading which, as is explained below, resulted in the Hague-Visby Rules as enacted in Ireland being compulsorily applicable under English law (as explained at [101] to [107] below); and

(b)    the bill of lading which ought to have been issued was a sea carriage document within the meaning of Arts 1(1)(g)(i) or (iii), and consequently Art 10(6) of the Australian Rules (issue 9) (as explained at [145] to [147] below).

WHAT WAS THE CONTRACT OF CARRIAGE AND WHERE WERE ITS TERMS RECORDED?

Factual background

20    The legal effect of the second recap is at the centre of the issue of when the contract of carriage of the pontoons was formed. The negotiations relevant to the formation of the contract were conducted between Helmgale, an experienced French ship and chartering broker acting on behalf of Poralu, and Spliethoff, an experienced Dutch carrier. However, the only evidence of those negotiations before the primary judge consisted of emails between officers of Helmgale and Spliethoff, that commenced with the first recap sent by Mr Gires, on behalf of Helmgale, to Mr Oostrum, on behalf of Spliethoff, on 7 November 2019 at 16:04. As can be seen below, there must have been detailed discussions before the first recap was sent.

21    Commercial imperatives were central to the negotiations, as evidenced by the correspondence between the parties both immediately prior to the conclusion of the contract asserted by each side and, to the extent that it is permissible to refer to post-contractual communications, the subsequent email correspondence. An example is found in an email from Mr Gires to Mr Zuijderduin on 9 December 2019 referring to “commercial discussion prior this booking” in relation to the preferred anchorage location.

The terms of the first recap

22    As we have noted above, the evidence of contractual formation only began when Mr Gires sent the first recap to Mr Oostrum at 16:04 on 7 November 2019, which was clearly well after their negotiations had commenced.

23    The first recap was in the following terms:

Jack/Pierre

confirm having fixed sfoar=

-intended vsl mv Dynamogracht – final performing vsl to be nominated latest 15th November

FOR ACNT TPI, FRANCE

part cargo of 23 pontoons as described – total 3580 cbm Pontoons to be stackabke 2 tiers max

PL =

9Nr. 15m x 6.1m x 1.61m each weighing 80T 3Nr. 16.5m x 6.1m x 1.61m each weighing 85T 6Nr.22m x 5.1m x 1.41m each weighing 80t 5Nr. 22m x 5.3m x 1.41m each weighing 80T

-on/under deck in owners option. Deckcargo at chrtrs risk and expense

-POL: Cork Ringaskiddy Terminal

-POD: Geelong anchorage where max draft is 7.5m if allowed by harbourmaster or Geelong port, in charterers option

-discharge into water

-laycan 10/15th December 2019

-freight: Eur 130,-- per frtton

-Terms and conditions:

-Liner in hook / Liner-out hook

-Hooking on /off for Merchant’s / Receivers account -Loading Discharging as fast as vessel can

-detention euro 13.500,-- pdpr

-transit time max 50 days agw/wp/wog

–latest arrival 31st January - penalties for late arrival applicable if vsl exceeds 50 days transit, weather permitting and force majeure excepted Penalties 0.5pct of freight upto max 5pct of the total freight.

-cargo to be fumigated, if required, by merchant’s at their risk and account and valid certificates to be provided to owners.

– intended rotation to be supplied prior firm fixture

-Terms and conditions :

-Time lost due to swell, port congestion and/or in waiting for berth to count as time for which damages for detention are due irrespective whether the Carrier or the Merchant selected the berth, -if discharge at anchorage any time lost due to swell to count as time on detention.

- Carrier’s Agents at both ends (pls adv details )

-Taxes/dues/duties levied on or over the performing vessel to be for Carrier’s account-Taxes/dues/duties calculated on or over the freight and/or cargo to be for Merchant’s account -UK Dock dues or Irish equivalent on cargo (if any) for merchants account -Tonnage dues are charged on vessel and are for carrier’s account

-Otherwise as per Carrier’s WWBN including rider clauses / BL including English law and London Arbitration => to be provided

- Commission = 2.5pct to helmgale on fdd

-Sub shipper reconfirmation to be lifted max 24 hrs after fixing main terms

-Subject Carrier’s approval of transport drawings/technical details.

END

pls confirm

thanks sofar

Pierre GIRES

Helmgale Sàrl

(Emphasis added.)

24    Mr Oostrum, on behalf of Spliethoff, sought a single correction to the first recap in his email to Mr Gires sent at 16:16 on 7 November 2019, in the following terms:

Pierre / Jack

Gd day

Nearly correct..

Please delete “vsl to arrive latest 31st January”, because we agreed a max 50 days transit and then penalties apply

Otherwise fine with me.

Thanks fixture so far and awaiting subs tomorrow

regards

Jack Oostrum

(Emphasis added.)

The terms of the second recap

25    Mr Gires replied with the second recap on 7 November 2019 at 17:08 that incorporated the single and only change that Mr Oostrum had sought, being Poralu’s acceptance of Spliethoff’s requested correction. Poralu contended that the second recap concluded the contract of carriage.

26    The primary judge set out the second recap in his reasons, helpfully numbering the lines “for ease of reference”. His Honour inserted in square brackets descriptions or explanations of chartering abbreviations or his understanding of short-hand used by the parties. We have set out below the relevant portions of the second recap using the primary judge’s numbering and annotations (in italics), together with our own explanations. Lines 1 to 5 provide:

1    Subject: RE: recap Cork/Geelong

2    Date: 07/11/2019 17:08:52

3    …

4    Jack/Pierre [ie, to Jack from Pierre]

5    sorry for this omission, revised recap asf = [ie, agreed so far]

(Bold emphasis added; italicised words added by the primary judge.)

27    As explained below at [70], lines 6 and 7 were requests for documents that the recap intended be used later in accordance with lines 46, 53, and 54. Lines 6 and 7 provide:

6    can you pls provide agency details both ends ?

7    pls also provide your BN, riders and BL

28    Lines 8 and 58 referred to the carrier’s need to have the technical details and transport drawings to understand the nature of the cargo so that it could both nominate a performing vessel, if MV Dynamogracht were not to be used, and work on what it needed to do to ensure that it could be in a position to load, carry and discharge the special cargo in the same good order and condition as loaded. Lines 8 to 10 provide:

8    will most probably have the tech drawings tomorrow morning and chrtrs

9    subs shall follow

10    -intended vsl mv Dynamogracht – final performing vsl to be nominated

(Emphasis added.)

29    Lines 11 to 20 provided that the carrier was free to nominate a vessel by 15 November 2019 to carry the cargo (described in lines 13 to 19) wherever, on or under deck at its option and, if the carrier put all or any of the cargo on deck, the charterer accepted that it bore the risk and expense of that choice by the carrier. Lines 11 to 20 are:

11    latest 15th November

12    FOR ACNT TPI, FRANCE

13    part cargo of 23 pontoons as described – total 3580 cbm Pontoons to be

14    stackabke 2 tiers max

15    PL = [ie, packing list]

16    9Nr. 15m x 6.1m x 1.61m each weighing 80T

17    3Nr. 16.5m x 6.1m x 1.61m each weighing 85T

18    6Nr.22m x 5.1m x 1.41m each weighing 80T

19    5Nr. 22m x 5.3m x 1.41m each weighing 80T

20    -on/under deck in owners option. Deckcargo at chrtrs risk and expense

(Bold emphasis added; italicised words added by the primary judge.)

30    Lines 21 and 22 identify Cork as the port of loading and Geelong as the port of discharge. Line 22 also described the maximum draft at Geelong (7.5 metres), being a matter relevant to the nomination of the performing vessel, and lines 23 and 24 gave the charterer the option of discharging the pontoons into the water if the harbourmaster or the port permitted this to occur. Lines 21 to 24 provide:

21    -POL [ie, port of loading] : Cork Ringaskiddy Terminal

22    -POD [ie, port of discharge] : Geelong anchorage where max draft is 7.5m

23    if allowed by harbourmaster or Geelong port, in charterers option

24    discharge into water

(Bold emphasis added; italicised words added by the primary judge.)

31    The vessel could arrive at Cork between 10 and 15 December 2019. The freight rate was €130 per freight ton. Thus, the approximate total freight was €241,150 (1855 tons x €130). Lines 25 and 26 provide:

25    -laycan 10/15th December 2019

26    -freight: Eur 130,-- per frtton [ie, freight ton]

(Italicised words added by the primary judge.)

32    The carrier’s risk and the basis of the freight commenced and ended when the pontoons were put on and later released off the hooks for the carriage, on either side of which the merchant or receiver was at risk and liable for any costs. The discharge had to occur as fast as the vessel could perform it. Lines 27 to 31 provide:

27    -Terms and conditions :

28    -Liner in hook / Liner-out hook

29    -Hooking on /off for Merchant’s / Receivers account -Loading Discharging

30    as fast as vessel can

31    -detention euro 13.500,-- pdpr [ie, per day pro rata]

(Italicised words added by the primary judge.)

33    The maximum transit time between Cork and Geelong was 50 days, all going well, weather permitting but without a guarantee. We interpolate that lines 32 and 33 of the second recap below accepted Mr Oostrum’s request that “vsl to arrive latest 31st January” be deleted from the first recap version because of their prior agreement. The carrier had to pay an agreed penalty of 0.5% of the total freight up to a maximum of 5% (or about €12,057.50) if the vessel arrived after the 50 days allowed for her voyage, except if the weather or a force majeure occurred that caused the voyage to be prolonged beyond that time. Lines 32 to 36 provide:

32    -transit time max 50 days agw/wp/wog [ie, all going well / weather

33    permitting / without guarantee]

34    penalties for late arrival applicable if vsl exceeds 50 days transit, weather

35    permitting and force majeure excepted Penalties 0.5pct of freight upto

36    max 5pct of the total freight.

(Italicised words added by the primary judge.)

34    The merchant could fumigate the cargo at its own cost and risk and, if it did so, had to provide valid certificates to the owner (carrier). Lines 37 to 38 provide:

37    -cargo to be fumigated, if required, by merchant’s at their risk and account

38    and valid certificates to be provided to owners.

(Emphasis added.)

35    The carrier had to provide information about the performing vessel’s intended rotation to the merchant before a firm fixture. Line 39 provides:

39    – intended rotation to be supplied prior firm fixture

36    The merchant had to pay liquidated damages at the rate of €13,500 per day pro rata for time lost due to swell, port congestion and or waiting for a berth, irrespective of whether the carrier or merchant had chosen the berth or if swell delayed the vessel discharging at anchorage (lines 31, 40 to 45). Lines 40 to 45 provide:

40    -Terms and conditions :

41    -Time lost due to swell, port congestion and/or in waiting for berth to

42    count as time for which damages for detention are due irrespective

43    whether the Carrier or the Merchant selected the berth,

44    -if discharge at anchorage any time lost due to swell to count as time on

45    detention.

46    Carrier’s Agents at both ends (pls adv details )

(Emphasis added.)

37    The carrier would be liable for all taxes, dues, or duties, including tonnage dues that were levied on or over the performing vessel in respect of the carriage of the pontoons, while any taxes, dues, or duties, including Irish or United Kingdom dock dues or their equivalent, levied on the freight payable or the cargo were the merchant’s responsibility. Lines 47 to 52 provide:

47    -Taxes/dues/duties levied on or over the performing vessel to be for

48    Carrier’s account

49    -Taxes/dues/duties calculated on or over the freight and/or cargo to be for

50    Merchant’s account

51    -UK Dock dues or Irish equivalent on cargo (if any) for merchants account

52    -Tonnage dues are charged on vessel and are for carrier’s account

(Emphasis added.)

38    The statement in lines 53 and 54 “Otherwise as per Carrier’s WWBN including rider clauses/BL including English law and London Arbitration => to be provided” would have been understood by a reasonable person in the trade of arranging sea cargo and charters to mean that, first, matters not addressed in the second recap would be governed by the carrier’s standard form of its worldwide booking note, that necessarily would include the rider clauses that had been expressly agreed, and the carrier’s standard bill of lading which it was to provide (as lines 7 and 54 requested). Secondly, those two standard forms would be varied to specify, if they did not already require, that English law was the governing law under both the second recap and each form, and any disputes would be referred to arbitration in London. Lines 53 to 54 provide:

53    -Otherwise as per Carrier’s WWBN including rider clauses / BL including

54    English law and London Arbitration => to be provided

(Emphasis added.)

39    Helmgale was entitled to commission on the freight, demurrage, and any deadfreight of 2.5% (or, based only on the freight, about €6028.75) (line 55). Lines 55 to 56 provide:

55    - Commission = 2.5pct to helmgale on fdd [ie, freight, demurrage and

56    deadfreight]

(Italicised words added by the primary judge.)

40    The second recap was subject to, first, the shipper (Inland and Coastal Marina Systems, or ICMS) reconfirming what was to be carried no later than 24 hours after the fixing of the main terms (i.e., agreement on the terms of the second recap) and, secondly, the carrier approving the transport drawings and technical details (lines 57 to 58). Lines 57 to 62 provide:

57    -Sub shipper reconfirmation to be lifted max 24 hrs after fixing main terms

58    -Subject Carrier’s approval of transport drawings/technical details.

59    END

60    pls confirm

61    thanks sofar

62    Pierre GIRES

(Emphasis added.)

41    Soon after, on 7 November 2019, Mr Zuijderduin, who had been copied into the email exchange leading to the second recap, emailed Mr Gires with details of Spliethoff’s agents in Cork (who Helmgale then proposed as Celtic Shipping Agents) and Geelong (Asiaworld), noting that they had not yet been officially nominated. The email also attached a blank standard form “Worldwide Services” bill of lading. On its front side, the bill of lading had a box headed ‘Law & Jurisdiction’ which provided that the contract evidenced in the bill was governed by the laws of the Netherlands, “except as provided elsewhere herein”, and that the jurisdiction of the courts of Rotterdam would be exclusive for any suit by the merchant and non-exclusive for any suit brought by the carrier, and on its reverse side, in cl 10, there was the same wording dealing with law and jurisdiction. There was also a general clause paramount (cl 3(a)) in the bill of lading that relevantly provided as follows:

3. GENERAL PARAMOUNT CLAUSE

(a)    Except in case of US Trade, the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924, as enacted in the country of shipment, shall apply to this Bill of Lading. If no such enactment is in force in the country of shipment, the articles I-VIII inclusive of the said Convention shall apply. In trades where the International Brussels Convention 1924 as amended by the Protocols signed at Brussels on 23 February 1968 and 21 December 1979 (the Hague- Visby Rules) apply compulsorily, the provisions of the Hague-Visby Rules shall be considered incorporated in this Bill of Lading. The Carrier reserves all its rights under the Hague Rules or Hague-Visby Rules, including the period before loading and after discharging and while the Goods are in the charge of another Carrier, and to deck cargo and live animals. If the Hague Rules are applicable otherwise than by national law, in determining the liability of the Carrier, the liability shall in no event exceed £100 (GBP) sterling lawful money of the United Kingdom per package or unit.

(Emphasis added.)

The terms of the booking note

42    On 8 November 2019, Mr Zuijderduin sent Mr Gires an email attaching a blank two-page standard form “Worldwide Services” booking note (which appears to match the abbreviation in line 53 of the second recap “WWBN”) and asked him to fill in the details. A box that appeared immediately above the signature space on the front side of the booking note contained the following term (which the parties described as the override clause):

It is hereby agreed that this Contract shall be performed subject to the terms, conditions and exceptions contained on Page 1 and 2 hereof, including any addenda, which shall prevail over any previous arrangements and/or the terms, conditions and exceptions of any Bill of Lading or Sea Waybill issued hereunder.

(Emphasis added.)

43    The booking note contained the following relevant terms:

3. GENERAL PARAMOUNT CLAUSE

(a)     Except in case of US Trade, articles I-VIII inclusive of the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924, shall apply to this Booking-Note. … In determining the liability of the Carrier, the liability shall in no event exceed £100 (GBP) sterling lawful money of the United Kingdom per package or unit.

10. LAW AND JURISDICTION

This Booking-Note shall be governed by and construed in accordance with the laws of the Netherlands, except as provided elsewhere herein and except for US Trade, as to which the US COGSA 1936 shall apply, and any dispute, claim or action under this Booking-Note shall be decided by the Court of Rotterdam, the Netherlands, to the exclusive jurisdiction of which the Merchant submits himself. The Court of Rotterdam has non-exclusive jurisdiction in respect of any dispute, claim or action by the Carrier under this Booking-Note.

(Emphasis added.)

44    On 8 November 2019, Mr Gires filled in and returned the booking note. But, he did not strike through any of the provisions of the booking note in the box on its front page or cll 3(a) or 10 on its reverse that were inconsistent with, relevantly, lines 53 and 54 of the second recap providing “otherwise as per Carrier’s WWBN including rider clauses / BL including English Law and London arbitration”.

Did the primary judge consider Poralu’s case that the second recap was the contract of carriage?

45    The primary judge held that “because the [second] recap was not itself the contract and the booking note was, there is no possibility for the recap terms to take precedence over the booking note terms. Indeed, the recap terms have no contractual force at all”.

46    The primary judge’s approach to the first and second recaps was as follows:

81    Mr Gires’s first recap email on 7 November 2019 (see [38] above) opens by stating that what follows is what has been “fixed so far” and closes with a request to “pls confirm”. Neither side of the case contends that that email constituted the acceptance of any offer, or confirmation of the conclusion of a contract. At most it constituted an offer, to which there was then a counter-offer by Mr Oostrum requesting a correction (see [39] above). However, at least because the first email recap included the provision that the “intended rotation to be supplied prior firm fixture” and that “rider clauses”, which are additional to the standard clauses, can vary considerably and were unknown, the first email recap was not open to unequivocal acceptance which would then constitute a contract. It follows that the first email recap was not an offer; it was merely a recordal of terms agreed to that point, but with further terms still to be agreed. The request for a correction could therefore also not have been the acceptance of an offer, but merely a correction to the mutual record of terms agreed thus far.

82    Turning now to Mr Gires’s response to the request for a correction, being his second recap email on 7 November 2019 (see [40] above), there are several indications that stand in the way of a conclusion that it was a clear and unequivocal acceptance of the terms of the preceding offer, or that it corresponded with the offer.

(Emphasis added.)

47    Poralu’s contention that the primary judge erred in finding it had not advanced a case that the second recap email constituted the conclusion of the contract and failed to consider that case (issue 1) is without merit. The primary judge observed that neither party advanced a case that the first recap constituted the acceptance of an offer or the conclusion of the contract. But, as demonstrated by the paragraphs above, his Honour did consider, and rejected, Poralu’s case that the second recap was the contract.

48    Moreover, the primary judge identified four matters that, he found, stood in the way of concluding that the second recap constituted a clear and unequivocal acceptance of the terms of the preceding offer in the first recap. First, the primary judge interpreted the new abbreviation “asf”, which Mr Gires used for the first time in line 5 of the second recap, to mean “agreed so far”, which his Honour interpreted as contemplating matters were still to be agreed. Secondly, his Honour said that, although it may have been said that agreement could be reached on the basis that Spliethoff’s booking note and bill of lading terms were incorporated without them having been seen because they were standard pre-printed terms, the same could not be said of the request for any “rider clauses”, and so this left something yet to be agreed. Thirdly, his Honour found that, read objectively, the recap did not record a concluded or firm fixture because the intended rotation of the vessel was “to be supplied prior firm fixture”. Fourthly, the primary judge placed reliance on the emails ending with the request, “pls confirm’ and “thanks sofar”.

49    Accordingly, Poralu fails on issue 1.

Principles applicable to formation of a contract

50    The approach to the construction of words and documents used in the shipping industry is to consider how those words and documents would reasonably be “understood by those involved in the shipping business”: K Line Pte Ltd v Priminds Shipping (HK) Co Ltd (The Eternal Bliss) [2022] 1 Lloyd’s Rep 12 at 15 [17] per Males LJ delivering judgment on behalf of Sir Geoffrey Vos MR, Newey LJ and himself; see also Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2004] 1 AC 715 at 737 [10] per Lord Bingham of Cornhill and [57] per Lord Steyn; Total Transport Corporation v Arcadia Petroleum Ltd (The Eurus) [1998] 1 Lloyd’s Rep 351 at 358. This process is informed by the approach to contractual construction that Lord Wilberforce explained in the following oft cited passage in Reardon Smith Line Ltd v Hansen-Tangen; Hansen-Tangen v Sanko Steamship Co [1976] 1 WLR 989 at 995-996:

No contracts are made in a vacuum: there is always a setting in which they have to be placed. The nature of what is legitimate to have regard to is usually described as “the surrounding circumstances” but this phrase is imprecise: it can be illustrated but hardly defined. In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.

51    Dixon CJ, McTiernan and Kitto JJ explained the conventional understanding of contract formation in Masters v Cameron (1954) 91 CLR 353 at 360, saying:

Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.

In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. Of these two cases the first is the more common.

(Emphasis added.)

52    In addition, the parties may intend their agreement to be within what McLelland J identified in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628E-G (affirmed in GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 per McHugh JA at 634D-635C, Kirby P and Glass JA agreeing) as a fourth class additional to the three described in Masters 91 CLR at 360-362. McLelland J identified the fourth class as being one in which the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms.

53    English law continues to apply the same principles to determine whether a contract has been concluded, as Lord Clarke of Stone-cum-Ebony JSC said in giving the judgment of Lords Phillips of Worth Matravers PSC, Mance, Collins of Mapesbury, Kerr of Tonaghmore JJSC and himself in RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG (UK Production) [2010] 1 WLR 753 at 772-773 [47]-[49]. There, Lord Clarke JSC applied six principles (that are more expansively expressed than their exploration in Masters 91 CLR at 360) that Lloyd LJ, with whom O’Connor and Stocker LJJ agreed, synthesised in Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd’s Rep 601 at 619. Importantly, Lloyd LJ concluded, referring to what the trial judge there, Bingham J, had said:

… [T]he parties may intend to be bound forthwith even though there are further terms still to be agreed or some further formality to be fulfilled (see Love and Stewart v. Instone [(1917) 33 TLR 475] per Lord Loreburn at p. 476).

…

It is sometimes said that the parties must agree on the essential terms and that it is only matters of detail which can be left over. This may be misleading, since the word "essential" in that context is ambiguous. If by "essential" one means a term without which the contract cannot be enforced then the statement is true: the law cannot enforce an incomplete contract. If by "essential" one means a term which the parties have agreed to be essential for the formation of a binding contract, then the statement is tautologous. If by "essential" one means only a term which the Court regards as important as opposed to a term which the Court regards as less important or a matter of detail, the statement is untrue. It is for the parties to decide whether they wish to be bound and, if so, by what terms, whether important or unimportant. It is the parties who are, in the memorable phrase coined by the Judge, "the masters of their contractual fate". Of course the more important the term is the less likely it is that the parties will have left it for future decision. But there is no legal obstacle which stands in the way of the parties agreeing to be bound now while deferring important matters to be agreed later. It happens every day when parties enter into so-called "heads of agreement".

(Emphasis added.)

54    As Poralu submitted, the use of a traditional offer and acceptance analysis as to the formation of a contract is not a universal mode of analysis: JD Heydon, Heydon on Contract (Lawbook Co., 2019) at [2.100]. Contracts for the carriage of goods by sea are a category of contracts where a certain degree of artificiality will arise in attempting to discern their formation solely by reference to a traditional offer and acceptance analysis. Thus, Lord Wilberforce explained, in giving the opinion of himself and Lords Hodson and Salmon in New Zealand Shipping Co Ltd v AM Satterthwaite & Co Ltd (The Eurymedon) [1975] AC 154 at 167C-E, how the common law strives to achieve a legal outcome that reflects commercial reality, saying:

If the choice, and the antithesis, is between a gratuitous promise, and a promise for consideration, as it must be in the absence of a tertium quid, there can be little doubt which, in commercial reality, this is. The whole contract is of a commercial character, involving service on one side, rates of payment on the other, and qualifying stipulations as to both. The relations of all parties to each other are commercial relations entered into for business reasons of ultimate profit. To describe one set of promises, in this context, as gratuitous, or nudum pactum, seems paradoxical and is prima facie implausible. It is only the precise analysis of this complex of relations into the classical offer and acceptance, with identifiable consideration, that seems to present difficulty, but this same difficulty exists in many situations of daily life, e.g., sales at auction; supermarket purchases; boarding an omnibus; purchasing a train ticket; tenders for the supply of goods; offers of rewards; acceptance by post; warranties of authority by agents; manufacturers' guarantees; gratuitous bailments; bankers' commercial credits. These are all examples which show that English law, having committed itself to a rather technical and schematic doctrine of contract, in application takes a practical approach, often at the cost of forcing the facts to fit uneasily into the marked slots of offer, acceptance and consideration.

(Emphasis added.)

55    In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 193 [79], Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ endorsed Lord Bingham’s description in The Starsin [2004] 1 AC at 744-745 [34] of that technique of analysis of contractual formation as “a deft and commercially-inspired response to technical English rules of contract, particularly those governing privity and consideration”. It reflects his Lordship’s earlier emphasis on the parties being “the masters” of the process for “their contractual fate”: Pagnan [1987] 2 Lloyd’s Rep at 619.

56    Lord Justice Toulson, with whom Richards and Mummery LJJ agreed, described the typical formation of contracts in markets, such as shipping, where parties rely on standard form contracts, in Papas Olio JSC v Grains & Fourrages SA [2010] 2 Lloyd’s Rep 152 at 156-157 [28] as follows:

It is commonplace in commercial life, particularly in markets where the use of standard forms of contract is common, for parties to agree on all the essential terms necessary to bring about the conclusion of an oral contract and for the oral contract then to be followed by a written document, often described as a confirmation or recap, which will not only set out the essential terms but other terms common in the market. If there is no comeback from the other party, it may be easy to infer assent. The situation would be very different if there was no prior oral contract. Where the oral contract is followed by a written confirmation setting out fuller terms to which the other party is judged by the fact finder to have assented, it is of no practical importance whether the situation is analysed as the parties having entered into a partly oral and partly written contract. Probably the better analysis is that the written document fulfils a dual function: it both confirms evidentially the making of the oral agreement but also supersedes the oral agreement in that it provides a document to which the parties hereafter look as the expression of their bargain.

(Emphasis added.)

What was the contract of carriage?

57    In our opinion, the primary judge erred in rejecting Poralu’s argument that the second recap was the contract of carriage. That is because, in our opinion, the second recap concluded the contract of carriage. Mr Gires’ filling out and returning of the booking note form on 8 November 2019 can only be viewed as an attempt to proceed consistently with the first category of cases identified in Masters 91 CLR at 360 (and see too Lloyd LJ’s fourth principle in Pagnan [1987] 2 Lloyd’s Rep at 619; RTS Flexible [2010] 1 WLR at 773 [49]), being where “the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which would be fuller or more precise but not different in effect”. Despite the inaccuracies in how the agreement between the parties was recorded in the booking note, those inaccuracies did not evidence or result from any act or intention of the parties to change the terms already agreed in the second recap.

58    It is important to bear in mind that, as we have noted, although the first recap was the commencing part of the documentary evidence, it was, self-evidently, the product of detailed prior negotiations between Helmgale and Spliethoff. A recap, or recapitulation, in the shipping industry, is one party’s attempt to distil the essential agreed terms following negotiation that often uses terms or abbreviations that the individual negotiators know as familiar tools of their trade, for documents that they intend to use as part of the transaction that will be more fulsome, such as a standard form of one of the parties’ contracts, like a ship owner’s standard form bill of lading or booking note, or well-known forms of charterparty. Here, the parties chose not to tender in evidence what had passed between them earlier to arrive at the terms of the first recap. However, it is clear that, by the time of the exchanges in the emails in evidence on 7 November 2019, the parties had progressed well past tentative discussions and were then engaged in identifying where their negotiations were at so that they could proceed on the basis that Spliethoff would cause the intended cargo of pontoons to be carried from Cork to Geelong for Helmgale’s client.

59    With this in mind, looking as a whole at the correspondence that passed between Mr Gires and Mr Oostrum on 7 November 2019, it is clear that the first recap was an offer. Mr Oostrum’s response was to make a very limited counteroffer (“nearly correct … Please delete “vsl to arrive latest 31st January … Otherwise fine with me”) that was capable of acceptance. Mr Gires accepted that one change and returned the second recap, with its only alteration being Mr Oostrum’s amendment, so as to accept the counteroffer that had sought its inclusion.

60    Here, the parties intended to contract on the terms of the second recap within the first class that Dixon CJ, McTiernan and Kitto JJ described in Masters 91 CLR at 360. That is, they intended that the contract of carriage would provide for the matters that they had stipulated, using well-known shipping industry shorthand language, including that Spliethoff’s standard form bill of lading and booking note would restate those terms more fully or precisely, but to no different effect. And they necessarily intended that the wording in those two standard forms would be amended to conform, where they differed, to what the second recap provided. Hence, the parties’ use of the wording in lines 53 and 54 of the second recap, namely that their agreement would be “Otherwise as per carrier’s [booking note] including rider clauses” (emphasis added), and bill of lading but with the substantive amendments that the governing law would be “English law” and the parties would submit to “London arbitration”.

61    Spliethoff’s conduct, after it received the second recap, in sending Helmgale its standard form booking note, bill of lading and sea waybill was not a next step in what Lord Denning MR colourfully described as a “battle of forms” that results in a contract once the last form has been sent and received without objection: Butler Machine Tool Co Ltd v Ex-Cell-O Corp (England) Ltd [1979] 1 WLR 401 at 404H. Rather, that conduct was engaging in performance of the contract in the second recap.

62    It is commercially unrealistic to think, after Mr Gires and Mr Oostrum had agreed in the email containing the second recap, line 7 of which specified that Spliethoff was to “also provide your BN [booking note], riders and BL [bill of lading]” and in lines 53-54 provided that they were to proceed “Otherwise as per Carrier’s WWBN [worldwide booking note] including rider clauses / BL [bill of lading] including English Law and London Arbitration => to be provided” (emphasis added), that the parties without further discussion simply had abandoned their agreement and reverted to contracting on the very different standard form wording of the jurisdiction and arbitration clauses in Spliethoff’s booking note and bill of lading. There was no evidence that, after the second recap, any change of contractual intention had occurred or that somehow the parties had agreed or were now proceeding on a different basis by supplanting the earlier express agreement in the second recap, without any discussion at all. It is inherently unlikely that they had somehow decided that, instead, they would contract on a new basis using Spliethoff’s wording and had agreed to abandon using clauses that, first, ensured there would be “English law and London Arbitration” and, secondly, provided that a bill of lading, so claused, would issue and evidence the contract of carriage. Why else would the two businessmen have put into both the first and second recaps that Spliethoff would provide Mr Gires with its standard form of booking note and bill of lading, and any standard form riders, unless they were ad idem that the contract would otherwise be on those terms, but, as amended in the recaps, to include amendments to ensure that the contract of carriage and the bill of lading would include clauses providing for “English law and London Arbitration”?

63    The primary judge relied on four contra-indications to the second recap being a contract, but in our opinion these do not lead to that result.

64    The primary judge’s first contra-indication to the second recap being the contract of carriage was the use of the abbreviation “asf” in line 5, which he understood to mean “agreed so far”. No alternative meaning had apparently been suggested to the primary judge. In the first recap, at line 2, Mr Gires used the expression “confirm having fixed sfoar [scil: this was a typographical error for sofar]”. He also wrote in line 61 “Thanks sofar”, thus indicating Mr Gires’ use of “so far” as one word. This expression is consistent with there being matters yet to agree. It would seem unusual for Mr Gires to switch in line 2 in the second recap to the different abbreviation of “asf” and to remove the statement “confirm having fixed” if he intended to convey the same meaning of “agreed so far”, especially when he reiterated in line 61 “thanks sofar” (emphasis added). Moreover, in the second recap, Mr Gires made only one change to the substantive text of the first recap, namely to incorporate the single amendment that Mr Oostrum requested after writing “Nearly correct”. The change of Mr Gires’ language between the two introductory expressions in the first and second recap again points to agreement. In the first recap, he sought Mr Oostrum to “confirm having fixed [so far]”, whereas, in the second, he adopted the one change that Mr Oostrum required and described the result as “revised recap asf”. Thus, “asf” is likely to mean “as follows”. Restating or recapitulating the precise agreed terms, as Mr Gires did in the second recap, points directly to finality.

65    In any event, the fact that other, perhaps even important, matters may need later discussion and agreement does not necessarily negate the capacity of the second recap to be a concluded contract. Such a situation is the fourth class of contract recognised in GR Securities 40 NSWLR at 628E-G per McLelland J and 634D-635E per McHugh JA and by Lloyd LJ in Pagnan [1987] 2 Lloyd’s Rep at 619 citing Bingham J’s precept that the parties are “the masters of their own contractual fate”.

66    His Honour’s second contra-indication was, accepting that agreement could be reached on the basis that Spliethoff’s booking note and bill of lading terms were incorporated without them having been seen, that was not the case with respect to the rider clauses. Contrary to the primary judge’s conclusion, the rider clauses were not something that had yet to be agreed. Line 53 was to be read as an acceptance of Spliethoff’s standard form booking note, which was to include the rider clauses that had been agreed. Those riders included that the subsequent shipping documents, being the booking note and bill of lading, that the parties would need to use to carry out the carriage on the terms agreed in the second recap would be claused with English law as the proper law, provide for London arbitration and that the contract would enable the issue of a bill of lading so claused. There was no evidence that, leaving the terms of the standard form booking note and bill of lading to one side, the parties later negotiated any additional rider clauses. This suggests that the parties had no other rider clauses in mind and thus the wording in line 53 was not necessarily a contra-indication, as opposed to being, as we infer, definitive of the agreed wording. Critically, the second recap did not define the nature of the bill of lading to be prepared so that, as Spliethoff’s standard form wording provided, it would be issued in the form as a negotiable bill if the merchant so demanded. The possibility that there might have been any further rider clauses to Spliethoff’s standard form documents (of which there was no evidence at all) did not contradict the objective evidence of the parties’ intention to be bound forthwith on the terms of the second recap.

67    His Honour’s third contra-indication was that the second recap did not record a concluded or firm fixture because the intended rotation of the vessel was “to be supplied prior firm fixture”. However, the parties understood that, at that time, there was only an intended vessel, MV Dynamogracht, but had agreed that Spliethoff was yet to nominate the performing vessel and had to do so, if it were not to be MV Dynamogracht, by 15 November 2019. However, as was apparent from the terms of the second recap, the detail about the rotation was not an essential term. The parties had agreed the laycan, the maximum transit time, and the penalties for delay and detention. Indeed, as the primary judge found, line 39 of the second recap meant no more than that the carrier had to inform the merchant of the order of port calls that the performing vessel would make before she reached Cork. This was a requirement to provide information to the merchant when available so that it could make arrangements in anticipation of being ready for loading the cargo when the vessel arrived.

68    Further, there was nothing in the second recap that could be described as “comeback”. Mr Gires’ return of the second recap that he had amended to include Mr Oostrum’s correction was an acceptance of the provisions as amended of the first recap that Mr Oostrum said was “Otherwise fine with me”, and demonstrated that the parties were ad idem.

69    In circumstances where, objectively, the parties had reached and recorded their agreement, nothing turns on his Honour’s fourth contra-indication in the second recap, being Mr Gires’ sign off “pls confirm, thanks sofar” after the word “END”. That is because, by incorporating Mr Oostrum’s change and returning it to him, Mr Gires had accepted the counteroffer and made the contract. His request “pls confirm” was a courtesy or request, not a further counteroffer.

70    Consequently, the stage of the negotiations between him and Mr Oostrum when Mr Gires sent the second recap made it apparent that the parties had agreed all the necessary terms and conditions of a contract of carriage. Mr Gires’ request in lines 6 and 46 for agency details at both ports for the carriage sought information necessary to fill in boxes on the standard forms but was not a matter that required any agreement by Poralu other than, as the request indicated, that Spliethoff unilaterally could, and would, identify its agents.

71    As we have explained at [40] above, the second recap was subject to two conditions subsequent, namely, the shipper (ICMS) reconfirming what was to be carried no later than 24 hours after the fixing of the main terms and the carrier approving the transport drawings and technical details (lines 57 to 58). Those were conditions subsequent to performance under the second recap but did not affect its formation as a binding contract. There was no suggestion that ICMS failed to reconfirm. The primary judge found that after Mr Gires requested Spliethoff on 12 November 2019 to “lift” its entitlement to approve the transport drawings and technical details, Spliethoff did so by email on 13 November 2019. On 14 November 2019, Spliethoff formally notified the merchant that it had nominated MV Dijksgracht as the performing vessel, giving 5 December 2019 as her estimated time of arrival at Cork, all going well and weather permitting.

72    The acts of Spliethoff, on and before 14 November 2019, in sending Helmgale, as the merchant’s agent, details of its port agents, its standard form booking note and bill of lading, approving the technical details and transport drawings and nominating MV Dijksgracht had the character that the parties to the second recap were proceeding as if those were acts of performance under a contract as recorded in the second recap, rather than steps in an incomplete negotiation from which both parties were free to withdraw.

73    Importantly, at the time of the second recap, the identity of the intended consignee was not apparent or known to Spliethoff. On 7 November 2019, Mr Zuijderduin sent an email to Mr Gires that attached Spliethoff’s “Original Bill of Lading format” and its sea waybill format. Mr Zuijderduin made the suggestion that “if the consignee is known we suggest to issue Sea waybills as these are easier to issue” (emphasis added) and offered possibly greater efficiency. That does not detract from the underlying agreement of the parties that a bill of lading to evidence the contract of carriage was to be issued and claused so that English law was to govern the contract of carriage and that there would be London arbitration of disputes.

74    It follows that Poralu succeeds on issues 2 and 3.

DOES ART 10 OF THE HAGUE-VISBY RULES APPLY?

75    Article 10 of the Hague-Visby Rules provides:

The provisions of this Convention shall apply to every Bill of Lading relating to the carriage of goods between ports in two different States if:

(a)    the Bill of Lading is issued in a Contracting State; or

(b)    the carriage is from a port in a Contracting State; or

(c)    the contract contained in or evidenced by the Bill of Lading provides that the rules of this Convention or legislation of any State giving effect to them are to govern the contract

whatever may be the nationality of the ship, the carrier, the shipper, the consignee, or any other interested person.

(Emphasis added.)

76    The parties, leaving no stone unturned, debated whether Art 10(a) or (b) could apply to whatever the contract of carriage was. It is not necessary for us to engage in that debate because of our conclusion, which we explain below, that, under English law as the proper law, Spliethoff’s standard form bill of lading (that the parties agreed that the carrier was bound to issue and would evidence the contract of carriage), amended to include the English law and London arbitration riders, provided that the Hague-Visby Rules were to govern the contract and therefore Art 10(c) applied.

What is the place of issue of a bill of lading?

77    As the primary judge held, neither Art 10(a) nor 10(b) was applicable in the present circumstances. That was because Ireland, being the country of shipment, is not a Contracting State.

78    Moreover, Poralu’s challenge to the primary judge’s conclusion that the place of issue of a bill of lading is where the document is stamped and signed (issue 5) is without substance. As the primary judge correctly held:

154    The learned authors of Aikens express the view that “issued” refers to the place where signature or authentication of the carrier occurs: at [11.26]. I agree. The issue of a bill of lading is a unilateral, not a bilateral act. Thus, the place of issue of a bill of lading may be a different place to where the bill of lading is given to the shipper: see Treitel, Sir Guenter and Reynolds FMB, Carver on Bills of Lading (4th ed, Sweet & Maxwell, 2017) at [9-080]. Given that modern commerce is principally conducted by electronic communication in circumstances where the individuals concerned might, at any particular time, be just about anywhere, it would lead to intolerable uncertainty if the place of issue of a bill of lading depended on where a particular person was at any given time when they sent or received an email. In my view, the relevant document must be regarded as issued where it is stated in it to have been issued, and in the absence of such a statement then where it was in fact signed or authenticated.

    (Emphasis added.)

79    Shipping documents, such as bills of lading, ordinarily pass into the hands or, in the case of negotiable bills of lading, possession of third parties who will not have and cannot be expected to have any knowledge about where or how the document was issued other than as appears on its face. Those engaged in maritime commerce should be entitled to rely on what shipping documents, such as bills of lading and sea waybills, state on their face. Commercial documentation of transactions in international trade requires as much certainty as possible about the rights and obligations of the immediate parties and any third parties, such as assignees or holders of negotiable instruments.

80    Given our finding above, it is unnecessary to deal with Poralu’s challenge under issue 5 to the primary judge’s finding that “if no bill of lading is issued then Art 10(a) cannot be satisfied. To hold otherwise is too artificial a result”.

Can Art 10(c) apply when no bill of lading is in fact issued?

81    Relevantly here, based on our finding that the bill of lading was to be issued under the second recap and was governed by English law, the next question is whether, under English law, the Hague-Visby Rules applied to that bill of lading by force of Art 10(c). The primary judge did not need to decide this question because of his conclusion that Dutch law applied to the booking note contract that he found. However, his Honour helpfully, and with his typical incision, discussed the principles that apply where no bill of lading is in fact issued despite the parties’ agreement that one would issue evidencing the contract of carriage.

82    The primary judge explained:

150    There is nothing artificial in the principal reasoning of Pyrene v Scindia, The Happy Ranger EWCA and The Maersk Tangier that the wording “contract of carriage covered by a bill of lading” includes a contract of carriage where no bill of lading is in fact issued but in respect of which the issue of a bill of lading was contemplated, or in respect of which the shipper had a right to demand a bill of lading.

83    As his Honour observed, the reasoning of the English Courts in The Maersk Tangier [2018] 2 Lloyd’s Rep 59, Pyrene Co Ltd v Scindia Steam Navigation Co Ltd [1954] 2 QB 402 and Parsons Corporation v CV Scheepvaartonderneming (The Happy Ranger) [2002] 2 Lloyd’s Rep 357 was concerned with the chapeau to Art 10 and its interaction with Art 10(b). In particular, those cases considered whether the expression “contract of carriage covered by a bill of lading” includes a contract of carriage where no bill of lading is in fact issued but in respect of which the shipper had the right to demand one.

84    In our opinion, this reasoning is equally apposite to assist in the determination of whether Art 10(c) applies in the present circumstances, where, as we explain below, the second recap provided that a bill of lading would evidence the contract of carriage.

85    The Maersk Tangier [2018] 2 Lloyd’s Rep 59 concerned damage to frozen tuna shipped in three containers from Spain to Japan. Following a variation to the destination of two containers, no bill of lading was ever issued in respect of any of the three containers, but sea waybills were issued to avoid further delay in delivery. One of the issues at trial was whether liability was limited pursuant to Art 4(5) of either the Hague Rules or the Hague-Visby Rules, if either were applicable compulsorily or contractually. On appeal, it was argued that the primary judge had been wrong to conclude that the liability was limited by Art 4(5) of the Hague-Visby Rules and to hold that they had the force of law pursuant to s 1(2) of COGSA 71 because, so it was argued, the contract was not “covered by a bill of lading” within Art 1(b) of the Hague-Visby Rules and the requirements of s 1(4) could not be met in circumstances where sea waybills had been issued rather than bills of lading. Section 1(4) of COGSA 71 relevantly provided:

(4)    … nothing in this section shall be taken as applying anything in the Rules to any contract for the carriage of goods by sea, unless the contract expressly or by implication provides for the issue of a bill of lading or any similar document of title.

(Emphasis added.)

86    Flaux LJ, with whom Gloster LJ agreed, held (at 70-71 [48]-[49]):

[48]    In my judgment, where, as in the present case, the contract of carriage at its inception provides for the issue of a bill of lading on demand, the contract of carriage is ‘covered by a bill of lading’ within the meaning of art I(b) of the Hague-Visby Rules. Furthermore, since, as is common ground, the contract provided by implication for the issue of such a bill of lading on demand, the requirements of s 1(4) of the 1971 Act are clearly satisfied.

[49]    It is no answer that no bill of lading was ever in fact issued. Devlin J in Pyrene Co Ltd v Scindia Navigation Co Ltd [1954] 2 All ER 158, [1954] 2 QB 402, where, because the fire tender was damaged during loading and never carried on the ship, it was deleted from the bill of lading, rejected any suggestion that the Hague Rules would only be incorporated in the contract of carriage if a bill of lading was issued. He said ([1954] 2 All ER 158 at 164, [1954] 2 QB 402 at 419-420):

‘The next contention on behalf of the plaintiffs is that the rules are incorporated in the contract of carriage only if a bill of lading is issued. The basis for this is in the definition of art I(b) of “contract of carriage”. I have already quoted it, and it “applies only to contracts of carriage covered by a bill of lading”. The use of the word “covered” recognises the fact that the contract of carriage is always concluded before the bill of lading, which evidences its terms, is actually issued. When parties enter into a contract of carriage in the expectation that a bill of lading will be issued to cover it they enter into it on those terms which they know, or expect, the bill of lading to contain. Those terms must be in force from inception of the contract; if it were otherwise the bill of lading would not evidence the contract but would be a variation of it. Moreover, it would be absurd to suppose that the parties intend the terms of the contract to be changed when the bill of lading is issued, for the issue of the bill of lading does not necessarily mark any stage in the development of the contract; often it is not issued till after the ship has sailed, and if there is pressure of office work on the ship’s agent it may be delayed several days. In my judgment, whenever a contract of carriage is concluded and it is contemplated that a bill of lading will in due course be issued in respect of it, that contract is from its creation “covered” by a bill of lading and is, therefore, from its inception, a contract of carriage within the meaning of the rules and to which the rules apply. There is no English decision on this point: but I accept and follow without hesitation the reasoning of the Lord President, Lord Clyde in Harland & Wolff Ltd v Burns & Laird Lines Ltd (1931) 40 Ll L Rep 286, 1931 SC 722’.

(Emphasis added.)

87    There is no doubt that the England and Wales Court of Appeal’s reasoning in both cases was directed at the chapeau to Art 10. Thus, the chapeau must be read as applying the Hague-Visby Rules by force of the definition of contract of carriage in Art 1(b) to:

every contract of carriage covered by a bill of lading or any similar document of title … including any bill of lading … issued under or pursuant to a charterparty from the moment at which such bill of lading … regulates the relations between the carrier and a holder of the same.

88    Once it is accepted that, under English law, Art 10(b) will apply if the contract of carriage is covered by a bill of lading within the meaning of Art 1(b), even if no bill of lading is in fact issued, the same conclusion in respect of Art 10(c) is compelling. Indeed, Art 10(c), read with Art 3(3), and in light of Pyrene [1954] 2 QB 402 and the authorities applying what Devlin J held, which we have discussed above, expressly applies to the “contract [of carriage] contained in or evidenced by the bill of lading” referred to in the chapeau to Art 10.

89    In our opinion, the reasoning in The Maersk Tangier [2018] 2 Lloyd’s Rep 59 should be applied to the interaction of the chapeau in Art 10 with Art 10(c) equally as with Art 10(b). Indeed, such a reading would avoid anomalous results. The chapeau covers all of the following sub-rules and the balance of Art 10. Justice Devlin’s reasoning in Pyrene [1954] 2 QB 402 anticipated why Art 10(c) (which was later inserted by the Visby Protocol) would be engaged even where no bill of lading is, in fact, “issued” in the extract that Flaux LJ set out in The Maersk Tangier [2018] 2 Lloyd’s Rep 59 at 71 [49], namely:

Moreover, it would be absurd to suppose that the parties intend the terms of the contract to be changed when the bill of lading is issued, for the issue of the bill of lading does not necessarily mark any stage in the development of the contract; often it is not issued till after the ship has sailed, and if there is pressure of office work on the ship’s agent it may be delayed several days.

90    Indeed, as the primary judge correctly observed, the provision of a right to demand the issue of a bill of lading pursuant to Art 3(3) could have no operation if the Rules only could apply once a bill of lading had already been issued. This demonstrates the appropriateness of the purposive approach to the meaning of Art 10 that Flaux LJ endorsed in The Maersk Tangier [2018] 2 Lloyd’s Rep 59 at 74 [70] when he held:

In my judgment, the solution to any apparent conundrum is that these Articles should be given a purposive construction, so as to give effect to the clear intention that the Hague-Visby Rules apply compulsorily to the contract of carriage. Specifically, references in art X to ‘bill of lading’ should be read as ‘contract of carriage which is covered by a bill of lading or similar document of title’, giving effect to the case law on the meaning of ‘covered by a bill of lading’ in art I(b).

(Emphasis added.)

91    Whatever weight Flaux LJ gave to s 1(4) of COGSA 71, that provision merely reinforced Devlin J’s interpretation in Pyrene [1954] 2 QB 402, which predated the enactment of s 1(4), and the purposive approach to the construction of the Hague Rules (as predecessor of the Hague-Visby Rules) that Viscount Simonds adopted in Anglo-Saxon Petroleum Co Ltd v Adamastos Shipping Co [1959] AC 133 at 153-154.

92    It follows that if parties enter into a contract of carriage that expressly or by implication provides that a bill of lading will be issued, claused so as to conform with the requirements of Art 10(c) as evidencing the contract of carriage, then the Hague or Hague-Visby Rules will apply even if no bill of lading is ever issued.

Was the contract of carriage “covered by” a bill of lading?

93    Poralu challenged the primary judge’s findings that, first, it did not demand the issue of a bill of lading, and, secondly, the contract of carriage did not provide that a bill of lading would be issued. It is uncontroversial that Poralu ultimately agreed to accept a sea waybill as a matter of commercial convenience because or once the consignee was known. What remains controversial is whether that circumstance changes the underlying legal consequences as between Spliethoff and Poralu.

94    Lines 53 and 54 of the second recap stated: “BL including English law and London Arbitration => to be provided”. This signified that the carrier would “provide” (i.e., issue) a bill of lading to evidence the contract of carriage that had to include English law and London arbitration rider clauses.

95    Shortly after Mr Gires sent the second recap, Spliethoff informed him later on 7 November 2019 that it was preparing or providing a bill of lading, as it had agreed, to evidence the contract of carriage and attached the “‘Original Bill of Lading’ format but also our ‘sea way format’ if the consignee is known”. Spliethoff continued to refer to an obligation to issue a bill of lading subsequently, such as in its email to Helmgale on 13 December 2019 at 8:04 that attached “the draft BL’s”, albeit that the attachments were sea waybills. Helmgale and Spliethoff continued to discuss bills of lading by emails dated 18 and 20 December 2019, as did Transport Paris International (Poralu’s freight forwarder, which filled in a draft of the sea waybill with ICMS named as the shipper) and Poralu on 5 and 24 December 2019. On 27 December 2019 Mr Zuijderduin of Spliethoff enquired of Mr Gires whether “are we ready for releasing the BL’s” to which Mr Gires replied on 31 December 2019 “last version of B/L’s is ok for chrtrs”. Shortly after that email, Mr Zuijderduin informed its agent, Doyle in Cork, that “attached SWB [sea waybill] are all in order! Can you kindly sign/stamp attached versions and send the scanned copies to us?”.

96    On 6 January 2020, Mr Zuijderduin emailed Helmgale under the subject line “mv Dijkgracht-draft BL’s Cork” with attachments described as “Dijksgracht – BL.pdf”. The attachment was, in fact, a sea waybill signed and stamped on behalf of Spliethoff by Doyle in Cork.

97    This conduct reveals that the parties were proceeding on the basis of the contractual term in the second recap that a bill of lading would be “provided” (i.e., issued). Although, for commercial convenience, as Mr Zuijderduin explained in his email of 20:50 on 7 November 2019, once Poralu was known as the consignee, the sea waybill form was in fact used, the parties continued to conduct themselves on the basis that the carrier was contractually bound to issue a bill of lading to evidence the contract of carriage of the pontoons by sea and to provide for English law and London arbitration.

98    The second recap did not require Poralu to demand the issue of a bill of lading; rather, it stipulated that one would be “provided” by the carrier. As we have explained above, the fact that a bill of lading does not issue does not matter if the parties have agreed, as they did here, that one would issue to evidence the contract of carriage.

99    Accordingly, the carriage of the pontoons was “covered” by a bill of lading and Poralu succeeds on issue 4.

What were the terms of the bill of lading that the parties agreed would issue?

100    The inclusion of the statement at lines 53 and 54 of the second recap, “Otherwise as per Carrier’s WWNB including rider clauses/BL including English law and London Arbitration – to be provided”, would have been understood by a reasonable person in the trade of arranging sea cargo and charters to mean that, first, Spliethoff’s two standard forms, the booking note and bill of lading, would be provided to Helmgale to evidence the terms of the contract of carriage, secondly, those standard forms would be varied by the terms of the second recap to provide that the terms of the bill of lading to issue would supplant any inconsistent terms of the booking note, and thirdly, the proper law of the contract of carriage, as evidenced by the bill of lading, would be English law, and that disputes would be referred to arbitration in London.

Is it necessary to determine whether the contract of carriage is a charterparty?

101    On the assumption that his Honour’s earlier findings would not be set aside, Poralu challenged the primary judge’s findings that the contract of carriage was a charterparty (issue 8) and that any bill of lading issued under it would have served only as a receipt (part of issue 7). Those issues do not arise on our findings. However, the carrier argued at the hearing and in a supplementary note provided at the Full Court’s request after the conclusion of oral argument that, even if we found that the contract of carriage was the second recap (as we have), it was still necessary to determine whether the contract of carriage was a charterparty. This was because, the carrier argued, any bill of lading issued pursuant to the second recap would operate only as a receipt between Spliethoff and Poralu and, therefore, the second recap, as a charterparty, would govern the relationship between the parties.

102    This argument was misconceived. That is because, if the contract of carriage were to be characterised as a charterparty, there would be nothing inconsistent about it incorporating a convention-regulated cargo liability regime such as that in the Hague Rules or the Hague-Visby Rules. Those Rules do not apply to charterparties directly, but Art 5 requires that bills of lading “issued in the case of a ship under a charterparty … shall comply with the terms of this convention”. This is an illustration of what Viscount Simonds described in Adamastos Shipping [1959] AC at 154 as:

the notorious fact, to which both the learned judge and the editors of the 16th edition of Scrutton on Charterparties refer, that the parties to a charterparty often wish to incorporate the Hague Rules in their agreement: and by that I do not mean, nor do they mean, that they wish to incorporate the ipsissima verba of those rules. They wish to import into the contractual relation between owners and charterers the same standard of obligation, liability, right and immunity as under the rules subsists between carrier and shipper: in other words, they agree to impose upon the owners, in regard, for instance, to the seaworthiness of the chartered vessel, an obligation to use due diligence in place of the absolute obligation which would otherwise lie upon them.

(Emphasis added.)

103    As now noted in Scrutton on Charterparties and Bills of Lading (Sweet & Maxwell, 24th ed, 2021) at [14-014], the reference in Art 5 to “complying with the terms of the convention” appears to be to the form prescribed by Art 3(3). That is, on demand of the shipper, the “carrier” must issue a bill of lading under Art 3(3) showing marks, number of packages or pieces or quality or weight, and the apparent good order and condition of the goods. In addition, Art 3(7) provides that the shipper can demand the carrier to issue a “shipped” bill of lading.

104    Scrutton, at [14-014], now explains that, in the ordinary course, where a charterer uses the ship to ship his own goods, it may be doubtful whether he will be entitled to demand the issue of a bill of lading in accordance with Art 3(3). That is because, as between the charterer and the shipowner, the bill of lading is generally a mere receipt so that it is not a contract of carriage between them within the meaning of Art 1(b) and, therefore, the shipowner is not a carrier within the meaning of Art 3(3): see Mount Isa Mines Ltd v The Ship Thor Commander (2018) 263 FCR 181 at 203-204 [81]-[83] per Rares J.

105    Here, at the time of contracting, the parties intended that a bill of lading would be issued that had to include the English law and London arbitration rider clauses. Thus, the function of the bill of lading to be provided had to be to evidence the express terms in lines 53 and 54 of the second recap that, whatever the legal characterisation of the contract (be it a bill of lading within the scope of the Hague-Visby Rules, a charterparty or a sea waybill), the underlying contract of carriage had to be evidenced in the terms of Spliethoff’s standard form bill of lading that included the two rider clauses for English law and London arbitration. The legal consequence is that the parties intended that the bill of lading, even if issued to Poralu as charterer (if the underlying contract of carriage were a charterparty) was not to operate as a mere receipt, but would evidence the agreed terms of the contract of carriage and necessarily exclude any inconsistent terms in the booking note. For, as Lord Lindley said giving the advice of Lord Macnaghten, Sir Arthur Wilson, and himself in Turner v Haji Goolam Mahomed Azam [1904] AC 826 at 836:

notice by a shipper of a charterparty has not the effect of incorporating into the bill of lading any terms which are inconsistent with it and which the captain was not bound to embody in the bill of lading.

106    Lines 53 and 54 of the second recap distinguished between the rider clauses in the carrier’s booking note and the terms of “BL including English law and London arbitration” to be provided. The function of the bill of lading to be provided in accordance with the second recap necessarily had to evidence the contract of carriage. That is because the booking note did not need to contain the provisions for the governing English law and London arbitration that were, instead, to be included in the otherwise standard form bill of lading, which the parties necessarily contemplated would have to incorporate a convention-based liability regime under the Hague Rules or the Hague-Visby Rules or another of the international conventions.

107    The carrier’s mere receipt argument failed to address the consequence that, here, Poralu entered into a contract of carriage with the carrier, Spliethoff, under which the shipper was entitled to demand and be issued with a bill of lading. We have found that, first, the governing law of the contract of carriage is English, secondly, as explained below, a bill of lading would be issued that provided for the Hague-Visby Rules to apply to the contract of carriage and, thirdly, Art 10(c) applied the Rules because s 1(2) of COGSA 71 gives those Rules force of law compulsorily. Accordingly, s 1(2) of COGSA 71, by operation of Art 10(c), causes the Hague-Visby Rules to “have force of law” so that Art 3(8) renders “null and void and of no effect” any provision in the contract of carriage evidenced by the bill of lading that, if applied, would lessen the carrier’s liability otherwise than as provided in the Rules: The Hollandia [1983] 1 AC at 574F-G, 575C-E per Lord Diplock with whom Lords Keith of Kinkel, Roskill, Brandon of Oakbrook and Brightman agreed: see too Scrutton (24th ed) at [14-016].

Would the bill of lading regulate the relations between the carrier and a holder of it as also required by Art 1(b)?

108    For the reasons we have explained at [101] to [107] above, the bill of lading that the parties intended to be issued would have evidenced the contract of carriage in the second recap. It would also have operated, in the circumstances here, as a receipt for the cargo once loaded on board, and as a document of title upon discharge, in the event that the parties to the second recap agreed that it would be a straight bill. A straight bill is a bill of lading within the meaning of Art 1(b) of the Hague-Visby Rules and s 1(4) of COGSA 71: JI MacWilliam Company Inc v Mediterranean Shipping Company SA (The Rafaela S) [2005] 2 AC 423, see too [2004] QB 702 at 750 [135] per Rix LJ (whose reasons the House of Lords endorsed).

109    By incorporating the Hague-Visby Rules in this way, the bill of lading to be issued would evidence the contract that regulated the relations between Spliethoff and Poralu, particularly as concerned the obligations of due diligence in relation to seaworthiness, cargo-worthiness and the exemptions and limitations, including the limitation of liability in Art 4(5), from the time the goods were loaded on board the MV Dijksgracht until their discharge, as Viscount Simonds explained in Adamastos Shipping [1959] AC at 154.

Did cl 3(a) of the contract of carriage contractually incorporate the Hague-Visby Rules within the meaning of Art 10(c)?

110    The next questions arise under issues 6 and 7.

111    The contract of carriage provides that English law is to govern the contract and, as we have explained, s 1(2) of COGSA 71 provides that the Hague-Visby Rules apply by force of law. Of itself, an express English choice of law clause is not sufficient to apply the relevant Rules compulsorily (where, unlike here, they are not part of the contract of carriage); the terms of Art 10(c) must be met: Hellenic Steel Co v Svolamar Shipping Co Ltd (The Komninos S) [1991] 1 Lloyd’s Rep 370 at 376-377 per Bingham LJ, with whom Lloyd and Nourse LJJ agreed.

112    In the second recap, the parties sought to incorporate a cargo liability regime into the contract of carriage by providing for a bill of lading to be issued on Spliethoff’s standard form. The question is, which regime?

Did cl 3(a) of the booking note displace cl 3(a) of the bill of lading?

113    The carrier argued that the primary judge was correct to find that cl 3(a) in the booking note prevailed over and displaced cl 3(a) in Spliethoff’s standard form bill of lading. That was because, as the primary judge found, the latter was inconsistent with the booking note contract’s much more limited application of only Arts 1-8 of the Hague Rules to the contract of carriage.

114    In the context where we have found that the second recap was the contract of carriage, the carrier’s argument must be rejected. First, the second recap provided that a bill of lading would be issued in Spliethoff’s standard form but be claused to provide for English law to be the governing law and for London arbitration.

115    Secondly, while the “override clause” in the booking note provided that “this Contract” would prevail “over any previous arrangements and/or the terms, conditions and exceptions of any Bill of Lading or Sea Waybill issued hereunder” (emphasis added), that wording is not apt to accommodate the circumstances where there was a pre-existing contract such as that made in the second recap. The booking note was not the complete expression of that contract but was part of the contemplated machinery that the parties would use to implement, but not change, the contract of carriage comprising the second recap and evidenced in the bill of lading that it contemplated would be issued. In the context of the terms of the second recap, it is not accurate to describe any bill of lading or sea waybill as being “issued under” the booking note. That is because the second recap had already provided that the carrier would issue a bill of lading in Spliethoff’s standard terms to evidence the existing contract of carriage, claused to provide for English law as governing and London arbitration. Thus, the parties did not intend or contract that the booking note would or could modify or affect the terms of the bill of lading, including its provisions in cl 3(a) for selecting an international cargo regime to regulate their rights and liabilities. Rather, the booking note would only supply terms of the contract of carriage to the extent that they were consistent with it and the parties’ intention, reflected in the second recap, that the provision of a bill of lading claused to provide for English law and London arbitration would evidence the contract of carriage (and override any inconsistency in the wording of the booking note).

116    It is necessary to construe standard form commercial documents, including standard forms that the parties employ as part of their agreement, so as to avoid them making commercial nonsense or working commercial inconvenience: Zhu v Treasurer of New South Wales (2004) 218 CLR 530 at 559 [82] per Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ.

117    Thirdly, if the “override clause” in the booking note were part of the contract of carriage, the booking note would operate so that cl 10 (which provided that the booking note was to be “governed by and construed in accordance with the laws of the Netherlands”) would prevail over the parties’ express choice of English law and London arbitration and so produce an absurd result. Lord Reid said in L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 at 251 (in an approach to contractual construction mirrored in Zhu 218 CLR at 559 [82]):

The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear.

118    As Viscount Simonds said in Adamastos Shipping [1959] AC at 158, it is necessary to look at the documents as a whole in striving to give a sensible effect to commercial documents. If the terms of the box on the front page of the booking note were incorporated so as to override, by force of cl 10 on its reverse page, the express agreement for English law and London arbitration, there would be an absurd result that negated the object, which the second recap made express, that English law would govern the contract of carriage and there would be London arbitration of disputes under it.

119    Fourthly, because a bill of lading can be, and very often is, a negotiable instrument, a court will be cautious in implying a term into the contract of carriage that the bill of lading evidences based on another document, such as the booking note in this matter, to which the bill of lading makes no reference: TW Thomas & Co Ltd v Portsea Steamship Company Ltd [1912] AC 1 at 6 per Lord Loreburn LC and per Lord Atkinson, 8-9 per Lord Gorell and 11 per Lord Robson; Adamastos Shipping [1959] AC at 178-179 per Lord Keith of Avonholm. Of course, if the only parties to a contract expressed in the booking note were also parties to a straight bill of lading, such an implication may be open, depending on the terms of the contract that they made. But here, as we have found, the contract of carriage, evidenced by the bill of lading, was in the second recap. The bill of lading does not refer to the booking note or its terms.

120    Since the terms of the booking note were not intended to govern the operation of the second recap, the way in which the terms of the booking note are incorporated into the contract of carriage in the second recap has to respect the parties’ express intention that a bill of lading would issue on Spliethoff’s standard form with rider clausing for English law to govern and London arbitration. The inconsistency between the general clauses paramount in cl 3(a) of each of Spliethoff’s standard form bill of lading and booking note in their incorporation of, respectively, “the Hague Rules … as enacted in the country of shipment” and “articles I-VIII inclusive of the Hague Rules” must be resolved by giving precedence to the bill of lading’s terms so as to reflect the parties’ intention in the second recap that a bill of lading would issue in circumstances where, at that time, the shipper or the consignee was not known. As we have explained above, that lack of knowledge demonstrated that the parties to the second recap intended that the bill of lading, incorporating the agreed riders in lines 53 and 54 of the second recap, would evidence the contract of carriage.

121    In Gullischen v Stewart Brothers (1884) 13 QBD 317, Lord Coleridge CJ, Brett MR and Bowen LJ held that a cesser clause in a charterparty was not incorporated into a bill of lading issued under it to the charterers claused so that the goods would be deliverable to the charterers at the port of discharge “they paying freight, and all other terms and conditions as per charterparty”. Lord Coleridge CJ held (at 318) that “those words are incorporated which are consistent with the liabilities arising upon the bill of lading, and not those which are inconsistent”. Brett MR said of the charterers’ posited construction that the cesser clause under the charterparty relieved them of the liability to pay freight (at 318-319): “It would be absurd to suppose that their liability upon the bills of lading would cease upon the loading of the cargo”. In concurring, Bowen LJ said (at 319):

The bill of lading by its words incorporates the terms of the charterparty; but these words must receive a reasonable construction. The result is that the bill of lading incorporates certain provisions of the charterparty, but not the clause as to cesser of liability. The argument for the defendants would render the bill of lading a nullity: it would be a useless form except as an acknowledgment that the goods had been put on board. The bill of lading is a document regulating the rights and liabilities of the consignees; only those clauses of the charterparty which are consistent with its character as a bill of lading are incorporated in it.

(Emphasis added.)

122    In Federal Bulk Carriers Inc v C. Itoh & Co Ltd (The Federal Bulker) [1989] 1 Lloyd’s Rep 103 at 105-107, Bingham LJ, with whom Dillon and Butler-Sloss LJJ agreed in separate judgments, explained the principles of construction in the context of incorporating a term into a bill of lading, based on TW Thomas [1912] AC 1 and the line of authority following that decision. He said, albeit with particular reference to whether an arbitration clause is incorporated (but not limited to that subject):

Generally speaking, the English law of contract has taken a benevolent view of the use of general words to incorporate by reference standard terms to be found elsewhere. But in the present field a different, and stricter, rule has developed, especially where the incorporation of arbitration clauses is concerned. The reason no doubt is that a bill of lading is a negotiable commercial instrument and may come into the hands of a foreign party with no knowledge and no ready means of knowledge of the terms of the charter-party. The cases show that a strict test of incorporation having, for better or worse, been laid down, the Courts have in general defended this rule with some tenacity in the interests of commercial certainty. If commercial parties do not like the English rule, they can meet the difficulty by spelling out the arbitration provision in the bill of lading and not relying on general words to achieve incorporation.

(Emphasis added.)

123    Here, the second recap spelt out that the arbitration provision and choice of law clauses in the bill of lading were displaced and thus negated incorporation of the inconsistent clauses in both the standard form bill of lading and booking note. Accordingly, the general paramount clause (cl 3(a)) in the bill of lading applied to the contract of carriage and must be construed using English law principles.

Which regime is incorporated by cl 3(a) of Spliethoff’s standard form bill of lading?

124    In order for Art 10(c) to render the Hague-Visby Rule applicable to the carriage in issue, the contract “contained in or evidenced by the Bill of Lading” must provide that the Hague-Visby Rules, or the legislation of any State giving effect to them, are to govern the contract.

125    Spliethoff’s standard form bill of lading provided in the general paramount clause in cl 3(a) that the Hague Rules “as enacted in the country of shipment” applied to the bill.

126    Ireland, the country of shipment, was not a Contracting State. However, the primary judge found that Ireland “adhered” [scil: acceded] to the Hague Rules on 30 January 1962 and became a signatory to the Visby and SDR Protocols on 15 April 1998. Nevertheless, the Hague-Visby Rules are given the force of law in Ireland by s 31 of the MSA. In addition, s 30(2) of the MSA provided:

(2)    In this Part and Article X of the Rules, “Contracting State” means a state that is a party to any of the following –    

(a) the 1924 Convention,

(b) the 1968 Protocol,

(c) the 1979 Protocol,

127    A similar clause paramount to that in cl 3(a) of the bill of lading was considered in The Happy Ranger [2002] 2 Lloyd’s Rep 357. That clause provided:

3.     General Paramount Clause

The Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels 25 August 1924, as enacted in the country of shipment shall apply to this contract. When no such enactment is in force in the country of shipment, Articles I-VIII of the Hague Rules shall apply. In such case the liability of the Carrier shall be limited to £100 sterling per package.

Trades where Hague-Visby Rules apply

In trades where the International Brussels Convention 1924 as amended by the Protocol signed at Brussels on 23 February 1968–the Hague-Visby Rules–apply compulsorily, the provisions of the respective legislation shall be considered incorporated in this Bill of Lading …

(Emphasis added.)

128    That case concerned the carriage of reactors from Italy, which was a Contracting State to the Hague-Visby Rules, but it had not enacted the Hague Rules at the time of the trial. No bill of lading was issued, but the contract of carriage provided for the application of the shipowner’s regular form of bill.

129    Lord Justice Tuckey, with whom Aldous LJ agreed over the dissent of Rix LJ, held (at 360 [11]) that the first paragraph of the clause set out at [127] above did not apply because the Hague Rules were not enacted in Italy and the parties intended that in such a situation the second paragraph may apply. His Lordship said that the heading to the second paragraph must be read with the body of the paragraph, and that refers to “trades where the … Hague-Visby Rules apply compulsorily”. Observing further that the Hague-Visby Rules do not define or even refer to trades, Tuckey LJ was nevertheless “prepared to accept that they include voyages or carriages of cargoes within the scope of [Art 10]”, that is, to a contract of carriage covered by a bill of lading or similar document of title, within the meaning of Art 1(b): at 361 [19]. His Lordship reasoned that once a contract of carriage fell within Arts 1(b) and 10, then the Hague-Visby Rules applied compulsorily regardless of the wording of the second paragraph of the clause paramount (that referred to their compulsory application), which were surplusage, even though it reflected the parties’ intention. He said (at 362 [24]):

As it was put in one of the cases, "the bill of lading is the bedrock on which the mandatory code is founded". If a bill of lading is or is to be issued the contract is "covered" by it or "provides for its issue" within the definitions of art. I(b) and s. 1(4) of the 1971 Act.

(Emphasis added.)

130    Consequently, as the shipment was from a port in Italy, a signatory State, and it was “covered” by a bill of lading, Tuckey LJ held at 362 [24]-[25] that this was a trade in which the Hague-Visby Rules applied compulsorily to the contract of carriage.

131    Subsequently, the England and Wales Court of Appeal considered a similar, albeit slightly differently worded clause paramount in Yemgas FZCO v Superior Pescadores (The Superior Pescadores) [2016] 1 Lloyd’s Rep 561. The clause read:

The Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels 25 August 1924, as enacted in the country of shipment shall apply to this contract. When no such enactment is in force in the country of shipment, the corresponding legislation of the country of destination shall apply, but in respect of shipments to which such enactments are compulsorily applicable the terms of the said Convention shall apply.

(Emphasis added.)

132    The contract of carriage was subject to English law and jurisdiction. The country of shipment was Belgium, a Contracting State to the Hague-Visby Rules. Consequently, Art 10(b) applied, as a matter of English law through the operation of COGSA 71, to render the Hague-Visby Rules applicable. However, the cargo interests claimed that the carrier’s liability was governed instead by Art 4(5) of the Hague Rules because, in the circumstances of that case, those Rules provided a higher limitation of liability and Art 4(5)(g) of the Hague-Visby Rules allowed parties to agree a higher limit, by virtue of the clause paramount.

133    At first instance, Males J held that he was constrained by authority to hold that, on its true construction, the clause incorporated the Hague Rules, not the Hague-Visby Rules. On appeal, Longmore LJ, in describing that conclusion as “odd”, asked (at 564 [16]), “can it really be the case that a Paramount Clause in a contract made over 30 years later in 2008 is still to be taken as incorporating the 1924 Rules rather than the 1968 Rules?”. Focussing on the actual wording of the clause, Longmore LJ noted at 564 [17] that it “identifies the Hague Rules…but provides that it is those Rules ‘as enacted in the country of shipment’ which are to apply to the contract”.

134    Although there was no evidence as to the method by which Belgium had in fact enacted the Hague-Visby Rules, Males J had proceeded on the assumption that Belgian law was the same as English law, which of course gives the force of law to the Hague-Visby Rules, being the provisions of the Rules set out in the Schedule to COGSA 71 entitled “The Hague Rules as amended by the Brussels Protocol 1968”. Males J’s inclination had been to hold that the version of the Hague Rules which is enacted in the country of shipment (Italy) is the Hague-Visby Rules, with the consequence that those Rules apply not just as a result of the compulsory application of COGSA 71 but also as a matter of contract: Yemgas FZCO v Superior Pescadores [2014] 1 Lloyd’s Rep 660 at 666 [34]. However, his Lordship discarded that inclination on the basis of authorities, which he considered compelled him to a different view. Chief amongst them was Tuckey LJ’s observation as to the inapplicability of the first paragraph of the relevant clause in that case (see [127] above), in circumstances where the Hague Rules were not enacted in Italy, in The Happy Ranger [2002] 2 Lloyd’s Rep 357. Males J seems to have regarded this as an endorsement of what Tomlinson J had said at first instance: Parsons Corporation v CV Scheepvaartonderneming (The Happy Ranger) [2001] 2 Lloyd’s Rep 530 at 539 [31], namely:

I also reject the argument that the Hague-Visby Rules are to be regarded as the Hague Rules ‘as enacted’ in Italy so as to be incorporated by reason of the first limb of cl 3 of the specimen bill of lading. Quite apart from the important differences between the two codes, in the first two sub-clauses of cl 3 a clear distinction is drawn between the Hague and the Hague-Visby Rules and their enactment. Italy has repealed its enactment of the Hague Rules and has enacted the Hague-Visby Rules. That is not the situation to which the first sub-clause of cl 3 refers.

135    In The Superior Pescadores [2016] 1 Lloyd’s Rep 561, Longmore LJ doubted Males J’s characterisation of Tuckey LJ’s observation and, in any event, held at 567 [37] that “on any view of the matter, Tuckey LJ’s remarks were obiter”. Lord Justice Longmore continued (at 567-568 [37]-[38]):

… I consider that any case, in which a bill of lading is issued in 2008 incorporating the Hague Rules as enacted in the country of shipment and in which the country of shipment has (as here) enacted the Hague-Visby Rules, should be regarded as a case which is subject to the Hague-Visby Rules rather than the (old) Hague Rules.

I am confirmed in this view by the fact that it is the same view as that of the second circuit of the United States Court of Appeals in an appeal from the District Court of the Southern District of New-York where the Hague-Visby Rules have not been enacted. Nevertheless, in JCB Sales Ltd v Wallerius Lines (The Sejin) 124 F.3d 132 (1997) …a contract which stated that it was to be governed by “the Hague Rules contained in the international convention for the unification of certain rules relating to bills of lading … as enacted in the country of shipment” was held to be governed by the Hague-Visby Rules where the country of shipment (England) had enacted those Rules at any rate where that enactment described the new rules as being the “Hague Rules as amended by the Brussels 1968 Protocol”, see paras 27 to 34 of the judgment of the court delivered by Van Graafeiland CJ. That seems to me to be the good sense of the matter.

(Emphasis added.)

136    Indeed, in the decision to which Longmore LJ referred, Judge Van Graafeiland, delivering the reasons of the Second Circuit Court of Appeals in JCB Sales Ltd v Wallenius Lines 124 F 3d 132 (1997), said at 136:

The district court held that the language “‘as enacted in the country of shipment,’ incorporates the Hague Rules in the manner that England has enacted them: to wit, including the Visby Amendments and the 1979 Protocol.” 921 F.Supp. at 1171….

The district court recognized that the Visby Amendments are drafted in such a way as to supplement the Hague Rules rather than supplant them. Article 6 of the Visby Amendments, for example, reads:

As between the Parties to [the Visby Amendments] the [Hague Rules] and the [Visby Amendments] shall be read and interpreted together as one single instrument.

137    In our opinion, the approach of Longmore LJ in the Superior Pescadores [2016] 1 Lloyd’s Rep at 567-568 [37]-[38] to the construction of a clause paramount that incorporates “the Hague Rules as enacted in the country of shipment” in a bill of lading or contract of carriage by sea, first, represents the current state of the law of England, which is the governing law of the contract of carriage evidenced by the bill of lading, and, secondly, reflects commercial common sense. The use of the expression “as enacted in the country of shipment” would have little, if any, work to do if the parties to a bill of lading in which that expression is used simply intended to refer only to the Hague Rules and not to the enactment of a later version of those Rules such as the Hague-Visby Rules, which result from the Visby Protocol and, where applicable, the SDR Protocol.

138    The evident commercial reason for the use of the expression “as enacted in the country of shipment” is to recognise that different countries have enacted their international cargo regimes by choosing between the Hague Rules and later amendments, such as the Visby and SDR Protocols, and often make the enacted version apply by force of law to goods shipped on board at their ports. However, where, as here, a clause paramount uses the contractual expression “as enacted in the country of shipment” to incorporate such a cargo regime contractually to apply to a shipment because the local legislation does not impose it directly, commercial common sense requires the Court to construe that expression so as to align the rights and obligations of the parties with the version of the Hague Rules which the law of the country of shipment compulsorily applies: see The Federal Bulker [1989] 1 Lloyd’s Rep at 105 per Bingham LJ.

139    In the present case, the Hague Rules, as enacted in Ireland, the country of shipment, are the Hague-Visby Rules as amended by the SDR Protocol. The Third Schedule to the MSA referred to in s 31 is entitled “Articles I to X of the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading as amended by the 1968 and 1979 Protocols”. Thus, “on any ordinary and sensible view” (The Superior Pescadores [2016] 1 Lloyd’s Rep at 564 [18] per Longmore LJ), the Hague Rules “as enacted” in Ireland are the Hague Rules as enacted in the Third Schedule to the MSA.

140    Accordingly, the general paramount clause in the bill of lading for the carriage of Poralu’s cargo of pontoons was the Hague-Visby Rules as amended by the SDR Protocol.

What was the function of the sea waybill that the carrier issued?

141    The sea waybill that Spliethoff caused Doyles to issue contained the notation on the front page in the box “FREIGHT DETAILS, CHARGES ETC” that “As per Booking note of 8th of November 2019- Montpelier”. However, as we have explained above, Spliethoff caused the sea waybill to be issued as a matter of commercial convenience and, like the booking note, it could not, and did not, displace the terms of the bill of lading that the parties agreed in the second recap would be issued to evidence the contract of carriage. Accordingly, the inconsistent provisions of the sea waybill, such as the law and jurisdiction clause in the box at the top of the front page and cl 10 on the reverse, and the general clause paramount in cl 3(a) on the reverse side, which mirrored similar provisions in the booking note, were not part of or incorporated into the contract of carriage. Thus, the reference to the booking note on the front page of the sea waybill would have been understood by a reasonable person in the position of the parties (being ICMS as shipper, Poralu as consignee, and Spliethoff as shipper) as a reference to the contractual source of the use of the booking note that formed part (to the extent that its terms were consistent), of the contract of carriage, namely the second recap by which they were contractually bound: Gullischen 13 QBD at 319.

142    Since the sea waybill was issued merely for commercial convenience and the parties always intended that a bill of lading would be issued that would evidence the contract of carriage that regulated the rights and liabilities of the carrier and the consignee in accordance with English law, the sea waybill was a mere receipt and did not have contractual effect.

Article 10(c) applies

143    Here, as we have explained, cl 3(a) of the bill of lading provides for the Hague Rules as enacted in Ireland, which English law treats as the Hague-Visby Rules and the SDR Protocol as set out in the Third Schedule of the MSA, to govern the contract of carriage, the terms of which the bill evidenced, and so attracted the operation of Art 10(c). As a result, those Rules applied to the contract of carriage so that the minimum amount for which the carrier was liable would be calculated in accordance with the operation of the SDR Protocol unless, at the trial, Art 4(5)(e) is found to apply (namely, because the damage to the pontoons resulted from an act or omission of the carrier done with intent to cause damage or recklessly and with knowledge that damage would probably result): see Trafigura Beheer BV v Mediterranean Shipping Co SA (The MSC Amsterdam) [2007] 2 Lloyd’s Rep 622 at 626 [10] per Longmore LJ.

144    Consequently, Poralu succeeds on issues 6 and 7.

145    The position under Australian law, as the law of the forum, would be no different. However, because of our finding at [143] above, the Australian Rules do not apply by reason of Art 10(2), which provides:

Subject to paragraph 6, these Rules apply to the carriage of goods by sea from ports outside Australia to ports in Australia, unless one of the Conventions mentioned in paragraph 3 (or a modification of such a Convention by the law of a contracting State) applies, by agreement or by law, to the carriage, or otherwise has effect in relation to the carriage.

(Emphasis added.)

146    The Australian Rules list in Art 10(3) the Hague Rules, the Hague-Visby Rules, the Hague-Visby Rules as amended by the SDR Protocol, and the Hamburg Rules. Art 10(6) provides that the Australian Rules do not apply to the carriage of goods by sea under a charterparty unless a sea carriage document is issued for the carriage. Art 10(7) provides that the Rules apply to a sea carriage document issued under a charterparty only if the sea carriage document is negotiable and only while the document regulates the relationship between the holder of it and the carrier of the relevant goods.

147    Of course, here it is unnecessary to resolve the interesting question about the interaction between Arts 10(6) and (7) of the Australian Rules in the context of sea carriage documents issued under charterparties. Nor is it necessary to explore what appears to be the anomalous position that the avowedly cargo-friendly Australian Rules may provide cargo interests with rather less protection when goods are shipped pursuant to sea carriage documents issued under a charterparty than the protection offered under the Hague-Visby Rules. That is because of the requirement (in Art 1(1)(g)) that any such sea carriage document must be negotiable, thereby excluding the possibility of the Australian Rules applying to straight bills. This was an anomaly alluded to by Professor Charles Debattista in 2004 in “Straight bills of lading: a continuing saga in the English Courts: Questions Resolved, Untouched and Mooted by the Rafaela S” (paper delivered at International Congress of Maritime Arbitrators XV, London, April 2004); and see Sarah C Derrington, “JI MacWilliam Company Inc v Mediterranean Shipping Company SA ‘The Rafaela S’” (2005) 24(1) University of Queensland Law Journal 191.

DID SPLIETHOFF HAVE AUTHORITY TO ENTER INTO THE CONTRACT OF CARRIAGE AS REDERIJ DIJKSGRACHT’S AGENT?

148    Poralu contended that the primary judge was wrong to find that Spliethoff had actual authority to enter into the contract of carriage as agent for the shipowner, Rederij Dijksgracht, so that the latter could rely on the limitation in cl 3(a) of the booking note contract even though it was not a party to either it or the bill of lading. To this end, Rederij Dijksgracht relied on the Himalaya clause, which was cl 11 in the booking note and also in identical terms in cl 11 of the bill of lading.

149    Our conclusion that the second recap was the contract of carriage, rather than the booking note, does not change the analysis of whether Rederij Dijksgracht, as shipowner, can rely on cl 11 in Spliethoff’s standard form bill of lading, being the Himalaya clause. That is because the second recap incorporated so much of the terms of the standard form bill of lading that the parties agreed in the second recap that Spliethoff would issue as evidencing the contract of carriage as were not inconsistent with it.

150    Spliethoff and the various Rederijen, including Rederij Dijksgracht, contracted using a BIMCO POOLCON Standard Pooling Agreement as the basis of recurring pool arrangements between the Rederijen and Spliethoff. The relevant agreement, dated 1 January 2013, was between Rederij Dijksgracht as owners and Spliethoff as pool managers. The POOLCON referred to the “participating charter” as “GENTIME ‘94”, albeit that there was no such form. As the primary judge observed, the only GENTIME form was that published by BIMCO in 1999.

151    The primary judge found that, at the relevant time, a POOLCON and a GENTIME time charterparty were in place between Rederij Dijksgracht and Spliethoff that applied to the commercial operation and chartering of the MV Dijksgracht.

152    Poralu challenged this finding on the basis that Spliethoff did not prove that there was, in fact, a participating charter annexed to the POOLCON. Poralu did not, however, challenge the primary judge’s inference that the reference in the POOLCON to GENTIME ‘94 was intended to refer to the GENTIME form charter that Spliethoff maintained on its system.

153    The evidence established that:

    Spliethoff and the Rederij were part of the same corporate group.

    MV Dijkgsracht was the subject of a recurring POOLCON between the Rederij and Spliethoff on the basis of a BIMCO POOLCON maintained on Spliethoff’s computer system.

    Spliethoff was the time charterer of the ship and, at the time of the voyage, had been for the best part of a decade.

    The POOLCON terms, in particular cll 2(d), 6, 8(b), 8(e), and 9, were sufficient to authorise Spliethoff to enter into a contract with a Himalaya clause for the benefit of the Rederij. Whilst cl 2(d) excluded any agency of Spliethoff for the Rederij in general terms, cll 6, 8(b), 8(e), and 9 were given separate work to do in the context of conferring the benefit of a Himalaya clause. Those clauses relevantly provided:

2.     Pool Agreement

…

(d)    The Pool Managers shall under no circumstances be considered as if, and this Pool Agreement shall not be construed to the effect that the Pool Managers are the agents of the Participants, nor shall the Participants under any circumstances whatsoever be regarded as the Pool Managers’ principals. The Pool Managers shall act as time-chartered owners of Pool Vessels.

…

6.    Authority of the Pool Managers

The Pool Managers shall, in their own name, enter into various Transportation Contracts as deemed fit by the Pool Managers and otherwise as set out in Clause 8 (Pool Management).

8.    Pool Management

…

(b)    The Pool Managers may enter into any contracts required for the commercial operation, promotion and marketing of the Pool.

…

(e)    The Pool Managers shall, at all times and without discrimination between Participants, use all reasonable endeavours to protect and promote the interests of the Pool and shall conduct themselves in a way which ensures fulfilment of the aims of this Pool Agreement.

9.    Pool Managers’ Authority

The Pool Managers shall have authority to:

(a)    enter into, draw up and handle the performance of Transportation Contracts for periods not exceeding the number of months stated in Box 6 or, if left blank, six (6) months or the equivalent number of voyages provided such voyages are scheduled to be performed within the number of months stated in Box 7 or, if left blank, twelve (12) months;

154    Spliethoff’s computerised document system did not retain the form of GENTIME charterparty in use as at December 2018. However, the primary judge found that cl 18(e) of GENTIME had remained unchanged in the Spliethoff system, although surrounding clauses, irrelevant to the issue of Spliethoff’s capacity to contract for a Himalaya clause on behalf of the Rederijen, were amended from time to time. His Honour found that, at all relevant times, cl 18(e) provided:

18.    Responsibilities

…

(e)    Agency – The Owners authorise and empower the Charterers to act as the Owners’ agents solely to ensure that, as against third parties, the Owners will have the benefit of any immunities, exemptions or liberties regarding the cargo or its carriage.

155    In our view, the primary judge was correct to rely on the above evidence to conclude that the POOLCON gave Spliethoff the authority necessary to contract for Rederij Dijksgracht on the terms of the Himalaya clause contained in cl 11 of the booking note. We note that although we have found that the bill of lading evidenced the contract of carriage, cl 11 in it is identical to cl 11 in the booking note and, accordingly, both were part of the contract of carriage and enabled Spliethoff to contract to protect the interests of Rederij Dijksgracht so as to enable it to rely on “every exemption, limitation, condition and liberty contained [in the contract of carriage] (other than [Art 3(8)] of the Hague/Hague-Visby Rules) and every right, exemption from liability defence and immunity of whatsoever nature applicable to the Carrier”.

156    The primary judge was also correct to conclude that, at all relevant times, cl 18(e) of the GENTIME charter applied as between Rederij Dijksgracht and Spliethoff by reason of cl 9(a) of the POOLCON so as to authorise Spliethoff to enter into cl 11 on the Rederij’s behalf. To the extent that Poralu sought to argue the contrary, its submissions belied commercial reality and “the normal situation involving the employment of stevedores by carriers”, as Lord Wilberforce held giving the opinion of himself, Lords Diplock, Fraser of Tullybelton, Scarman and Roskill in Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd (1980) 144 CLR 300 at 304-305. It is inconceivable that Rederij Dijksgracht would have removed from the GENTIME form a clause designed to give it, as owners, the protections provided for by that clause.

157    Moreover, the evidence on which his Honour relied for these findings was more than “slight”: Godina v Patrick Operations Pty Ltd [1984] 1 Lloyd’s Rep 333 at 338 per Samuels JA.

158    Accordingly, Poralu cannot succeed on issue 10.

DISPOSITION

159    For these reasons, the appeal must be allowed in part. Given our findings that the Hague-Visby Rules, as enacted in Ireland as the country of shipment, apply and not the Hague Rules nor the Australian Rules, the amended notice of contention must be dismissed, as must the cross-appeal.

160    Poralu has succeeded on the determinative issues on the appeals, namely establishing that the liability of the carrier for the damage to the three pontoons is limited on the measure most favourable to Poralu, namely that in the Hague-Visby Rules as amended by SDR Protocol.

161    The separate questions, as amended, should be answered by varying the answers to questions 1(a) and (c) so that they reflect these reasons.

162    While each party had some success on the widely-ranging issues argued on the appeal, Poralu achieved an answer to question 1 favourable to it and ought to be entitled to costs of it on the appeal and at first instance, and the carrier achieved an answer favourable to it in respect of question 2, both on appeal and at first instance, and should be entitled to its costs of that issue. However, there may be some reason that any party wishes to advance to warrant a reduction to a costs order in another’s favour. We will order that, unless any party files and serves written submissions limited to three pages and any evidence on which it relies within 7 days of today, the carrier pay Poralu’s costs of the appeals and the separate issue in respect of question 1 and Poralu pay the carrier’s costs of the appeals and separate issue in respect of question 2.

Associate:

Dated:    8 September 2023

REASONS FOR JUDGMENT

FEUTRILL J:

Introduction

163    I have had the advantage of reading the joint reasons of Rares and SC Derrington JJ in draft. I agree that the appeal should be allowed, the amended notice of contention should be dismissed and that the cross-appeal should also be dismissed. I also agree that the separate questions, as amended, should be answered on the basis that liability of the carrier for damage to the pontoons is limited in the manner described in the Hague-Visby Rules as amended by the SDR Protocol.

164    The joint reasons set out the background to the appeal, the relevant facts including the contents of the recap emails, booking note, bill of lading and other documents, and a summary of the issues for determination in the appeal, amended notice of contention and cross-appeal. I gratefully adopt the recitation of all those matters. Except where indicated to the contrary, I also adopt all of the expressions or terms as defined or described in the joint reasons. Subject to the following, I also agree with the joint reasons.

165    The matter concerns a carriage of goods by sea from the port of Cork in the Republic of Ireland to the port of Geelong in the Commonwealth of Australia. Poralu, the shipper, contends that the goods (3 of 23 concrete pontoons) were damaged in transit and Rederij Dijksgracht (the evident ship owner) and (or) Spliethoff, as the contracting carrier, is (are) liable for that damage. The carrier(s) contend that, if they are liable, they are entitled to limit their liability under the terms of the contract of carriage. The parties are in dispute about whether liability of the ship, Spliethoff and the ship owner is limited, at all, and, otherwise, on what terms the carrier's liability is limited by agreement. The competing possibilities are set out in the separate questions. These turn on whether the contract limited liability to £100 per package or unit based on Art 4(5) of the Hague Rules (without the monetary unit, GBP, taken to be gold value in accordance with Art 9 of those rules), or to £100 per package or unit based on Art 4(5) of the Hague-Rules (with the monetary unit, GBP, taken to be gold value in accordance with Art 9 of those rules) or to 666.67 units of account per package or unit or 2 units of account per kilogramme of gross weight of the goods (whichever is higher) based on Art 4(5) of the Hague-Visby Rules.

166    The issues raised for the purpose of answering the separate questions before the primary judge and in the appeal were of some complexity. That complexity arises from the somewhat informal and somewhat incomplete manner in which the parties chose to record their agreement and inconsistencies between the documents recording that agreement. These circumstances, as is not infrequently the case in international commercial disputes, resulted in considerable dispute as to when and on what terms the parties agreed to contract. That, in turn, resulted in dispute as to the law governing the parties' contract, in what circumstances the Hague-Visby Rules may apply under that law and to expert evidence of Irish and Dutch law on application of the Hague-Visby Rules in those jurisdictions.

167    Stepping back from the morass of factual and legal issues that were the subject of submissions before the primary judge and this Court, at its core, the matter involves a relatively straightforward question of fact: What was the parties' contract of carriage and what were its terms? And, a more difficult, but relatively orthodox, question of law: What is the proper construction or meaning and effect of the general paramount clause of the carrier's standard form booking note and (or) bill of lading as incorporated into the terms of the contract? Separately, there is a question of fact as to whether Spliethoff had authority to enter into the contract as agent for Rederij Dijksgracht such that Rederij Dijksgracht is entitled to the benefit of the limitation of liability in the general paramount clause. The answers to these questions supply the key to the answers to the separate questions and the resolution of the issues in the appeal. As will be seen, in my view, the appeal can be resolved without having to descend the whole way into the quagmire of issues raised before the primary judge and in the appeal.

168    Poralu contends that the contract of carriage was recorded in the second recap email. The carrier contends that the contract was made by an offer to contract on terms set out in a completed version of the carrier's standard booking note that Poralu's agent sent to the carrier and that offer was accepted in an email from the carrier to Poralu's agent. If the contract were contained in the booking note, the general paramount clause would be the clause in the booking note, standard terms and Dutch law would apply to the contract of carriage as the primary judge concluded. If the contract were recorded in the second recap email, the general paramount clause in the bill of lading and the general paramount clause in the booking note would be incorporated into the contract, to the extent that those were not inconsistent with the second recap, and English law would be the governing law of the contract. The answer to the incorporation and interpretation of the general paramount clause and the proper law of the contract supplies the answer to the question of the terms upon which the carrier's liability is limited by the contract of carriage.

169    Adopting the same approach as in the joint reasons, I am of the view that the appeal must be allowed and the notice of contention and cross-appeal dismissed, for the following reasons (in summary).

(a)    The contract of carriage between Spliethoff and Poralu was recorded or evidenced by the exchanges of emails between the first and second recap emails.

(b)    The contract of carriage incorporated by reference those terms of the booking note form and the bill of lading form that were not inconsistent with the express terms of the contract of carriage recorded in the recap emails.

(c)    It was an express term of the contract of carriage that it be governed by English law and that disputes be referred to London arbitration.

(d)    On the proper construction of the standard terms of the booking note and bill of lading, as incorporated into the contract of carriage, the Merchant Shipping (Liability of Shipowners and Others) Act 1996 (IRE) (Irish Act) applied, by agreement, to the contract of carriage. The Irish Act met the description in cl 3(a) of the bill of lading standard terms of 'the Hague Rules contained in the [1924 Convention], as enacted in the country of shipment [Ireland]'. The Irish Act gave the Hague-Visby Rules force of law including Art 3(8). As cl 3(a) of the booking note standard terms was inconsistent with Art 3(8) of the Hague-Visby Rules, cl 3(a) of the booking note was not incorporated into the contract of carriage.

(e)    Any liability of Spliethoff was limited, by agreement, applying the Irish Act (Hague-Visby Rules) to 666.67 units of account per package or 2 units of account per kilogramme of gross weight of the goods (whichever is higher) subject to any determination in relation to breaking the limit under Art 4(5) of the Hague-Visby Rules.

(f)    On the proper construction of the standard terms of the booking note and bill of lading, as incorporated into the contract of carriage, cl 11 of the booking note (which is in the same terms in the bill of lading) was a term of the contract of carriage (Himalaya clause).

(g)    Rederij Dijksgracht (the evident ship owner) was entitled to rely on the limitation of liability contained in the Hague-Visby Rules by operation of the Himalaya clause.

170    As a consequence of these conclusions, it is not necessary to consider whether or not the contract of carriage between Poralu and Spliethoff is to be characterised as a 'charter-party' for the purposes of Art 10(6) of the Australian Rules or Art 5 of the Hague-Visby Rules. If the contract of carriage is not a charter-party, as the Hague-Visby Rules have force of law under the Irish Act, 'the Brussels Convention as amended [by both the Visby Protocol and SDR Protocol]' applies 'by agreement' or 'otherwise has effect in relation to the carriage' and, thereby, the Australian Rules have no application to the carriage of goods in this case.

171    It is also not necessary to consider whether or not the Hague-Visby Rules apply 'compulsorily' under English law (the proper law of the contract of carriage) by operation of COGSA 71. Irrespective of whether or not, under English law, the contract of carriage is considered to have been 'covered by a bill of lading' even though a bill of lading was not, in fact, issued for the purposes of Art 1(b) and irrespective of whether or not the Hague-Visby Rules apply by application of Art 10(c) of the Hague-Visby Rules, the Hague-Visby Rules apply, by agreement, through application of the Irish Act.

172    It follows that, however the contract of carriage may be characterised and whatever may be the position by operation of COGSA 71, the Hague-Visby Rules apply to the contract of carriage, by agreement, if not compulsorily.

Carriage of Goods by Sea Act 1991

173    By s 8 of COGSA 91, the Australian Rules have force of law in Australia. By s 11(2)(b) of COGSA 91, an agreement has no effect so far as it purports to preclude or limit the jurisdiction of an Australian court in respect of the carriage of goods from any place outside Australia to any place inside Australia. By s 11(3), arbitration agreements are also ineffective unless the place of arbitration is in Australia.

174    The Court is bound to apply and give effect to COGSA 91, in accordance with its terms, if and to the extent it applies to the contract of carriage in this case. Arts 1(b) and 1(g) of the Australian Rules extend the operation of the Australian Rules beyond a bill of lading to a 'sea carriage document' which includes, relevantly, a 'sea way bill'.

175    Art 10(2) of the Australian Rules provides that those rules 'apply to the carriage of goods by sea from ports outside Australia, unless one of [the Brussels Convention (Hague Rules), the Brussels Convention as amended by either the Visby Protocol or the SDR Protocol or both (Hague-Visby Rules), or the Hamburg Convention (Hamburg Rules)] (or a modification of such a Convention by the law of a contracting State) applies, by agreement or by law, to the carriage, or otherwise has effect in relation to the carriage.' However, Art 10(6) provides that the Australian Rules do not apply to carriage of goods by sea under a charter-party unless a sea carriage document is issued for the carriage. Art 10(7) provides that the rules apply to a sea carriage document issued under a charter-party only if the sea carriage document is a negotiable sea carriage document. Art 5 also provides that rules are not applicable to charter-parties, but if negotiable sea carriage documents are issued under a charter-party they are to comply with the terms of the rules. Art 1(b) extends the meaning of contract of carriage to 'a negotiable sea carriage document issued under a charterparty from the moment at which that document regulates the relations between its holder and the carrier concerned'. As can be seen from this summary of the provisions of the Australian Rules, the manner in which those rules apply to a carriage of goods by sea under a charter-party, if at all, is not straight forward.

176    In any event, in this case, as a sea way bill was issued the contract of carriage (whatever its terms) was 'covered by a sea carriage document' for the purposes of Art 1(b) of the Australian Rules. Further, the carriage of goods was from a port in Ireland to a port in Australia. Accordingly, unless one of the Conventions referred to in Art 10(2) applied to the carriage or the carriage was under a charter-party, the Australian Rules would apply to the carriage of the goods from Ireland to Australia. Therefore, the next question is whether one of those Conventions applied to the carriage 'by agreement or by law, or otherwise has effect in relation to the carriage'.

What was the contract of carriage?

177    The authors of Scrutton on Charterparties and Bills of Lading, 24th Ed, Sweet & Maxwell, 2020 describe a contract of affreightment (or contract for the carriage of goods by sea) at para [1-001] as follows (footnotes omitted):

WHEN a shipowner, or person having for the time being as against the shipowner the right to make such an agreement, agrees to carry goods by sea, or to furnish a ship for the purpose of so carrying goods, in return for a sum of money to be paid to him, such a contract is called a contract of affreightment (or a contract for the carriage of goods by sea) and the sum to be paid is usually called freight. Depending on the manner in which the ship is employed, the contract of affreightment may be contained in a charterparty or contained in, or evidenced by, a bill of lading. But the classical division into charterparties and bills of lading is not exhaustive. Contracts of affreightment may be contained in or evidenced by documents which do not fall into either category: e.g. freight contracts, mate's receipts, non-negotiable receipts, sea waybills, ship's delivery orders, and through transportation documents.

178    In this case it is common ground that Spliethoff and Poralu made a contract of affreightment (which I will refer to as the contract of carriage). The dispute centres on when and on what terms the contract of carriage was made. As the quoted passage from Scrutton reveals, at the point of formation of the contract and identification of its terms, the characterisation of the contract as a charter-party (or not) is not germane to the enquiry. Whether a charter-party (or not), the contract was a contract for the carriage of goods by sea from Cork to Geelong or a contract of affreightment.

179    The primary judge considered it settled, relying on Jasmin Solar Pty Ltd v Trina Solar Australia Pty Ltd [2015] FCA 1453; (2015) 331 ALR 108 at [106] (Edelman J) and Trina Solar (US) Inc v Jasmin Solar Pty Ltd [2017] FCAFC 6; (2017) 247 FCR 1 at [45]-[46] (Greenwood J), [128] (Beach J, Dowsett J agreeing), that the proper law to determine the question of whether a contract was concluded is the law of the forum. That statement of principle was unchallenged in the appeal. Accordingly, I proceed on the basis that it is correct.

180    As to the competing arguments about the formation and terms of the agreement, Poralu contended that there was an oral agreement evidenced or recorded in writing in the second recap email. Poralu had not clearly pleaded an oral contract or partly oral and partly written contract, but it appears that the proceedings before the primary judge were conducted on the basis that Poralu's case was that the second recap email confirmed the terms of a prior oral agreement or the agreement was partly written and partly oral and, for practical purposes, the characterisation of the agreement as oral and evidenced in writing or partly written and partly oral did not much matter. The primary judge evidently understood Poralu's case to be that the second recap email reflected the terms of a binding agreement concluded on the terms recorded in it, even though there was no direct evidence of any oral or written communications that preceded the first and second recap emails: J[38], [41].

181    Although it is orthodox to identify the point at which a binding contract is struck in terms of the communication of an offer to contract on certain terms and the communication of an acceptance of that offer, it has long been recognised that there are many instances in commercial and day-to-day life in which contracts are made without falling into a neat text book analysis of offer and acceptance. As Allsop J (Drummond and Mansfield JJ, agreeing) observed in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCAFC 1833; (2001) 117 FCR 424 at [369]:

… a number of authorities discuss the need not to constrict one's thinking in the formation of contract to mechanical notions of offer and acceptance. Contracts often, and perhaps generally do, arise in that way. They can also arise when business people speak and act and order their affairs in a way without necessarily stopping for the formalities of dotting i's and crossing t's or where they think they have done so. Here, the i's were not dotted and the t's were not crossed because of Mr Graham's conduct. Sometimes this failure occurs because, having discussed the commercial essentials and having put in place necessary structural matters, the parties go about their commercial business on the clear basis of some manifested mutual assent, without ensuring the exhaustive completeness of documentation. In such circumstances, even in the absence of clear offer and acceptance, and even without being able (as one can here) to identify precisely when a contract arose, if it can be stated with confidence that by a certain point the parties mutually assented to a sufficiently clear regime which must, in the circumstances, have been intended to be binding, the court will recognise the existence of a contract. Sometimes this is said to be a process of inference or implication. For my part, I would see it as the inferring of a real intention expressed through, or to be found in, a body of conduct, including, sometimes, communications, even if it be the case that the parties did not consciously advert to, or discuss, some aspect of the relationship and say: ''and we hereby agree to be bound'' in this or that respect. The essential question in such cases is whether the parties' conduct, including what was said and not said and including the evident commercial aims and expectations of the parties, reveals an understanding or agreement or, as sometimes expressed, a manifestation of mutual assent, which bespeaks an intention to be legally bound to the essential elements of a contract. The authority for the above can be found in, at least, the following: Meates v Attorney-General [1983] NZLR 308 at 377 per Cooke J (as his Lordship then was); Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd (1988) 5 BPR 11,110 at 11,117-11,118 per McHugh JA (Hope and Mahoney JJA concurring); Vroon BV v Foster's Brewing Group [1994] 2 VR 32 at 81-83 per Ormiston J (as his Honour then was); Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 555 per McHugh JA (with whom Samuels JA concurred); Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd's Rep 601 at 611 per Bingham J (as his Lordship then was) affirmed on appeal at 615; Pobjie Agencies v Vinidex Tubemakers [2000] NSWCA 105 at [22]-[24] per Mason P (with whom Meagher and Handley JJA concurred); Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61 at [74]-[80] per Heydon JA; though see Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 178 per Tadgell J (as his Honour then was); and in this context see also Electrical Enterprises Retail Pty Ltd v Rodgers (1988) 15 NSWLR 473 at 489 per Kearney J and Manzi v Smith (1975) 132 CLR 671 at 674.

182    In short, in commerce, contract formation can be messy. Contracts may be formed after numerous communications (oral and written) over days, weeks or months and between different people representing the contracting parties. However, at some point, agreement is reached on the principal terms of the contract. It is not uncommon, at that point, for the parties to then record the principal terms drawn from the toing and froing of the earlier negotiations in a document. These documents go by many names. Sometimes called 'heads of agreement', 'term sheet' or similar expressions. Sometimes, the document may have no nomenclature, but its terms express a summary of the items upon which the contracting parties have agreed.

183    At the point at which the contracting parties have reduced their 'agreement' to a summary of agreed items a further question may arise as to whether the 'agreement' as then expressed is an 'agreement to agree' or is intended to have an immediately binding effect. A binding contract on the principal terms agreed can be formed even if the parties agree to prepare and later sign a formal written agreement recording the agreement on the same terms: Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353 at 360-361. A binding contract can also be formed where 'the parties [are] content to be bound immediately and exclusively by the terms which they [have] agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms': Sinclair, Scott & Co v Naughton [1929] HCA 34; (1929) 43 CLR 310 at 317; Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628.

184    The existence and terms of an informal contract is determined objectively as a question of fact: Realestate.com.au Pty Ltd v Hardingham [2022] HCA 39; (2022) 406 ALR 678 at [15]-[17] (Kiefel CJ and Gageler J), [43]-[45] (Gordon J), [82]-[87] (Edelman and Steward JJ); Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd [2016] HCA 26; (2016) 260 CLR 1 at [27] (French CJ, Kiefel and Bell JJ), see, also, [54] (Gageler J, dissenting), [131] (Keane J), [196] (Nettle J), [245]-[246] (Gordon J, dissenting); Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; (2009) 261 ALR 382 at [90] (and the cases cited therein) (Campbell JA, Allsop P and Basten JA, agreeing). Consideration of surrounding circumstances and post-contractual conduct is permissible when the existence or terms of an informal contract are in issue: County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [20]. The consideration of evidence of these matters does not involve interpreting the terms the parties have agreed, but, rather the question of whether the parties have made an agreement and, if so, on what terms. There are no words to interpret; the question is what words were used to express the agreement or 'what did the parties agree?': County Securities at [7].

185    In this case, there was no direct evidence of any oral negotiations or conversations during which it was alleged that an oral contract was made. There was also no evidence of written communications preceding the first and second recap emails. The primary judge was of the view that a binding contract was not concluded at the point of exchange of the second recap email: J[81]-[88]. That conclusion appears to have been informed at least, in part, by the primary judge's focus on a search for evidence of offer and acceptance: J[79]-[80]. In any case, this Court is, in the circumstances of this case, in as good a position as the primary judge to consider and draw inferences from the evidence concerning the formation of the contract as the relevant facts are undisputed: e.g., Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531 at 551. Like Rares and SC Derrington JJ, and with due respect to his careful consideration of the evidence, I have come to a different conclusion to the primary judge.

186    In my view, a compelling inference arises from the text of the emails exchanged between the first and second recap emails, the objective surrounding circumstances in which those communications took place and the parties' subsequent conduct, that a binding agreement had been reached before the first recap email was sent and the principal terms of that agreement were recorded in the exchanges between the first and second recap emails. My reasons for arriving at that conclusion are as follows.

(1)    Although not definitive, the subject of the email exchange is 'recap Cork/Geelong'. I infer that 'recap' is shorthand for 'recapitulation'. That is, to sum up at the end of discourse what has been said. It is in the nature of a summary of what has been the subject of oral or earlier agreement.

(2)    The nature of the 'recap' as a summary of an agreement is confirmed by the opening sentence of the first recap email 'confirming having fixed [so far]='. While it is true that the use of the expression 'so far' implies that not everything had been agreed at that point, that is to be contrasted with the use of the word 'fixed' implying that what had been agreed to that point was permanent and not open to change.

(3)    All the key elements of a contract to carry the pontoons from Cork to Geelong were recorded as 'fixed' in the first recap email. The cargo and its dimensions and weight were identified. The port of loading [POL] and port of discharge [POD] were identified. A laycan was nominated. A freight rate was identified. Other terms and conditions were identified including a transit time of 50 days and penalties for late delivery, a detention rate per day, the party responsible for taxes, dues and duties, the carrier's world-wide booking note [WWBN] terms (including rider clauses) and carrier's bill of lading [BL] terms (including English law and London Arbitration).

(4)    The first recap email was sent by Poralu's agent to the carrier. The carrier's response was to request a deletion of the arrival date of the vessel 'because we agreed a max 50 days transit and then penalties apply'. That language implies an 'agreement'. It includes 'Otherwise fine with me', from which I infer that the first recap email otherwise accurately recorded that which the parties had, as then, 'fixed'.

(5)    Poralu's agent responded in the second recap email 'sorry for this omission, revised recap asf='. There followed a revised version of the first recap email that omitted the reference to the arrival date of the vessel, but that was otherwise in the same terms as the first recap email. The primary judge interpreted 'asf' to mean 'agreed so far'. Rares and SC Derrington JJ consider it to mean 'as follows'. I do not consider it necessary to decide between those possible meanings. It is ambiguous and I do not think that ambiguity can positively be resolved in favour of a conclusion that it means 'agreed so far'. In any case, the exchange of emails can be taken as confirmation that the second recap email between 'FOR ACNT TPI, FRANCE' and 'END' accurately recorded that which Poralu's agent had described in the first recap email as 'confirming having fixed [sofar]='. Put another way, the terms of carriage of the pontoons from Cork to Geelong recorded in the second recap email were 'fixed', as of no later than 7 November 2019.

(6)    The recap emails identify 'Terms and condition', none of those terms refers to the terms recorded in the recap emails being subject to further agreement or subject to a formal written contract. However, the terms and conditions include evident pre-conditions to performance of the contract. These are: 'Sub shippers reconfirmation to be lifted max 24 hrs after fixing main terms' and 'Subject Carrier's approval of transport drawings/technical details'.

(7)    In the carrier's email in response to the first recap email the writer said: 'Thanks fixture so far and awaiting subs tomorrow'. I infer the 'fixture' here means the booking of a vessel for the carriage of the pontoons. It is not clear what the expression 'awaiting subs tomorrow' means in the absence of any direct evidence of the prior negotiations. However, it may be a reference to 'Sub shipper reconfirmation' that was to be 'lifted max 24 hrs after fixing main terms'.

(8)    On 8 November 2019, the carrier provided Poralu's agent with an incomplete standard form bill of lading. That is also consistent with performance of an agreement made on 7 November 2019 that incorporated the terms of the carrier's standard bill of lading and Poralu's agent's request that the carrier provide a copy of the bill of lading when it sent the second recap email the previous day.

(9)    On 8 November 2019, the carrier provided Poralu's agent with an incomplete standard booking note form and requested 'can you kindly fill in all details etc?'. Providing an incomplete copy of the carrier's standard booking note is also consistent with performance of an agreement made on 7 November 2019 that incorporated the standard terms of the booking note and Poralu's agent's request that the carrier provide a copy of the booking note when it sent the second recap email on 7 November 2019. The request to fill in the detail is also consistent with an existing agreement as to the 'details' including the blank section of the form for inclusion of 'special terms'.

(10)    On 8 November 2019, Poralu's agent sent a completed version of the booking note to the carrier in accordance with the carrier's request that it fill in all details. The details completed reflected the items 'fixed' in the second recap email. However, the terms identified in the completed booking note made no reference to the term that the contract was subject to the carrier's approval of transport drawings and (or) technical details or to the term that there would be 'shippers reconfirmation' or the term that otherwise the terms were 'as per' the booking note and bill of lading, including English law and London arbitration.

(11)    On 12 November 2019, Poralu's agent sent an email to the carrier with drawings and requested 'for good order sake pls lift your sub on technical drawing'. On 13 November 2019, the carrier sent an email to Poralu's agent and said: 'Can herewith confirm that we can lift our sub technical drawing'. That exchange of emails is consistent with a binding agreement made on 7 November 2019 that had a term to the effect that performance was subject to the carrier's approval of transport drawings and (or) technical details.

(12)    Both the first and second recap emails referred to 'intended vsl mv Dynamogracht – final performing vsl to be nominated latest 15th November'. That is consistent with a binding agreement to carry the identified pontoons on a vessel to be nominated by the carrier on or before 15 November 2019. On 14 November 2019, the carrier formally nominated the Dijksgracht. In that email, the carrier indicated that the estimated date of arrival [Eta] of the vessel in Cork was 5 December 2019. The nomination of that vessel on that day is consistent with performance of an agreement reflected in the second recap email.

(13)    On 19 November 2019, the shipper's agent sent an email following up on the booking note and said: 'can you pls confirm attached bn is ok?'. On 20 November 2019, the carrier responded that the 'booking note is ok, we can however adjust the laycan if required'. Confirmation that the terms of the booking note were 'ok' came after the vessel had been nominated and the carrier had approved the lifting plan for the cargo. The other emails in evidence suggest that the Dijksgracht would arrive at Cork before 10 December 2019 (the laycan date referred to in the recap emails and completed booking note). The reference to adjustment implies that the laycan was already fixed, but could be altered by mutual agreement.

(14)    Although the booking note, as completed, made no reference to the issue of a bill of lading, the second recap email recorded as a term fixed that there would be a bill of lading (including English law and London arbitration). Before the exchange of correspondence related to the booking note, the carrier had provided Poralu's agent with a copy of its standard form bill of lading. After exchange of correspondence related to the booking note, by email of 11 December 2019 the carrier requested Poralu's agent to 'please send us the BL instructions'. The email also noted that the carrier could issue a sea waybill if the consignee was already known. Ultimately, a sea way bill and not a bill of lading was issued. However, the request for instructions to issue a bill of lading is subsequent conduct that is consistent with a binding agreement having been made on the terms recorded as fixed in the second recap email.

(15)    The omission from the completed booking note of the terms that the contract was subject to the carrier's approval of transport drawings and (or) technical details and that there would be 'shippers reconfirmation' is not inconsistent with a binding agreement. The absence of these terms can be explained on the basis that the 'booking' recorded in the booking note was expected to be unconditional. In the case of the term requiring 'shippers reconfirmation', its absence from the completed booking note is also consistent with that reconfirmation having been 'lifted within 24hrs after fixing main terms'.

(16)    The omission from the completed booking note of the term 'Otherwise as per Carriers WWBN including rider clauses/BL including English law and London Arbitration => to be provided', is consistent with performance of that term 'to be provided'. That is, the booking note, as completed, supplied the standard terms of the WWBN including rider clauses. A bill of lading was to be completed with all necessary details and standard terms, but with English law and London arbitration, and that bill of lading was 'to be provided'. Therefore, completion and provision of the carrier's standard form booking note was consistent with performance of a binding agreement on the terms recorded in the recap emails.

(17)    Otherwise, there is nothing in the communications between Poralu's agent and the carrier to suggest that negotiations for the contract of carriage continued after the second recap email. The email exchanges concerning the booking note do not indicate that Poralu's agent intended to make an 'offer' to contract on the terms contained in the completed booking note. There is nothing to suggest after Poralu's agent set out in the second recap email 'English law and London Arbitration' that there was an intention to resile from that term. Particularly, in circumstances in which the carrier had evidently accepted 'English law and London Arbitration' as 'fine'. Therefore, the carrier's communication on 20 November 2019 to the effect that the completed booking note was 'ok' does not indicate an 'acceptance' of an offer to contract on the terms contained in the completed booking note.

187    In my view, reasonable commercial business people would understand that a binding agreement was made around 7 November 2019 and the terms of that agreement were recorded or confirmed in the recap emails. A booking note was prepared, but not signed, and it did not, in fact, record all the terms fixed in the recap emails even though the carrier confirmed its contents was 'ok'. The terms of the booking note were not incorporated into the parties' agreement by signature and there was no evident intention that the booking note, as completed, was intended to replace or supplant the terms recorded as fixed in the recap emails.

What were the terms of the contract of carriage?

188    The second recap email records that the terms and conditions of the contract were 'Otherwise as per Carrier's [worldwide booking note] including rider clauses/[bill of lading] including English law and London Arbitration => to be provided'. As noted earlier, blank forms of the carrier's standard booking note and bill of lading were provided to Poralu's agent by email on 8 November 2019. The blank forms include standard terms. These standard terms are inconsistent with aspects of the terms recorded as fixed in the recap emails and, to the extent not inconsistent with the recap email terms, contain inconsistent general paramount clauses.

189    Each of the blank forms indicates that the booking note and bill of lading are to be governed by and construed in accordance with the laws of the Netherlands. They also provide that the Court of Rotterdam, Netherlands has exclusive jurisdiction with respect to disputes arising under the booking note and bill of lading. These standard terms are inconsistent with a term providing for English law and London arbitration. The blank booking note (and completed version of the booking note) also contain the so-called override clause.

190    I have little difficulty in concluding that reasonable commercial business people would understand that the 'standard' provisions of the booking note and bill of lading are incorporated as terms of the parties' agreement except to the extent that the standard terms are inconsistent with an expressly agreed term. That is tolerably clear from 'Otherwise' preceding 'as per' in the term recorded in the recap emails. Also, while there is a degree of ambiguity as to whether English law and London arbitration is to apply to both the booking note and bill of lading, it would be incongruous if the parties' agreement were 'as per' the standard terms of the booking note which provided for a different governing law and dispute resolution method to the bill of lading. A bill of lading, after all, would be issued after the contract of carriage was made and, typically, would record or evidence the terms of that contract: e.g., Pyrene Co Ltd v Scindia Steam Navigation Co Ltd [1954] 2 QB 402 at 419; [1954] 1 Lloyds Rep 321 at 329.

191    Aside from differences in the information to be recorded in the blank sections of the forms reflecting the different nature of a booking note and a bill of lading, the standard terms in each form are the same except for the general paramount clauses and that the booking note standard terms contain two clauses that are not included in the bill of lading. Neither of those clauses is relevant to this case. The clauses that are in the same terms include cl 11 of each of the standard terms (Himalaya clause). The booking note also contains the override clause.

What is the proper construction of the general paramount clauses?

192    Clause 3(a) of the booking note (general paramount clause) is as follows (separation, paragraph numbers and emphasis added):

(1)    Except in case of US Trade, articles I-VIII inclusive of the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924, shall apply to this Booking-Note.

(2)    The Carrier reserves all its rights under said Convention, including the period before loading and after discharging and while the Goods are in the charge of another Carrier, and to deck cargo and live animals.

(3)    In determining the liability of the Carrier, the liability shall in no event exceed £100 (GBP) sterling lawful money of the United Kingdom per package or unit.

193    Clause 3(a) of the bill of lading (general paramount clause) is as follows (separation, paragraph numbers and emphasis added):

(1)    Except in case of US Trade, the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924, as enacted in the country of shipment, shall apply to this Bill of Lading.

(2)    If no such enactment is in force in the country of shipment, then articles I-VIII inclusive of the said Convention shall apply.

(3)    In trades where the International Brussels Convention 1924 as amended by the Protocols signed at Brussels on 23 February 1968 and 21 December 1979 (the Hague-Visby Rules) apply compulsorily, the provisions of the Hague-Visby Rules shall be considered incorporated in this Bill of Lading.

(4)    The Carrier reserves all its rights under the Hague Rules or Hague-Visby Rules, including the period before loading and after discharging and while the Goods are in the charge of another Carrier, and to deck cargo and live animals.

(5)    If the Hague Rules are applicable otherwise than by national law, in determining the liability of the Carrier, the liability shall in no event exceed £100 (GBP) sterling lawful money of the United Kingdom per package or unit.

194    The evident intention of the parties derived from the contract recorded in the recap emails is that both general paramount clauses are intended to be incorporated into the contract of carriage. The interpretation of a contract is a question of law: Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724 at 736. Here, the proper law of the contract is English law. In point of detail, English law is a foreign law and should be proved as a question of fact like any other foreign law: see, e.g., Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331 at [115]; FAI General Insurance Co Ltd v Ocean Marine Mutual Protection and Indemnity Association (1997) 41 NSWLR 117 at 126. In the absence of evidence of English law, the Court is to assume that the English law approach to contractual interpretation is the same as Australian law: e.g., Neilson at [125] (Gummow and Hayne JJ), [249] (Callinan J), [267] (Heydon J).

195    In accordance with settled principles of contractual interpretation, the contract of carriage must be given an objective construction, by giving proper effect to the text, context, subject matter and purpose of its provisions: e.g. Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at 461-2 [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at 179 [40]; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 at [46]-[52]. The approach to be adopted in construing the contract is the 'objective approach' so that the 'meaning of the terms of a commercial contract is to be determined by what a reasonable business person would have understood those terms to mean': Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 at 656-7 [35]. Also, '[a] commercial contract is to be construed so as to avoid it making commercial nonsense or working commercial inconvenience': Electricity Generation Corporation at 657 [35].

196    Further, the contract has to be construed in context, considering its terms as a whole, giving consistent meaning to all of its terms, and avoiding any apparent inconsistency: Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109 (Gibbs J in dissent, but not on the applicable principle). Put another way, preference is to be given to a construction that gives 'a congruent operation to the various components of the whole': Wilkie v Gordian Runoff Ltd [2005] HCA 17; (2005) 221 CLR 522 at 529 [16]. Where a commercial transaction is implemented by several contracts or documents, all of the contracts or documents may be read together for the purpose of ascertaining their proper construction and legal effect, at least where the contracts or documents are executed contemporaneously or within a short period: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd (2010) 41 WAR 23 at 52-53 [104]. Words may be supplied, omitted or corrected in a written contract, as a matter of contractual interpretation, where it is clearly necessary in order to avoid absurdity or inconsistency: Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 426-7, 437.

197    Neither general paramount clause is able to be incorporated unamended as a term of the contract of carriage because the booking note clause refers to 'this Booking-Note' and the bill of lading clause refers to 'this Bill of Lading'. Therefore, in each case, the clause must be modified or read such that the clauses refer to 'this contract' (that is, the contract of carriage recorded in the recap emails) rather than 'this Booking-Note' or 'this Bill of Lading'. See, e.g., Adamastos Shipping Co Ltd v Anglos-Saxon Petroleum Co Ltd [1959] AC 133 at 154.

198    The override clause is a standard term of the booking note and it is incorporated into the contract of carriage to the extent it is not inconsistent with the express terms of that contract recorded in the recap emails. In that context, the reference to 'this Contract' in the override clause is to be read as a reference to the contract of carriage as recorded in the recap emails and it is that contract which prevails, not the terms of the booking note in themselves and unamended by the express terms of the parties' agreement. Therefore, it is the terms of the contract recorded in the recap emails that, in turn, incorporates so much of the standard terms of the booking note and bill of lading as are not inconsistent with the express terms of that agreement that prevail over prior arrangements and (or) the terms, conditions and exceptions of any bill of lading or sea waybill issued under that contract. Therefore, properly construed, the override clause is not a mechanism by which the general paramount clause in the booking note has precedence over the general paramount clause in the bill of lading.

199    There is, of course, an evident inconsistency in the terms of the general paramount clauses in that cl 3(a) of the booking note applies Arts 1 – 8 of the 1924 Convention in all circumstances, whereas cl 3(a) of the bill of lading only applies those Articles if there are no 'Hague Rules … as enacted in the country of shipment' or the 'Hague-Visby Rules' are not applied compulsorily under a national law. That apparent inconsistency must be resolved having regard to the context, subject matter and purpose of the provisions of the contract of carriage.

200    The primary judge appears to have accepted that the Hague-Visby Rules are given force of law in Ireland by the Irish Act: J[126]. However, the primary judge found that Ireland is not a 'contracting State' within the meaning of that expression in Art 10(a) and 10(b) of the Hague-Visby Rules: J[140]. Neither of those findings of fact was challenged in the appeal. Further, the primary judge was of the view that, on the proper construction of the general paramount clause in cl 3(a) of the bill of lading, the first sentence of that clause was inoperative because the Irish Act enacted the Hague-Visby Rules and not the Hague Rules: J[162]-[172].

201    It is fair to say that the text of cl 3(a) of the bill of lading is no model of clarity. There are certainly footholds in the text of the clause that support the primary judge's construction. However, there are also indications in the text that point in the opposite direction and these are, in my view, more consistent with commercial sense and the context, subject matter and purpose of the contract of carriage, made in 2019, to transport goods from a port in Ireland to a port in Australia.

202    In the following explanation of the construction of cl 3(a) of the bill of lading, to avoid confusion of terminology, I will refer to the Hague Rules, Visby Protocol, SDR Protocol and Hague-Visby Rules (as described in the reasons of Rares and SC Derrington JJ) as the 1924 Convention (Hague Rules), 1968 Protocol (Visby Protocol), 1979 Protocol (SDR Protocol) and the 1924 Convention, as amended by the 1968 Protocol and 1979 Protocol or the 1924 Convention, as amended (Hague-Visby Rules). I will refer to the 'Hague Rules' and 'Hague-Visby Rules' as those expressions are described in cl 3(a) of the bill of lading.

203    The strongest indication in favour of the primary judge's construction is, as he noted, that the clause uses 'Hague Rules' and 'Hague-Visby Rules' separately and deliberately within the same clause. Implicitly, when the clause refers to the 'Hague Rules' it means the 'Articles of the 1924 Convention' and when the clause refers to the 'Hague-Visby Rules' it means the 'Articles of 1924 Convention, as amended by the 1968 Protocol and 1979 Protocol'. However, whenever a 'label' or 'definition' is attached to an expression or descriptive phrase in a contract or other instrument it can distract attention away from the true meaning of the expression or phrase. In this respect, it is important to keep in mind that the label 'Hague Rules' is attached to the expression 'Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924'. The label 'Hague-Visby Rules' is attached to the expression 'International Brussels Convention 1924 as amended by the Protocols signed at Brussels on 23 February 1968 and 21 December 1979 (the Hague-Visby Rules)'.

204    In the first sentence of cl 3(a) the subject matter is conveyed in a compendious phrase by reference to the rules 'contained in' the 1924 Convention 'as enacted in the country of shipment'. In the third sentence the subject matter is conveyed in a compendious phrase by reference to 'trades' where the 1924 Convention, as amended by the Protocols, 'apply compulsorily'. The subject matter of the first sentence is 'rules' 'as enacted'. The subject matter of the third sentence is 'specific rules' that 'apply compulsorily'.

205    The text of the 1924 Convention was amended by the 1968 Protocol. Art 6 of that Protocol provided that 'As between the Parties to this Protocol the Convention and the Protocol shall be read and interpreted together as one single instrument.' The text was further amended by the 1979 Protocol. Art 1 of that Protocol provided that 'For the purpose of this Protocol, "Convention" means the International Convention for the unification of certain rules of law relating to bills of lading and its Protocol of signature, done at Brussels on 25th August 1924, as amended by the Protocol, done at Brussels on 23rd February 1968'. Therefore, in substance, there is one Convention. It was the Convention done at Brussels on 25 August 1924. That Convention was amended by the 1968 Protocol and 1979 Protocol. However, the Convention remained the International Convention for the unification of certain rules of law relating to bills of lading. Therefore, the ordinary meaning of the expression 'rules contained in the 1924 Convention' is capable, in the context of a contract involving the international carriage of goods by sea, of meaning 'rules contained in the 1924 Convention, [as amended from time to time] '.

206    Although an evident aim of the 1924 Convention and 1968 and 1979 Protocols was and is to bring about uniformity of the rules that apply to the international carriage of goods by sea and, to an extent, that aim has been achieved, there is significant variation in the national laws that apply rules to such carriage. There are States that are contracting States for the purposes of the 1924 Convention, but are not so for that Convention as amended by the 1968 Protocol or 1979 Protocol. There are States that are signatories to or that have acceded to the 1924 Convention that have not ratified it or have denounced it. There are States that have acceded to one or more of the Protocols, but have not ratified them. There are States that have done none of sign, accede or ratify the 1924 Convention or the amending Protocols, but have enacted legislation that gives effect to the 1924 Convention or that Convention, as amended by one or both of the Protocols. There are States which have enacted idiosyncratic legislation that gives effect to the 1924 Convention, as amended, but with modifications. COGSA 1991 is an example of such legislation.

207    In that context, the expression 'Hague Rules contained in the [1924 Convention], as enacted in the country of shipment' is capable of bearing a meaning that reflects that the 'Hague Rules … as enacted' may or may not apply the 1924 Convention as amended by the 1968 Protocol or 1979 Protocol. Also, an enactment of the country of shipment may not apply the rules contained in 1924 Convention, as amended, 'compulsorily' where the law of that jurisdiction applies the rules contained in 1924 Convention (unamended) or the law of that jurisdiction does not govern the contract of carriage. On the other hand, where certain national laws apply, the rules contained in the 1924 Convention, as amended, may apply 'compulsorily' if one of the criteria in Art 10 of the 1924 Convention, as amended, is satisfied. Therefore, while cl 3(a) appears to draw a distinction between the 1924 Convention (unamended) and the 1924 Convention, as amended, where that distinction is drawn the clause is addressing different subject matters. The first subject matter is addressed to enactments of the country of shipment which may vary in the manner in which the 1924 Convention (unamended or as amended) is enacted. The second subject matter is addressed specifically to the compulsory application of the 1924 Convention, as amended. Accordingly, the references to the 'Hague Rules' (1924 Convention) and 'Hague-Visby Rules' (1924 Convention, as amended) within the same clause does not necessarily imply that when addressed to enactments of the country of shipment it is intended to be a narrow reference to the rules contained in 1924 Convention (unamended).

208    There is also a third subject matter addressed in cl 3(a) where there is no enactment in the country of shipment and no compulsory application of the 1924 Convention, as amended. In that case, the second and last sentences of the clause indicate that the reference to the 'said Convention' is a reference to the rules contained in 1924 Convention (unamended). That is evident from the reference in the second sentence to Arts 1-8 of the 'said Convention' read with the reference in the last sentence to the 'Hague Rules' and limiting liability to £100 (GBP) sterling lawful money of the United Kingdom per package or unit. Art 4(5) of 1924 Convention (unamended) limits the liability of the carrier and the ship to '100 pounds sterling per package or unit'. Art 9 of the 1924 Convention (unamended) provides that the monetary units are taken to be gold value. Consequently, the last sentence of the clause is a reference to the circumstances in which only Arts 1-8 of the 1924 Convention (unamended) apply by agreement. Namely, where there is no enactment of the rules contained in the 1924 Convention (as amended or unamended) in the country of shipment and no compulsory application of the 1924 Convention, as amended.

209    These matters taken collectively lead me to conclude that, while cl 3(a) of the bill of lading separates the rules contained in the 1924 Convention (unamended) from the rules contained in the 1924 Convention, as amended by the 1968 and 1979 Protocols (Hague-Visby Rules), it does not follow that an enactment in the country of shipment which applies the rules contained in the 1924 Convention in an amended or modified form (whether as amended by the Protocols or modified in some other way) does not meet the description of 'Hague Rules contained in the [1924 Convention], as enacted' (emphasis added). Moreover, I would not readily conclude that the objective intention of commercial parties in 2019 was to confine the first sentence of the clause to enactments of the specific rules contained in the 1924 Convention (unamended). That appears to be quite an unlikely intention when, as of 2019, the 1924 Convention had been amended in 1968 and 1979 and many States had enacted legislation giving effect to the 1924 Convention, as amended, whether or not those States were also to be regarded as 'contracting States' for the purposes of Arts 10(a) and 10(b) of 1924 Convention, as amended.

210    The context, subject matter and purpose of the contract of carriage includes that it is a contract for the carriage of goods by sea from a port in Ireland to a port in Australia. Further, that English law is the law that the parties have chosen to govern that contract. The objective context, therefore, must include enactments of Ireland dealing with the subject matter of the 1924 Convention and COGSA 71 as part of English law by which the rules contained in the 1924 Convention, as amended, may apply compulsorily where one of the limbs of Art 10 of those rules is satisfied. That is, although cl 3(a) of the bill of lading is a standard term it is not to be construed in the abstract, but in the context of the terms of the contract of carriage and the objective purpose of that contract.

211    In context, the first sentence of cl 3(a) of the bill of lading is to be read as: 'the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels, 25th August 1924, as enacted in [Ireland], shall apply to this [contract]'. The Irish Act was an enactment of the country of shipment. The Irish Act gave the 1924 Convention, as amended by the 1968 and 1979 Protocols, the force of law. The Irish Act was the only enactment of the country of shipment that could possibly meet the description of 'Hague Rules contained in the [1924 Convention] as enacted in [Ireland]'. Therefore, in context, reasonable business people would understand the first sentence of cl 3(a) of the bill of lading to mean that the Irish Act applies to the contract. Thereby, the provisions of the Irish Act, with all necessary amendments, apply to the contract of carriage, by agreement. As the Irish Act gave the Hague-Visby Rules force of law, the Hague-Visby Rules apply to the contract of carriage by agreement.

212    The rules contained in the 1924 Convention, as amended by the 1968 and 1979 Protocols, could apply compulsorily if those rules apply as a matter of English law (as the proper law of the contract) or, perhaps, as matter of Irish or Australian law if a mandatory law of one of those jurisdictions were to apply the Hague-Visby Rules. In those circumstances, the rules contained in the 1924 Convention, as amended, would be incorporated into the contract of carriage, with all necessary amendments, as terms of the contract. That is, the Hague-Visby Rules would apply by agreement even if separately those rules apply by law. In that case, the Hague-Visby Rules would displace the Irish Act both as a matter of contract and application of a mandatory national law.

213    For completeness, I should indicate that I have not overlooked Poralu's submissions to the primary judge, repeated in the appeal, to the effect that the first sentence of cl 3(a) should be construed as I have interpreted it in reliance on English Court of Appeal reasons in Yemgas FZCO and Others v Superior Pescadores SA (The Superior Pescadores) [2016] EWCA Civ 101; [2016] 1 Lloyd's Rep 561. Unlike cl 3(a) of the bill of lading, the paramount clause under consideration in that case referred only to the Hague Rules and there was no reference within that clause to the Hague-Visby Rules. Lord Justice Longmore (Tomlinson and McCombe LJJ agreeing) expressed the view (at [37]) that 'any case, in which a bill of lading issued in 2008 incorporating the Hague Rules as enacted in the country of shipment has (as here) enacted the Hague-Visby Rules, should be regarded as a case which is subject to the Hague-Visby Rules rather than the (old) Hague Rules'.

214    In The Superior Pescadores reference was made to a number of other authorities which had considered the operation of paramount clauses. These included consideration of the decision of Tomlinson LJ (at first instance) in Parsons Corporation and Others v CV Scheepvaatonderneming Happy Ranger and Others [2001] 2 Lloyd's Rep 530 (Happy Ranger QBD). In that case, Tomlinson LJ considered a paramount clause in similar terms to cl 3(a) of the bill of lading. Tomlinson LJ (at [31]) rejected a submission made in that case to the effect that the Hague-Visby Rules were to be regarded as the Hague Rules as enacted in Italy (the country of shipment in that case) because a 'clear distinction is drawn between the Hague and Hague-Visby Rules' within the clause.

215    As to the reasoning in Happy Ranger QBD, in The Superior Pescadores Longmore LJ (at [35]) observed that he did 'not regard this paragraph of the judgment (para [31]) as saying that the words "as enacted in the country of shipment" could not refer to the Hague-Visby Rules if, for example, the particular paramount clause made no specific reference to the Hague-Visby Rules in some other part of the same clause but those Rules had in fact been enacted in the country of shipment'. In The Superior Pescadores, Tomlinson LJ observed (at [49]-[51]) that he may have expressed himself differently in the Happy Ranger QBD based on a correct understanding that the 1924 Convention was amended by the 1968 and 1979 Protocols. Further, that he did not intend to say that the Hague Rules as enacted in the country of shipment could not refer to the Hague-Visby Rules even if the particular paramount clause made no specific reference in some other part of the same clause, but those Rules had in fact been enacted in the country of shipment', but he considered his approach to the construction of the paramount clause in that case remained correct.

216    The primary judge made reference to Poralu's submissions and to the passages in The Superior Pescadores and Happy Ranger QBD to which I have referred as well as other aspects of the reasoning in The Superior Pescadores before concluding:

171    Since the paramount clause in the present case, as identified, refers separately and deliberately to the Hague Rules and the Hague-Visby Rules, the conclusion in The Superior Pescadores is inapplicable, but the reasoning of the Court of Appeal in relation to other cases where there was such a differentiation nevertheless applies.

172    In the circumstances, since the Hague Rules were not enacted in Ireland, the first sentence of the paramount clause has no application, and the second sentence does. On that basis, Art 10(c) is not satisfied.

217    Notwithstanding that the competing construction is available for the reasons given by the primary judge, I have come to a different conclusion of the meaning of cl 3(a) of the bill of lading and a different conclusion to that Tomlinson LJ reached on a similarly worded paramount clause in Happy Ranger QBD. For the reasons already given, I am not persuaded that the difference in the use of 'Hague Rules' and 'Hague-Visby Rules' is a compelling reason to exclude the Irish Act from the first sentence of the clause. Further, I am also not persuaded that the construction that another court has placed on a different, albeit similar, clause in a different contract made in a different commercial context and at a different time is of significant assistance to the construction of the relevant clause in this case. The same observation applies to the construction of the clause under consideration in The Superior Pescadores.

218    As I have said earlier, cl 3(a) of the bill of lading must be construed as a term incorporated by reference into the contract of carriage governed by English law, in context and with regard to the subject matter and purpose of the contract; to carry goods by sea from Ireland to Australia. When regard is had to context and purpose, 'the Hague Rules contained in the [1924 Convention], as enacted in [Ireland]' means the Irish Act. Therefore, subject to the possible 'compulsory' application of the Hague-Visby Rules by operation of an applicable national law, the Irish Act applies to the contract of carriage. A consequence is that the part of cl 3(a) of the bill of lading and cl 3(a) of the booking note that purport to apply Arts I - VIII of the 1924 Convention and limit liability of the carrier to £100 (GBP) per package or unit must be read as simply not applicable to the contract of carriage in this case.

Is the carriage in a trade to which the Hague-Visby Rules apply compulsorily?

219    As noted earlier, English law is the proper law of the contract of carriage. There was no evidence, expert or otherwise, as to the English law applicable to contracts for the carriage of goods by sea. Further, it is unclear to me if there were any agreement between the parties as to the applicable English law where, as here, a bill of lading was not issued under the contract of carriage. Otherwise, in the circumstances of this case it is clearly not appropriate to assume that English law is the same as Australian law: see, e.g., Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492 at [162] (Heydon JA, Spigelman CJ and Sheller JA agreeing). While for the reasons Rares and SC Derrington JJ have given, there does not appear to be any real doubt that under English law it was not necessary for a bill of lading to be issued for the Hague-Visby Rules to apply to the contract of carriage, in the circumstances, I prefer not express any view on the extent to which the Hague-Visby Rules apply to the contract of carriage as a matter of English law. In any event, for the reasons which follow, I do not consider it is necessary to determine if the Hague-Visby Rules apply compulsorily to the carriage of goods by sea in this case in order to answer the separate questions.

220    The Hague-Visby Rules do not apply to a bill of lading issued by the carrier to the shipper under the charter-party where the shipper is also the charterer of the vessel: J[96] (and the cases cited therein). Subject, of course, to negotiation of the bill to a third party and the bill of lading then taking effect in the hands of the third party as a document of title regulating the relations between the carrier and the holder of the bill. In this case, the shipper and putative charterer were at all times the same person. Therefore, the Hague-Visby Rules could not apply compulsorily under English law if the contract of carriage were a charter-party.

221    If the contract of carriage were a charter-party and, therefore, the Hague-Visby Rules would not apply to a contract of carriage 'covered by a bill of lading', the Hague-Visby Rules, as enacted in Ireland, would apply by agreement to the contract of carriage. In this respect, the Hague-Visby Rules would apply to the charter-party, with all necessary amendments: Adamastos Shipping at 152, 154, 170; RW Miller & Co Pty Limited v Australian Oil Refining Pty Limited [1967] HCA 50; (1967) 117 CLR 288 at 295-297 (Windeyer J in dissent, but not on this point of principle), see, also, 292 (Barwick CJ), 299-300 (Owen J). If the contract of carriage were not a charter-party, the Hague-Visby Rules either, as enacted in Ireland, or by operation of COGSA 71, would apply to the contract of carriage by agreement or by law. Therefore, on any view, the carrier's liability must be limited in accordance with Art 4(5) of the Hague-Visby Rules.

222    It is also unnecessary to decide if the Hague-Visby Rules apply by operation of COGSA 71 or if the contract of carriage be a charter-party for the purposes of Arts 1(b), 1(g), 5, 10(2), 10(3), 10(6) and 10(7) of the Australian Rules. If the contract of carriage were a charter-party to which the Australian Rules would not apply, the Irish Act applying the Hague-Visby Rules, would apply to that charter-party. If the contract of carriage were not a charter-party excluded by the Australian Rules, the Australian Rules would remain inapplicable because 'the Brussels Convention as amended by either the Visby Protocol or the SDR Protocol or both' '(or a modification of [that Convention] by the law of a contracting State) would apply, by agreement or by law, to the carriage, or otherwise has effect in relation to the carriage'. That exclusion would apply if the Hague-Visby Rules apply by selection of English law as the proper law of the contract and by operation of COGSA 71. That exclusion would also apply if the Hague-Visby Rules, as enacted in Ireland, apply. In that case, the Convention (Hague-Visby Rules) would apply 'by agreement' or 'otherwise has effect in relation to the carriage'.

223    In short, in whatever way the contract of carriage be characterised and irrespective of whether or not the Hague-Visby Rules apply to the carriage by operation of COGSA 71 (as the proper law of the contract), the Hague-Visby Rules apply to the carriage 'by agreement'. Therefore, the carrier's liability is limited as described in Art 4(5) of the Hague-Visby Rules.

Is Rederij Dijksgracht entitled to the benefit of the contractual limitation of liability?

224    Poralu contended that the primary judge was wrong to conclude that Spliethoff had authority to enter into the contract of carriage as agent for the shipowner, Rederij Dijksgracht, and, therefore, the shipowner was able to rely on the limitation of liability (in cl 3(a) of the booking note) even though it was not a party to the contract. For the reasons given by Rares and SC Derrington JJ, I agree that the primary judge was correct in his conclusion that Rederij Dijksgracht was entitled, through the Himalaya clause (cl 11 of the standard terms of each of the booking note and bill of lading), to the benefit of the limitation of liability in cl 3(a) of the bill of lading and, through that clause, the limitation in Art 4(5) of the Hague-Visby Rules.

Disposition

225    I agree with Rares and SC Derrington JJ that the appeal must be allowed in part, the amended notice of contention must be dismissed and that the cross-appeal must be dismissed. I also agree that the separate questions should be answered as described in paras [160]-[161] of the joint reasons.

Associate:

Dated: 8 September 2023