TICC Ltd v Cosco (UK) Ltd

Notice incorporating contractual terms is effective only where the party relying on it has done what is reasonably necessary to bring the terms to the other party’s attention. Whether that requirement is met depends on all the circumstances.

Where freight rates and charges are negotiated directly with the party paying them, a general notice sent to shippers elsewhere may be insufficient, particularly where the carrier’s local agent promised that any surcharge would be communicated directly. A surcharge is not incorporated merely because it was notified to another party who may also be liable under the contract.

TICC Ltd, the English consignee of goods shipped from Hong Kong, claimed repayment of a peak summer surcharge demanded by COSCO (UK) Ltd on freight-collect shipments to Felixstowe. The contracts were evidenced by bills of lading incorporating the carrier’s tariff and other requirements regarding charges.

The Central London County Court held that TICC was entitled to recover most of the surcharge. COSCO appealed, arguing that the Hong Kong freight forwarders were the original shippers, that notice sent to them incorporated the surcharge, and alternatively that their knowledge was attributable to TICC. The central issue was whether the surcharge had been incorporated into the contracts by the notice sent to the Hong Kong shippers.

1. Appeal dismissed. The surcharge was not incorporated into the relevant contracts of carriage. The order below was upheld, with costs to be assessed.
2. The general rule is that contractual terms are incorporated by notice only where the party relying on the notice has done what is reasonably necessary to bring the information to the other party’s attention. That is a question of fact depending on all the circumstances, as illustrated by Parker v South Eastern Railway Co (1877) 2 CPD 416, Hood v Anchor Line (Henderson Brothers) Limited [1918] AC 837 and Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163.
3. Even assuming that Cycle and IFB were the shippers and principals under the bills of lading, the relevant freight rates and charges had been negotiated directly in England between TICC and COSCO UK. TICC was the party interested in, and responsible for paying, the freight on the freight-collect shipments. The question of a surcharge had also been discussed directly, and COSCO UK had assured TICC that it would be informed if a surcharge were introduced.
4. In those circumstances, the general fax sent by the Hong Kong agent to Hong Kong customers was not reasonably sufficient notice to TICC of the surcharge on the freight-collect route to Felixstowe. The surcharge directly affected the negotiated freight levels and could not properly be treated as a separate issue.
5. The alternative argument that the Hong Kong shippers’ knowledge was attributable to TICC also failed. The carrier could have communicated the surcharge to COSCO UK or expressly stated it on the bills of lading. It was not entitled to rely on a general notice sent elsewhere.

• Court of Appeal (Civil Division): [2001] EWCA Civ 1862. Appeal by COSCO (UK) Ltd dismissed, with costs to be assessed.
• Central London County Court, Business List: HHJ Hallgarten QC ordered repayment of US$11,500, finding that the surcharge had not been sufficiently notified for most shipments.