Jindal Iron and Steel Co. Ltd. & Ors v Islamic Solidarity Company Jordan Inc. & Anor

Article III r.2 of the Hague Visby Rules regulates the manner in which cargo functions undertaken by the carrier are performed. It does not require the carrier to undertake every loading, stowage or discharge operation. The parties may allocate those functions by contract, subject to proper and careful performance where the carrier undertakes them.

Construction is context-specific. A FIOST term in a freight clause may address payment only, while clearer operational wording can transfer performance and liability to charterers. Where bills incorporate that allocation, shippers and consignees cannot claim against the shipowner for cargo operations assigned to them, absent intervention by the shipowner.

Steel coils were carried under a voyage charterparty and bills of lading incorporating its terms. The claimants alleged damage caused by defective loading, stowage, dunnage, securing and discharge.

On agreed preliminary issues, Mr Nigel Teare QC, sitting as a Deputy High Court judge, held that the charterparty transferred responsibility for the cargo operations to the charterers. Under the bills, he held that the defendants had no liability provided the damage was not caused by their acts or omissions, relying on the relevant Article IV defences.

The claimants appealed on construction and on the effect of Articles III rules 2 and 8 of the Hague Visby Rules. The respondents challenged the qualification of the bill-of-lading answer. The central issues were whether the charterparty transferred responsibility for the steel-coil cargo operations and whether the Rules invalidated that allocation.

1. Disposition. Lord Justice Tuckey delivered the main judgment. Lord Justice Waller and Mrs Justice Black agreed. The claimants’ appeal was dismissed with costs. The respondents’ cross-appeal was allowed to the limited extent of deleting the qualification to the answer on the bills of lading. Permission to appeal to the House of Lords was refused.
2. At common law, responsibility for loading, stowage and discharge rests with the shipowner unless clear contractual words transfer the relevant obligation. Payment, performance and liability for defective performance are distinct matters. No presumption makes them the responsibility of the same party.
3. The FIOST wording in clause 3, appearing in the freight clause, addressed cost only. Clause 17 contained clear words transferring the obligation to load and discharge. Read with clause 3 and the cargo description, its reference to trimming covered the lashing, securing and dunnaging actually required for steel coils. The failure to delete the standard-form definition of trimming did not defeat that construction. The charterers were responsible for improper performance.
4. The court was bound by the majority reasoning in G.H. Renton & Co. v Palmyra Trading Corporation (1957) AC 146, which approved the interpretation of Article III r.2 stated by Devlin J in Pyrene Co. Ltd. v Scindia Navigation Co. Ltd. (1954) 2 QB 402. Article III r.2 concerns the manner in which obligations undertaken by the carrier are performed. It leaves the parties free to determine contractually whether the carrier undertakes loading, stowage or discharge. Article III r.8 therefore did not invalidate the allocation in clauses 3 and 17.
5. Those clauses were incorporated into the bills of lading. They relieved the defendants of responsibility for the cargo operations allocated to the shippers, charterers or receivers. The defendants therefore did not need to rely on the Article IV r.2(i) or r.2(q) defences. The shipper and receiver had no independent contractual cause of action against the shipowner for loading or discharge unless the shipowner intervened.
6. The intervention proviso remained applicable. Masterial supervision or intervention may limit the charterers’ liability or impose responsibility on the shipowner to the extent of the intervention. The legal basis, scope and any duty to intervene were left undecided because they had not been argued.
7. Lord Justice Waller added that, under section 2(1) of the Carriage of Goods by Sea Act 1992, transfer of the bill vested rights of suit in the consignee as if it had been a party, but did not give it a better contractual position than the shipper.

1. Court of Appeal (Civil Division): On appeal from Mr Nigel Teare QC, sitting as a Deputy High Court judge, the court dismissed the claimants’ appeal with costs and allowed the respondents’ cross-appeal to the limited extent of deleting the qualification to the bill-of-lading answer.