MSC Mediterranean Shipping Company S.A. v Glencore International AG

A carrier does not satisfy a negotiable bill of lading requiring surrender in exchange for the goods or a Delivery Order merely by supplying electronic release codes. In that contractual context, a Delivery Order must contain the carrier’s undertaking to deliver the goods to the identified holder or its agent. A release note which permits delivery to whoever first presents a code does not provide that undertaking.

Delivery by a symbolic act depends on the contract. Provision of a means of access to goods is not itself delivery where the contract contemplates actual delivery or a substitute undertaking. A course of successful deliveries using codes does not create an estoppel without a clear representation accepting delivery to an unauthorised code-holder.

Glencore was the holder of a negotiable bill of lading for three containers of cobalt carried by MSC to Antwerp. After Glencore’s agent surrendered a copy bill and paid charges, MSC’s local agent sent a release note containing electronic import pin codes. Two containers were collected by unauthorised persons before Glencore’s haulier arrived.

Andrew Smith J gave judgment for Glencore. MSC appealed, contending that the codes either constituted delivery or a Delivery Order, and that Glencore was estopped by the parties’ previous use of the electronic release system. Shortly before the appeal hearing, MSC also sought to adduce fresh evidence and remit causation for investigation. The central issue was whether the contractual delivery obligation was discharged by issuing codes that enabled collection by their first presenter.

1. Appeal dismissed. Sir Christopher Clarke held, with whom Henderson and Lewison LJJ agreed, that MSC had not performed its obligation under the bill of lading by providing the release note and pin codes.

2. The contractual reference to a Delivery Order was to be construed in its commercial and English-law context. It required the essential attribute of a ship’s delivery order under section 1(4) of the Carriage of Goods by Sea Act 1992: an undertaking by the carrier to deliver to the identified person. The release note did not contain an undertaking to deliver to Glencore or its agent. At most, it enabled the terminal to release goods to whoever first entered the codes. That was not an equivalent substitute for the bill of lading.

3. Issuing the codes was not symbolic delivery. Whether a symbol amounts to delivery depends on the contract. This bill contemplated actual delivery against the bill or delivery pursuant to a qualifying Delivery Order. A means of obtaining access to the goods did not itself effect delivery. The practical ability of the carrier to prevent release remains relevant to actual delivery, consistently with [2012] 1 Lloyd’s Rep 637, but parties may expressly agree that symbolic delivery will suffice. They had not done so here.

4. The prior 69 shipments did not establish an estoppel. They showed only that delivery against codes had in fact been made to Glencore or its agents. They did not amount to a clear representation that delivery to a thief who obtained the codes would discharge MSC’s obligations. Steinweg’s authority to arrange delivery did not extend to accepting that result, particularly as Glencore was unaware of the electronic system when the contract was made.

5. The court refused permission to amend the appeal and adduce fresh evidence concerning alleged computer hacking. The causation issue had not been pleaded or pursued at trial, the evidence was unlikely materially to affect the result, and it did not establish either the source of the leak or conduct by Glencore or Steinweg sufficient to break the chain of causation.

• Court of Appeal (Civil Division) — MSC’s appeal was dismissed: [2017] EWCA Civ 365.
• High Court, Queen’s Bench Division — Andrew Smith J gave judgment for Glencore on 10 July 2015. The parties had agreed damages, subject to liability, of US$1,109,364.78.