Basinco Motors Limited V. Woermann-line & Anor (2009)

LAWGLOBAL HUB Lead Judgment Report

O. ADEKEYE, J.S.C

This appeal is against the judgment of the Court of Appeal, Lagos Division delivered on the 5th day of March 2001. The appellant Basinco Motors Limited as plaintiff instituted an action before the Federal High Court, Lagos, against the Respondents, Woermann-Line and Umarco (Nigeria) PLC as 1st and 2nd defendants jointly and severally for the under mentioned claims:-

a. The sum of 38,198.35 Deustch Marks or its equivalent in Naira being the value of the plaintiff’s consignment of goods short landed by the defendants.

b. The sum of N388,116.12 being incidental expenses incurred by the plaintiff as a result of the defendant negligence and loss of profits on the goods.

The case of the plaintiff before the trial court in a nutshell was that the appellant a limited liability company engaged in the business of automobile spare parts and vehicle accessories ordered for 2 pallets and one carton of car spare parts from Terramem GMBH of Hamburg Germany. Woermann-Line a shipping company based in Hamburg Germany conveyed the items down to Nigeria on board the ship M. V. Fiona in the container LCL 1X20NOCEAU484035-1 to be delivered to the warehouse of the 2nd Respondent Umarco (Nigeria) Plc, an agent of the 1st Respondent. The particulars of the consignment are:-

1. 15 pieces of cylinder head 1150102621.
2. 15 pieces of cylinder head 1150102821
3. 100 set of ignition cable M102 Engine ZEF 466.
4. 2000 sets Gasket for Hengst filter.

A certificate of valued dated 11th day of May 1992 was issued by the shippers to the appellant. On arrival at the Apapa Port Warehouse of the 2nd Respondent a routine check of the container was conducted. It was discovered that the container landed with part of the contents missing. The Respondents acknowledged the short delivery of the consignment and accepted liability in their letter of the 4th of November 1992 to the appellant. The appellant went to court because the 1st Respondent owed it a duty of care to deliver the consignment as contained in the bill of lading Ref.No.W013 of 21st of May 1992. When it became apparent at the trial court that the appellant was not a party to the contract of carriage, the Respondents filed a motion on notice dated the 30th of May 1994 pursuant to Order 27 Rules 1, 2 and 3 of the Federal High Court Civil Procedure Rules, 1976, section 375(1) of the Merchant Shipping Act Cap 224, Laws of the Federation 1990 and under the inherent jurisdiction of the court seeking the following relieves: –

1. “An order dismissing/striking out this suit on the ground that the plaintiff is not a proper party, not having been named either as consignee or endorsee on the bill of lading and or if so named, having, in turn, endorsed the said Bill of Lading to other parties, has no locus standi to institute and maintain the suit.
2. An order striking out the name of the 2nd defendant from the substantive suit on the ground that the 2nd defendant is an agent of a disclosed principal”.

The presiding Judge took arguments of counsel in respect of the application. In a considered ruling delivered on the 26th of July 1996 the trial court dismissed the suit in limine for lack of locus standi by the plaintiff/appellant. Dissatisfied with the ruling the appellant filed a Notice of Appeal to the Court of Appeal urging the court to reverse the decision of the trial court. On the 15th of March 2001 the Court of Appeal dismissed the appeal and affirmed the judgment of the trial court. Aggrieved by the decision of the Court of Appeal, the appellant further filed an appeal in this court. At the hearing of this appeal – the appellant adopted and relied on the Brief filed on the 26th of November 2003 and the Respondents also adopted and relied on their joint brief filed on the 25th of February 2004. The appellant formulated three issues for determination as follows:-

1. “Whether the appellant even though described in the bill of lading as “Notify Party” indeed lacked locus to sue upon the bill of lading.
2. Whether the failure by the lower Court to consider the Reply Brief of Argument filed by the Appellant did not amount to a breach of the Appellant’s right to a fair hearing as guaranteed by Section 36(1) of the 1999 Constitution of the Federal republic of Nigeria.
3. Was the lower Court right in holding that the Appellant cannot maintain an action against the Respondent in tort by reason of Section 375(1) of the Merchant Shipping Act 1990 when it is the purchaser and a Bailor for value having paid the price and freight and the property in the goods had passed to it by virtue of it being the holder of the original copy of the bill of lading and in possession of part of the Consignment”.

The Respondents distilled two issues for determination arising from the grounds of appeal namely: –

1. “Whether a person named as a NOTIFY PARTY on a Bill of Lading can institute and maintain an action under any guise in respect of the Bill of Lading.
2. Whether the Court of Appeal was right when it upheld the decision of the Federal High Court to determine the locus standi of the Appellant to institute this suit based on the facts in the statement of claim alone”.

I intend to be guided by the Issues raised for determination by the appellant – which I shall proceed to consider seriatim.

ISSUE ONE

“Whether the Appellant even though described in the bill of lading as “Notify Party” indeed lacked locus to sue upon the bill of lading”.

The learned counsel for the appellant vehemently defended the position of the “Notify Party” in relation to locus standi on a bill of lading. He made copious submissions in the appellant’s brief that the trial and lower courts failed to give due consideration to the endorsement on the front and reverse side of the Bill of Lading so as to determine the operative part and give effect to them. The learned counsel conceded that in Nigeria the standing to sue on a bill of lading is conferred by statute by section 375(1) of the Merchant Shipping Act Cap 224 Laws of the Federation of Nigeria 1990, he however disagreed with the pronouncement of the lower court that

“The locus standi to sue on a bill of lading, either in contract, bailment, or tort is statutory. It cannot be conferred by the alleged acts of the Respondent” on page 114 of the record of appeal as not being the correct position of the law. The learned counsel urged this court to be persuaded by the opinion of a world acclaimed law expert in the province of Merchant law, Tetley Williams in his book on MARINE CARGO CLAIMS 3rd Edition that when a bill of lading defines the parties to the contract then it would seem as if the party named as merchant within the con of the terms of the bill would be able to take suit on the contract of carriage if he sustained damage and loss. The learned counsel submitted, that the lower court failed to examine the nature of the relevant bill of lading, and that the bill as a document of title is equivalent in law to possession of the goods. This document entitles the appellant as a holder of the original bill of lading to the delivery of the goods. Reference was made to Payne & Ivamy Carriage of Goods by Sea, Eleventh Edition and the case of Horse v. Bidell Brothers 1912 A.C 18. The learned counsel considered the three types of bill of lading and the legal effect of the holder of the original bill of lading such as the appellant in a contract of carriage of goods by sea. He further made submissions on:-

1. Type of contract and nature of the Bill of lading, and its effect on the “Notify Party”.
2. Proprietary/Beneficial Interest of a Notify Party.
3. Implied contracts.

He cited a number of foreign cases from the United Kingdom, United States of America and France to conclude that the appellant though referred to simpliciter as a “Notify Party” may be able to sue as the holder of the original copy of the bill of lading. Furthermore in these countries the holder of the original bill of lading is entitled to possession and can sue upon the contract of carriage in respect of the bearer bill of lading. In the light of the trend in the civil law jurisdictions of the United States of America and France, the decision of this honourable court may not be good law today notwithstanding the provision of section 375 (1) of the Merchant Shipping Act 1990.