Nedlloyd Lijnen B.v. Rotterdam V. Ofelly Agro-farms & Equipment Co. Ltd. & Anor (2013)

LawGlobal-Hub Lead Judgment Report – COURT OF APPEAL

JOSEPH SHAGBAOR IKYEGH, J.C.A (Delivering the Leading Judgment)

This is an appeal from a decision of the Federal High Court of Justice sitting in Lagos (the court below), awarding the total sum of One Million, Two Hundred and Ninety Three Thousand, Six Hundred and Sixty United States Dollars, Forty Cents (US$ 1,293,660.40) to the 1st respondent against the appellant for breach of contract of bill of lading and for bailment, detinue and negligence arising from the alleged failure of the appellant to deliver a cargo of motor-vehicle spare parts supplied by the 1st respondent on the appellant’s time chartered carrier, the MV Nedlloyd Recife.

In outline, the case at the court below revolved on the facts that the 1st respondent engaged a cargo ship chartered by the appellant to convey a container comprising some motor-vehicle spare parts or components covered by a bill of lading which described the goods to be 1 x 40 DC container(s) S.T.C. said to contain 1080 piston skirt (engine parts and accessories) 2,642 Head Lamps for assembling “parts and accessories”.

The bill of lading confirmed the total number of the packages to be 3,722, valued Thirty-Six Thousand, One Hundred and Seventy-Seven United States Dollars, Ninety-Two Cents (US$ 36,177.92). The claim as instituted by the 1st respondent as the plaintiff at the court below was for the total sum of Five Hundred and Fifty-Eight Thousand, Three Hundred United States Dollars (US$ 558,300), representing the alleged value of the goods.

The goods were to be shipped from Buenos Aires, Argentina, on the appellant’s time chartered common carrier for reward, for the goods to be sold on profit in Nigeria. The consignment of merchandise did not reach its destination. The appellant alleged the cargo ship went aground or sank off the coast of Sao Francisco Dosul in Brazil resulting in its failure to arrive Lagos with the merchandise.

In the course of the case at the court below, the 1st respondent amended her statement of claim by allegedly ballooning the original claim to US$ 1,396,087.90 as special damages. The sum of US$ 1,293,660.40 out of the said enlarged claim of special damages was granted by the court below after it heard evidence from the 1st respondent as plaintiff and the appellant as the 1st defendant together with the final address of their respective learned counsel.

The appellant expressed her dissatisfaction with the said judgment by filing a notice of appeal with eleven grounds of appeal against it on 25-04-05. The notice of appeal was subsequently amended by leave of the court granted on 01-11-12 by increasing the grounds of appeal to thirteen. In a brief of argument dated and filed on 02-11-12, the appellant raised thirteen issues for determination corresponding to the grounds of appeal as follows:

“1. Was the learned trial judge right or wrong when he held that the Plaintiff’s action which was originally founded on an alleged breach of a contract of affreightment (contract of carriage by sea) and pursuant to which they applied for and obtained an arrest of several vessels said to belong, to the Defendant/Appellants, was no longer one in contract but in the tort of detinue, bailment and negligence to the exclusion of the contract aforesaid? (Ground 1).

2. Was the lower court right or wrong to have deprived the 1st Defendant/Appellant of the various legal Defences that have accrued to them under the Hague Rules, 1924, the Merchant shipping Act, 1990 and the Admiralty Jurisdiction Act, 1991 (all of which were applicable to this case) on the ground that those defences can not avail the Appellants because the action was founded on the common law principles of bailment? (Ground 2).
3. Whether from the facts of the case, the plaintiff/Respondent’s claim before the court was not time-barred? (Ground 3).
4. Whether the lower court was right or wrong in holding that the Respondent could validly maintain an action against the Appellants when the said Appellants were not the beneficial owners of the MV “Nedlloyd Recife” as respect all her shares at alt material time to the claim as provided by the mandatory provisions of section 5(4) of the Admiralty Jurisdiction Act, 1991? (Ground 4).
5. Was the learned trial judge right or wrong when he held that the Appellants failed to satisfy him that they were not the owners but charterers of the MV “Nedlloyd Recife” so as to avail themselves of the defences available to them as time charterers of the said vessels? (Ground 5).
6. Whether the learned trial Judge was right or wrong when he held that the defence absolving the Appellants of all liability for the 1st Respondent’s act of knowingly and negligently mid-stating the value of the goods under the Hague Rules, 1924 incorporated into the contract of Carriage between the parties would not avail the Appellant in this case? (Ground 6).
7. Was the learned trial Judge right or wrong when he found that the 1st Respondent has proved its claim and proceeded to enter judgment in their favour for the total sum of US$1,293’660.40 notwithstanding that the Plaintiff/Respondent knowingly and with the intention to deceive the Court inflated its original claim of US$36’177.92 to US$653’420? (Ground 7)
8. Whether the learned trial Judge was right or wrong when he held that there was no proof before him that the Ship sank but that the failure to deliver the 1st Respondent’s cargo was due to the Appellants’ negligence, bailment and detention, and that consequently, the defences of limitation of liability under the provisions of the Merchant Shipping Act Capt 224 Laws of the Federation of Nigeria, 1990 would not avail the Appellant? (Ground 8).
9. Whether having regard to the evidence led before him, the learned trial Judge was right or wrong in awarding to the 1st Respondent the sum of US$535’804.40 and US$4’436 as reimbursable expenses? (Ground 9).
10. Was the learned trial Judge right or wrong when he held that he would accept the plaintiff/1st Respondent’s evidence of the value of the goods to be US$653’420 as against US$36’177.192 when their invoices and other supporting documents were in other languages than English, being the official language of the Court? (Ground 10).
11. Whether from the circumstances of the case and on a preponderance of the evidence led, the learned trial Judge was right in entering judgment for the 1st Respondent and against the Appellants? (Ground 11).
12. Whether or not the learned trial Judge had jurisdiction to adjudicate over the Plaintiff’s claim when same has been patently vitiated by reason of the Plaintiff/Respondent’s failure, neglect and/or refusal to seek and/or obtain leave of court prior to issuing its Writ of Summon for service on at least one foreign Department, or mark the Writ “concurrent” or for failing to limit the period within which the 1st Appellant may enter appearance to the mandatory minimum of thirty (30) days. (Ground 12)
13. Whether or not the learned trial Judge was right to have proceeded to enter judgment based on documents that were patently forged. (Ground 13).”

Issues 12 and 13 (supra) were argued together first to the effect that from the bill of lading in Exhibits 2 and 8 the appellant was ordinarily resident in the Netherland, outside the territorial jurisdiction of the court below, while the 2nd respondent sued along with the appellant as the 2nd defendant at the court below was at all material times ordinarily resident in Nigeria, consequently, the 1st respondent as the plaintiff at the court below was required by Order X rules 12 and 13 of the Federal High Court (Civil Procedure) Rules,1976,then applicable to the suit, to obtain the leave of the court below to issue the writ of summons against the appellant and to also endorse the writ for service outside the jurisdiction of the court below as a “concurrent’ writ and having failed to do so, the writ was incurably defective and robbed the court below of the jurisdiction to entertain the action vide sections 97 – 99 of the Sheriffs and Civil Process Act read with the cases of Owners of the MV “Arabella” v. Nigeria Agricultural Insurance Corporation (2008) 11 NWLR (pt. 1097) 182 at 206, Agip (Nig.) Ltd. v. Agip Petrol International and Ors. (2010) 5 NWLR (pt. 1187) 348, N.P.A. v. Eyamba (2005) 12 NWLR (pt.939) 409 at 448, Touton S.A. v. Grimaldi Compagnia Di Navigaziani S.P.A. and Ors (2011) 4 NWLR (pt. 1236) 1 at 24 – 26, Purechem Ind. Ltd. v. Spica Shipping Co. Ltd. and Ors. (2012) 3 NWLR (pt. 1287) 327 at 350 – 351, Skenconsult v. Ukey (1981) 12 N.S.C.C. 1, Union Beverages Ltd. v. Adamite Co. Ltd. (1990) 7 NWLR (pt. 162) 348 at 355 – 356, N.N.P.C. v. Elumah (1997) 3 NWLR (pt.492) 195, Macfoy v. U.A.C. (1961) 3 All E.R. 1169, Nzom v. Jinadu (1987) 1 NWLR (pt.51) 533, Yankwa v. Shallangwa (1996) 4 NWLR (pt.443) 489 at 497.

The appellant argued issue 13 (supra) to the effect that the 1st respondent concocted a document written in Spanish or mostly in Spanish arbitrarily increasing the claim of special damages to US$1,087.90 far beyond the actual value of the 3,722 packages contained in the bill of lading, and the two invoices, Exhibits 10A, 10B, 10C, 10D for the cargo of merchandise which was about US$36 ,177.92, therefore the exaggerated claim contained in the amended statement of claim should not have been the basis of the judgment of the court below and the award of so much of the money pleaded in the amended statement of claim should be set aside.

In arguing issue 1, the appellant stated that the action was commenced ‘in rem’ based on a contract of bill of lading between the 1st respondent and the carrier owned by the appellant and the terms of contract were confined to the bill of lading, therefore the 1st respondent could not have based her case on tort but on the terms of the contract vide Allied Trading Co. Ltd. v. GBN Line S.C. (1980 – 1986) 11 N.S.C.C. 348 at 355 and that flowing from the position above the 1st respondent could not have delivered the cargo to the appellant or entered into any contract of carriage with the appellant directly but through the shipper who would deliver the cargo to the carrier for shipment and the carrier would issue a bill of lading signed by the master of the carrier or vessel acknowledging receipt of the cargo on board the vessel vide Article 3 rules 3 and 4 of the Hague Rules, 1924, which were incorporated into the contract read with the cases of Onwadike and Co. Ltd. v. Brawal Shipping (Nig.) Ltd. and Anor. (1996) 1 NWLR (pt.422) 65 at 80, Armour and Co. Ltd. v. Walford (London) Ltd. (1921) 3 K.B. 473 at 477, Eagle Superpack (Nig.) Ltd. v. A.C.B. Plc (2006) 19 NWLR (pt.1013) 20 at 48; consequently the court below was wrong to find the appellant liable for the tort of detinue, and/or negligence to the exclusion of the contract of bill of lading in question.

The appellant also submitted on issue 1 (supra) that assuming the action was in tort, the “clear evidence” of the DW1 that the vessel carrying the cargo sank as a result of bad weather was a case of loss of the cargo occasioned by peril at sea and cannot sound in the toft of detinue which implies the wrongful refusal to deliver up a chattel to its owner vide the cases of Iheanacho and Anor. v. Uzochukwu and Anor. (1977) (?) 2 NWLR (Pt.487) 257 at 268, Unipetrol Nig. Plc. v. Buraimoh (2004) 15 NWLR (pt.897) 641 at 657, Labode v. Otubu and Anor. (2001) 7 NWLR (pt.712) 256 at 276, Incar Nig, Plc. v. Uralo General Ent. Ltd. (1998) 13 NWLR (Pt.582) 346 at 362 and Black’s Law Dictionary (Eigth Edition) 481, Salmond on the Law of Torts III (17th Edition) 1977.

The appellant submitted further on issue 1 that in cases of affreightment or carriage of goods by sea, the bailee or carrier is generally the ship owner or bareboat charterer and the charterer who is not in physical control of the cargo vessel cannot be a bailee of the goods, although there are suggestions that he may have a role as an intermediate bailee vide The Mineral Transporter or Candlewood Navigation Corporation Ltd. v. Mitsui Osk Lines Ltd. (1986) A.C. 1, therefore the appellant could not have been liable for bailment as wrongly held by the court below.

Issues 2 – 6 were argued together to the effect that the unchallenged evidence of DW1 and Exhibits 2, 8, 10A, 10B, 10C and 10D established that the cargo’s value was US$36,177.92 not the “exaggerated” amount of US$653,420 put on the goods by the 1st respondent contrary to Articles 4 and 5 of the Hague Rules, 1924. More so, the invoice relied upon by the 1st respondent was in Spanish without translation in English, nor was it notarised, therefore the court below was wrong to accept the bloated value of the goods by the 1st respondent; that the defence of the appellant through the DW1 that the goods perished in the wreck of the vessel caused by bad weather frustrated the contract and discharged the appellant from liability vide Halsbury’s Laws of England (4th Edition) (pagination not supplied) and Marine Cargo claims (3rd Edition) by William Tetley pages 31 – 32 and 539; that alternatively, even if the defence of frustration fails the loss of the goods occurred without the fault or privity of the appellant thus limiting her liability to N833, 827 .05 kobo reckoned with the 17,595 registered tonnage of the vessel assessed at N4, 739k per ton of the vessel in accordance with section 363(1) and (2) of the Merchant Shipping Act (M.S.A.) cap 224 Laws of the Federation of Nigeria (LFN) 1990, Exhibits 12 and 13, and the cases of San Lorenzo Seatrade Corporation (owners of Mt “Allergra”) v. Nigerian Ports Plc and ors. (1993 – 1995) 5 N.S.C.C. 250, Patterson Steamships Ltd. v. Robin Hood Mills Ltd. (1937) 5 LL.R 33, Lennards Carrying Co. Ltd. v. Asiatic Petroleum Co. Ltd . (1914) 1 K.B. 419, Bauchamp v. Tunel (1955) 1 T.L.R. 695. The Empire Jamaica (1955) 1 LL.R. 50, The Obey (1886) L.R.I.A. and E 102.