034-SLLR-SLLR-1998-V-2-P.-B.-UMBICHY-LIMITED-v.-MV-MOSCEINCE-AND-JIUGOLINIJA-RIJEKA-YUGOSLAVIA.pdf
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P. B. Umbichy Limited v. "MV Mosceince“- and
Jugolinija Rijeka Yugoslavia
291
P. B. UMBICHY LIMITED
v."MV MOSCEINCE" AND JUGOLINIJA RIJEKA YUGOSLAVIA
COURT OF APPEAL
D. P. S. GUNASEKERA, J. (P/CA),
J.A. N. DE SILVA, J.
C. A. APPEAL NO. 97/88ACTION IN REM NO. 9/85MAY 13 AND JULY 21, 1997.
Admiralty Law – Arrest of ship – Shortfall in delivery of consignment of Turkishred split lentils – Failure to establish weight – Admission of documents subjectto proof – SS. 61 and 62 of Evidence Ordinance.
Held:
In view of the denial in the answer and the calling for strict proof of the quantityof the consignment and also in view of the fact that the documents were admittedsubject to proof it is essential and imperative that the plaintiff should have provedthe documents. This was further necessary in view of the printed conditions inthe Bills of Lading. On the face of the Bills of Lading the words 'STW' is typedwhich means “said to weigh". In addition it is printed on the Bills of Lading “weight,measure, marks, numbers quality, contents and value if mentioned in the Bill ofLading are to be considered unknown unless the contrary has been expresslyacknowledged and agreed to. The signing of the Bill of Lading is not to beconsidered as such an agreement". Therefore plaintiff should have called themakers who participated in the weighing of the consignment.
292
Sri Lanka Law Reports
(1998) 2 Sri LR.
APPEAL from judgment of the High Court.
K.Kanag Iswaran, PC with A I. B. Brito Mutunayagam for plaintiff-appellant.Desmond Fernando, PC with Suresh Phillips for defendant-respondent.
Cur. adv. vult.
August 29, 1997GUNASEKERA, J.
The plaintiff-appellant had purchased 1,440 metric tons of Turkish redsplit lentils from the Middle-East Soil Products Corporation of Beyrouthfor US$ 849600 C and F to.be shipped from the Port of Iskenderumto the Port of Colombo in 28,800 bags each weighing 50 kilograms.
Payment was by way of an irrevocable Letter of Credit in favourof the seller opened through the Habib Bank, Colombo. In terms ofthe Letter of Credit the seller had to present –
the manually signed invoices certifying that the merchan-dise was of Turkish origin;
Clear shipped on board Bills of Lading;
Certificates of weight, quality, packing issued by S. G.S. Geneva or Agents whether individually orcombined; and
Phythosanitary and fumigation certificates in order to beable to draw the purchase price.
The full consignment of the contracted cargo was shipped on boardthe motor vessel 'Mosceince' owned by the defendant-respondent andtwo Clean Bills of Lading numbered ISK 001 dated 4th March, 1985for 16,400 bags and 1SK 004 dated 5th March, 1985 for 12,400 bagswere issued by the Master of the vessel. Before the ship arrived inthe Port of Colombo the seller tendered the said two clean Bills ofLading together with the other documents called for under credit,negotiated the said documents and collected the full purchase priceof US$ 849,600. The seller could not have been able to collect any
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P. B. Umbichy Limited v. "MV Mosceince" and
Jugolinija Rijeka Yugoslavia (Gunasekera, J.)
293
payment under the letter of credit but for the issue of clean Bills ofLading by the carrier namely the owners of the vessel 'MV Moscenice'.
Upon arrival of the ship in Colombo the plaintiff-appellant wasinformed by- the local agents of the vessel that the Mates Receiptissued by the Master of the ship at the time of loading had indicatedthat approximately 300 to 400 bags were torn, slack, leaking anddamaged and therefore they could issue only a claused delivery order.
A survey of the consignment indicated that there were only 26,122bags intact whilst 2,428 bags were slack and there was a short deliveryof 250 bags. Of the 26,122 bags described as being intact there wasshortfall of 59,812.38 kilograms in total weight as against the invoicedweight, in respect of the 2,428 slack bags there was a shortfall of7,866.72 kilograms in weight as against the invoiced weight and theshort delivery 250 bags amounted to a shortage in weight of 12,800kilograms as per invoiced weight.
The plaintiff-appellant instituted action in Rem No. 9/85 in the HighCourt of the Republic of Sri Lanka and had the aforesaid vesselarrested for the recovery of loss and damage caused to the appellantby reason of –
the wrongful and unlawful issue of clean Bill of Ladingwhen in fact the said Bills should have been claused inview of the claused mates receipts issued by the Masterof the vessel, and
the damage caused during the carriage to the plaintiff-appellant's cargo. The claim under (a) being for tortiousliability and the claim under (b) being for contractualliability.
In the petition of the plaintiff-appellant dated 3rd March, 1986, itwas stated that the respondent the owner of the motor vessel 'Moscenice'and or its Master and or their agents and servants had acted wrongfullyand unlawfully in issuing or causing to be issued clean Bills of Ladingas a result of which the plaintiff-appellant has suffered loss anddamage in a sum of US$ 66,509.28.
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Sri Lanka Law Reports
(1998) 2 Sri LR.
The parties went to trial and the following admissions wererecorded:
Paragraphs 1 and 3 of the petition are admitted.
Bills of Lading A1 and A2 are admitted.
(2a) Masters Receipt issued at the time of loading indicatedthat the contents of 316 bags were leaking.
that the motor vessel 'Moscenice'’ arrived at the Port ofColombo on 19. 3. 1985.
The following issues were raised on behalf of the parties:Plaintiff's issues
Did the plaintiff purchase a quantity of 1,440 metric tonsof lentils C and F from the Middle East ProductsCorporation of Beyrouth?
Was the plaintiff at all times material the owner of thesaid cargo of lentils?
Was the price of the said cargo of lentils US$849,600.00?
Was the payment of the price for the said cargo to bemade under and in the terms of a Letter of Credit openedby the plaintiff?
Was one of the documents to be tendered under theLetter of Credit a Clean shipped on Board Marine Billof Lading?
On or about the 4th/5th March, 1985, did the defendantissue the Bills of Lading A1 and A2 as Clean shippedon Board Marine Bill of Lading?
Was payment made under the said Letter of Credit uponpresentation of the said Bills of Lading marked A1 andA2?
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P. B. Umbichy Limited v. “MV Mosceince" and
Jugoiinija Rijeka Yugoslavia (Gunasekera, J.)
295
But for the presentation of the said Clean Bills of Ladingmarked A1 and A2 could payment have been made underthe said Letter of Credit?. ./
Did the Mates Receipt issued at the time of loadingindicate that approximately 300 to 400 bags were torn,slack, leaking and damaged?
If so, was the respondent acting wrongfully and un-lawfully in .issuing or causing to be issued Clean Billsof Lading?
Upon arrival of the vessel at the Port of Colombo, didthe survey indicate that:
only 26,122 bags were intact?
2,426 bags were slack?
250 bags were short delivered?
Did the survey also indicate that there was a total shortfallin weight of 76,030.10 kilograms as against the invoicedweight?
If Issues I to 12 or any one or more of them are answeredin favour of the plaintiff what damages has the plaintiffsuffered?
Respondent's Issues
Were the Bills of Lading issued subject to the termsstipulated and the conditions thereof?
If so, can the plaintiff have and maintain this action fordamages?
At the trial Eliyathamby Shanmugam the Chairman of the plaintiffCompany, D. M. Miskin, an offficer of the Habib Bank, S. FredrickJames, Chief Surveyor attached to Lloyds Ltd., V. N. D. HectorLawrance, Store-Keeper of the Sri Lanka Ports Authority and UppakuttyBalasubramaniam, Store-Keeper of P. B. Umbitchy Ltd. gave evidencefor the plaintiff and W. E. Fransiscus, Chief Superintendent, Ports
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Sri Lanka Law Reports
(1998) 2 Sri LR.
Authority, Ft. M. H. J. Perera, Administrative Officer, Ports Authoritytally Section and S. T. Rajanathan, Assistant Commercial Managerof the Sri Lanka Ports-Authority gave evidence for the defendant.
After a consideration of the evidence oral and documentary ledon behalf of the parties the learned Judge of the High Court exercisingadmiralty jurisdiction answered issues 2 to 7, 10, 11 (a) (b) and (c)and 12 in the affirmative. In respect of issue 1 which was "Did theplaintiff purchase a quantity of 1,440 metric tons of lentils C and Ffrom the Middle East Soil Products Corporation of Beyrouth the learnedtrial Judge having answered it in the affirmative Came to a findingthat there was no evidence to establish the weight of the lentils. Issue8 was answered in the negative. The learned trial Judge held thatthe survey did not establish that there was a total shortfall in weightof 76,030.10 kilograms of lentils as against the invoiced weight.Answering issues 13 and 15 the trial Judge held that the plaintiff wasentitled to damages in a sum of Rs. 23,238.00 only.
In this appeal the plaintiff-appellant seeks to have that part of thejudgment of the learned trial Judge where he has held that the weightof the lentils has not been established by evidence in answer to issues1 and 12 set aside.
The certificates of weight quality and packing in respect of the16,400 and 12,400 bags of Turkish red split lentils marked P11 andP12 were admitted in evidence subject to proof through the chairmanof the plaintiff's company when giving evidence (vide pgs. 57 and 59of the proceedings).
It was submitted by learned President's Counsel for the plaintiff-appellant that the learned trial Judge had misdirected himself in lawin calling for the strict proof of documents P11 and P12 and in rejectingthem on the ground that the makers of the documents and those whoparticipated in the weighing of the consignment were not called.
It was the contention of learned counsel on behalf of the plaintiff-appellant that the documents P11 and P12 were receivable in evidenceand was prima facie evidence of their contents. We are of the viewthat his contention would be correct if these documents were admitted.But in the instant case the respondent objected to these documentsbeing admitted and insisted that they be proved.
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P. B. Umbichy Limited v. “MV Mosceince“ and
Jugolinija Rijeka Yugoslavia (Gunasekera, J.)
297
Section 32 (2) of the Evidence Ordinance makes statements writtendr verbal made by persons of relevant facts admissible for itsstates:
"that such statements are relevant when the statement wasmade by such persons in the ordinary course of business and inparticular when it consists of any entry or memorandum madeby him in books in the ordinary course of business or in thedischarge of professional duty or of documents used in commercewritten or signed by him".
Learned counsel for the appellant submitted that P11 and P12 havebeen issued from S. G. S. Geneva and are commercially acceptedand are acted upon by parties the world over whether it be banksor strangers to. a contract between a buyer and a seller as it formsthe life blood of international commerce and provides in the absenceof any proof of fraud or deceit prima facie evidence and proof of whatis stated therein and contended that the only conditions of admissibilityunder this section is either that it is unreasonable to expect the makersto have been called on account of the delay and expenses and itmust be a document used in commerce and that both these conditionswere satisfied. We are unable to agree with this submission of learnedPresident's Counsel. In our view section 32 (2) deals with only therelevancy of such documents. These documents have been objectedto by the defendants and were marked subject to proof and thereforethe burden of proving them according to law was on the plaintiff.
Section 61 of the Evidence Ordinance states that the contents ofdocuments may be proved either by primary or by secondary evidence.Primary evidence according to section 62 means the document itselfproduced for the inspection of the court and when documents P11and P12 were admitted subject to proof the burden clearly restedon the plaintiff to prove the said documents by calling its maker.
In cross-examination the chairman of the plaintiff company Mr.Shanmugam admitted that he cannot say from his personal knowledgethat each bag contained 50 kilograms and went on to say that hewas relying on the S. G. S. certificates P11 and P12 but was unableto identify signatures appearing on them.
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Sri Lanka Law Reports
(1998) 2 Sri LR.
The learned trial-Judge in his judgment observed as follows: Theplaintiff among other documents produced in this case produced P11,P11(a), P12 and P12(a) the certificates of weight, quality and packingdated 4.3.85 and 5.5:85 issued by S. G. S. Geneva. These documentswere allowed to be produced subject to proof. These documents werevital and proof of these documents were imperative to establish theplaintiff's claim. The documents P11 and P12 contained the legend“that on instructions received our inspectors proceeded to the followingoperations at Iskenderum weighing effected under our control with thefollowing result: 16,400 bags Turkish red split lentils 820,000 kilogramsgross per nett".
The documents P12 and P12 (a) contain, the same legend exceptthe quantity to be 12,400 bags of Turkish red split lentils 620,000gross per nett.
It is my considered view, in view of the denial in the answer andthe calling for strict proof of the quantity and weight of the consignmentand also in view of the fact that the documents were admitted subjectto proof it was essential and imperative that the plaintiff should haveproved the documents. This was further necessary in view of theprinted conditions iri the Bills of Lading A1 and A2, P5 and P6; onthe face of the Bills of Lading the words STW is typed which means“said to weigh". In addition to the above words it is printed on theBills of Lading "weight, measure, marks, numbers, quality, contentsand value if mentioned in the Bill of Lading are to be consideredunknown unless the contrary has been expressly, acknowledged andagreed to. The signing of the Bill of Lading is hot to be consideredas such an agreement". Since the plaintiff was aware. of the existenceof A1 and A2 at the time of, filing his affidavit to. lead warrant forarrest the plaintiff should and it was essential that he should haveproved P11 and P12 to establish his claim and should have calledthe makers who participated in the weighing of the consignment.
We see no reason to interfere with this finding of the learned trialJudge and accordingly we dismiss this appeal. There will be no costs.
J. A. N. DE SILVA, J. – I agree.
Appeal dismissed.