Chapter 76

Tenth Edition (2017)

Claims relating to Cargo

The Admiralty jurisdiction of the High Court in respect of cargo claims and contracts of affreightment is statutory. The High Court has Admiralty jurisdiction over any claim arising out of an agreement relating to the use or hire of a ship; or relating to the carriage of goods in a ship; or tort in respect of goods carried in a ship, unless it is shown (a) to the Court that at the time of the institution of the proceedings any owner or any part owner of the ship was domiciled in England (b) Jurisdiction in relation to the carriage of goods was first acquired by the Admiralty Court under the Admiralty Court Act, 1861 (c) The Act of 1861 gave jurisdiction to the Court over claims by the owner, consignee or assignee of the bill of lading of any goods carried by a ship into any port in England or Wales for damage caused by negligence or for any breach of contract or breach of duty, unless at the institution of the cause the owner or part owner of the ship was domiciled in England or Wales. The jurisdiction which the Court now exercises has thus been extended to include claims which, notwithstanding the liberal interpretation which the Act of 1861 received could not have been entertained under the earlier statute. Under the Act of 1861 the right to bring an Admiralty action was limited to owners of cargo, but now there appears to be no reason why a ship-owner, provided that he is not domiciled in England, should not bring an Admiralty action against cargo owners, although the latter are domiciled in England; to this extent the Judicature Act, 1925, has put the foreign owner in a superior position to the English owner. The only express limitation upon this exercise of jurisdiction in rem in claims relating to the carriage of goods is now the proviso that no owner or part owner of the ship shall on the institution of the suit be domiciled in England. Under the Act of 1861 it was held that "owner" meant the owner at the time when the cause of action arose, and that the word "domiciled" is to be understood in its strict legal sense. It was also held that the claim must be in respect of goods actually shipped on board the vessel which is made subject to proceedings in rem. It is submitted that the Act of 1925 must be read subject to the same limitation, and that proceedings in rem under sect.22 (1) (a) (xii) can only be instituted against the ship in which such goods have actually been carried. Upon the same principle it would seem that a claim relating to the use or hire of any ship is only capable of being enforced against the ship to which such agreement relates. The language of the section does not, however, expressly impose any such limitation, but leaves a plaintiff free to enforce in proceedings in rem a claim relating to an agreement for the hire of a ship, or carriage of goods in a ship, against a ship other than that to which the agreement relates or in which the goods were carried, belonging to the same owner.

The jurisdiction is, however, no longer confined to claims relating to goods "carried into any port in England or Wales in any ship". This limitation, which was imposed by the Act of 1861 has not been re-enacted. The numerous cases which were decided upon this part of the earlier statute are, therefore, no longer relevant. Under the Act of 1861 it was also held that the jurisdiction was confined to cases where the breach of duty or breach of contract was in relation to the goods and connected with damage to them. The language of the Act of 1925 appears to be sufficiently comprehensive to include claims in respect of any breach of contract for the use or hire of a ship. The right to proceed is no longer confined to the owner, consignee or assignee of the bill of lading, as was the case in the Act of 1861; and therefore it would seem that the limitation of the jurisdiction to claims where actual damage to goods has been sustained, or a breach of contract taken place in relation to them, which the Courts held to be a consequence of the restriction under the Act of 1861 of the right to sue to parties interested in the goods, has been abandoned in the Act of 1925.

The jurisdiction in personam has been further extended by the Administration of Justice Act, 1928, by which all jurisdiction vested in the High Court by the Judicature Act, 1925, is declared to belong to all Divisions of the High Court alike. This amendment of the principal Act was rendered necessary by the decision of the Court of Appeal in The Sheaf Brook (l), where it was held that a claim in personam by cargo owners against the owners of the carrying ship who were domiciled in England was not within the jurisdiction of the Admiralty Division. Any action in personam may now be brought in the Admiralty Division. The jurisdiction in actions in rem has not, however, been affected in respect of cargo claims or relating to the use or hire of a ship. There is, therefore, no jurisdiction to entertain an action in rem in which the owner of the ship, whether plaintiff or defendant, is domiciled in England. The remedy applies to foreign ships as well as to British ships, its objects being to give a practicable remedy, where formerly in the great majority of cases there was no available process in consequence of the shipowner being out of the jurisdiction. "Many foreign ships" said Dr. Lushington, "came into this country, and did not deliver the goods according to the bill of lading. The owners and consignees of cargo then suffered great loss, and had no practicable remedy; for though the shipowner, if in England, might have been sued for breach of contract, in the very great majority of cases that remedy was wholly unavailable. It appears, too, that in some cases, if not nearly in all, the owner of a British ship carrying cargo to a foreign country was liable to have his ship there seized for any breach of his contract as carrier. To remedy the grievance I have mentioned and to establish a reciprocity with foreign merchants, the 6th section was inserted in the statute" .

As the remedy given by the statute depends upon the place where the owner of the ship is domiciled at the time of the institution of the suit, it is clear that it was not intended that a plaintiff having a claim under the section should have a maritime lien; for a maritime lien accrues from the instant of the circumstances creating it, and not from the date of the intervention of the Court. The claim of the plaintiff in cases of damage to cargo or breaches of contract therefore accrues only upon the institution of the suit, and is subject to claims subsisting on the ship at the time of the institution of the suit.

When a judgment is pronounced in favour of the plaintiff, the Court usually refers the damages to the registrar and merchants, whose duty it is to assess the damages according to the ordinary and recognized principles of the Common Law. Whilst the Court of Admiralty existed as a separate Court it had not jurisdiction to entertain by way of set-off a claim by the shipowner for freight improperly deducted, there being in our Admiralty law no set-off, in the strict sense of the term, save in the exceptional case of suits for mariners wages. But where there were cross claims, the Court would endeavour not to disturb any security which either party might have his demand without substituting an equivalent. And now, as in other Admiralty actions, the defendant, in cases of damage to cargo, may claim by way of counterclaim any relief which he could have claimed before the Judicature Act in any suit in any of the Courts consolidated in the High Court of Justice.
BCAS: 7103-1001