cma cgm tanzania ltd vs am steel iron mills ltd 2015 tzhccomd 9 20 may 2015

IN THE HIGH COURT OF TANZANIA (COMMERCIAL DIVISION) AT OAR ES SALAAM COMMERCIAL CASE NO.2 OF 2014 CMA CGM (TANZANIA) LTO PLAINTIFF VERSUS AM STEEL & IRON MILLS LTO DEFENDANT 8th April & 20th May, 2015 JUDGMENT MWAMBEGELE, J.: This suit arises out of a contract of carriage by sea by and between the plaintiff and the defendant. Although it is not expressly stated in the plaint, it appears from the pleadings and testimonies of witnesses that CMA CGM (Tanzania) Ltd; the plaintiff was a carrier whereas AM Steel & Iron Mills Ltd; the defendant was a shipper. The story has it that the consignment in question was 48 containers of sunflower oil seed cake en route to Nhava Sheva in India vide Khor Fakkan Port aboard MV E. R Perth. Since the plaint does not tell it all in precise and detailed manner, I have gathered the background and surrounding circumstances leading to the cause of action from pleadings as well as testimonies of witnesses and documents tendered as exhibits in the course of hearing. The events leading to the cause of action can be recited as follows: on 28.12.2012 at around 0955 hours (Bombay Local Time) while MV E. R Perth at the outer anchorage area Nhava Sheva Port, smoke was spotted on the defendant's Container No. CRXU1591325. The fire, so the plaintiff asserts, was fought until at 1342 hours. After the fire was contained, the vessel had to wait for clearance into the port. On 04.01.2013 while the said MV E. R Perth awaiting clearance, once again, one of the defendant's containers, this time Container No. CNCU1517103 was seen emitting smoke suggesting its contents were on fire which was also allegedly fought until no more sign of it was seen. The plaint has it that due to such fires, the ship could not enter the port on 29.12.2012 until 07.01.2013, as a result of which a total of 8.9 charter time at a cost of USD 6,417.25 per day amounting to USD 57,220.69 was lost. Also, it is stated that 77 Metric tons of fuel at USD 44,679.00 was lost due to such delay to anchor, whereby in total, USD 101,900.69 was incurred as loss. For this, the Plaintiff mounted this suit praying for judgment and decree as follows: a) The court be pleased to declare that the defendant has breached the contract of carriage of its goods and the Defendant pay the 2 plaintiff the loss of United states Dollars One Hundred and One Thousand Nine Hundred and Seventeen and Sixty Nine Cents only (USD 101,900.69); b) That the defendant pays the plaintiff commercial interests at 3% per month from 07.01.2013 to the filing date of this suit; c) That the defendant pays the plaintiff interest amount at court's rate from the date of judgment until the decree is satisfied in full; d) That the defendant pay the plaintiff United states Dollars Twenty Thousands (USD 20,000.00) as general damages; e) The defendant pays the costs and incidentals to this suit; and f) Any other relief that the defendant may pay to the plaintiff as the honourable court may deem fit and just to grant. The defendant, through its Written Statement of Defence, denied the entire claim, putting in the main that there was no fire at all in the cargoes, but smoke which was cleared in some few minutes, that the smoke was not the reasons for the ship's delay to enter the port, and that even if there were costs the same were incurred by a third party, that all items in the cargo were inspected by the plaintiff at the time of handing the shipment and under-declaration of dangerous goods was meaningless. I note from the record of the scheduling order made on 03.03.2014 that the plaintiff was to field a total of two witnesses whereas the defendant had indicated to procure four of them. I further note that in compliance 3 with the court's order made at the last pre-trial conference on 10.04.2014, the plaintiff's counsel filed the proposed issues, to which the defendant's counsel agreed as can be gathered from his final submissions. I will therefore proceed to adopt those issues upon which hearing of the parties and adducing of evidence was conducted on the 13.10.2014 before his Lordship Nyangarika J. and on the 08.04.2015 before me. The agreed issues were: (i) Whether the defendant breached the contract of carriage of goods from DSMto Nhava Sheva; (ii) Did the defendant's goods cause fire on board the ship MV E.R Perth? (iii) What remedies are the parties entitled to? Before I delve into those issues, I deem it apposite here to recount, albeit briefly, what the witnesses from both sides had to say and documentary evidence to corroborate their testimonies. This course will, in my considered opinion, ease my task by injecting light on possible answers to the issues. For the plaintiff, as already alluded to above, despite an indication to call four witnesses in support of its case, only one witness; namely, Hassan Mtengo (herein PW) was fielded. Through his statements 4 adopted in this court in lieu of his testimony in chief and marked as PWS1, he introduced himself as an Export Documentation Executive at the plaintiff company since 2008 who professes in shipping business. Among his duties, stated PW, are to issue shipping orders, Bill of Lading and invoices to clients. He went on to state that having received a booking application from the plaintiff's Clearing and Forwarding Agent (CFA) for exporting sunflower oil seed cake without indication of its being a dangerous cargo, he issued him a shipping order and was informed by Tanzania International Container Terminal Services (TICTS) that the said agent had completed its duties whereafter a total of 48 containers containing plaintiff's cargo were loaded aboard MV. Sea Boxer. Then he stated that, on 25.11.2012 he issued to the plaintiff a Bill of Lading for the 48 containers among which were the containers with Nos. CRX41591328 and CNCU15171103 for the voyage from Dar es salaam Port to Nhava Sheva with transshipment at Khort Fakkan at Dubai in the United Arab Emirates. Thereafter, he tendered a total of three documents namely Booking Application, Original Shipping Order which were received in evidence and marked as exhibits P1 and P2 respectively as well as three sets of Draft Bills of Lading which were also received in evidence and marked as exhibit P3 (a),(b),and (c). 5 On cross examination, he stated that normally a shipping order is issued after a client has filled a Booking Application Form. He went on to say that a Bill of Ladding is prepared by the shipping line on the basis of the information on the shipping order or upon instruction as issued by the client and after verifying to their satisfaction on the correctness of the cargo, whereafter the container is sealed by the same shipper in the presence of the customer. He went on to state that the defendant's cargo comprised 48 containers of sunflower oil seed cake with 11% and 8% minimum contact. As to the source of the information on the nature of cargo being dangerous, he stated that they were so informed by their agent in India upon receipt of the burnt cargo. It was his averment that the information as to the delay of the ship to anchor at Nhava Sheva were also supplied by their agent in India, and further that it was the same agents who could verify the total amount of money claimed as being lost due to the delay. On re-examination, it was his testimony that they had prepared the shipping order and Bill of Lading upon the instructions issued by the defendant and further that there were no further instructions apart from what he stated in court. As for the defendant only two witnesses, out of the intended four, were fielded. The first to testify was Sheikh Shahid Majid DWl. Through his statement admitted in lieu of examination in chief and marked DWS1, he introduced himself as the Managing Director of the defendant 6 company since 2007 whose main activities were administration of the Company and seeking for external markets of the company products. He stated that the defendant is a limited liability company licensed as iron factory and exporter of sunflower oil seed cake and some local products to India and other countries. He told this court that having received an order for 48 containers of sunflower oil seed cake from one of their customers in India sometimes in 2012, he approached the plaintiff for transportation of the same. He went on to say that packaging having been completed the cargo was handed to the shipper who in turn issued a Bill of Lading indicating date of voyage, name and contents of the items in the container. It was his further averment that sometimes in January 2013, they were informed by their client that the Cargo supplied had been received without any complaints as to delay or missing container. It was his testimony that there was no any condition of Bill of Lading which was breached or any hidden item and that the plaintiff inspected the cargo before closing and sealing the container. On cross examination he told this court that it was J. M. Kambi who dealt with documentation and he was informed about the fire one year after the event. He said that the cargo had arrived safely because they received the money from their client and that there were no complaints from the buyer. 7 The second witness in the line-up was one Waqar-UI-Malik. He testified as DW2. His statement was adopted and taken as his evidence in chief and marked as DWS2. Therein, he states that he is the General Manager Finance and Trade of the defendant whose main activities are supervision and collection of export goods from local market as well as supervision of processing and exportation of cargo to their clients. He stated that in 2012 they had 48 containers of sunflower oil seed cake for transportation to their client in India. He stated further that they approached the plaintiff who availed the numbers of empty containers whereafter packing the said sunflower oil seed cake, the shipper inspected the cargo items, supervised the closing of the containers and sealed them. He went on to state that after packing and stuffing they were instructed by the plaintiff to take the cargo to port for shipment whereafter the plaintiff issued a Bill of Lading which they sent to their client in India. Then sometimes in January, 2013, testified DW2, their client in India informed them that he had received the cargo on time and thereby effected payment without any delay. He told this court further that he was surprised to be informed in March, 2013 regarding smoke on the two of the containers which resulted into the delay of the ship to enter the port of Nhava Sheva and the additional costs. 8 Finally he stated that due to change of weather conditions sometimes smoke can rise in sunflower oil seed cake which is not dangerous and further that there was nothing hidden to the shipper since the Bill of Lading clearly stated the contents of cargo and shipper and inspected the goods before sealing the containers. On cross-examination, he testified that he knew the sunflower oil seed cake not to be dangerous goods and further that he was not aware of any transportation code. He went on to state that he received information regarding the fire in March, 2013 whereby he responded that it was not their consignment because they had already received the proceeds from their client without any complaint. On re-examination it was his testimony that had there been dangerous goods, the plaintiff's representatives would not have accepted the cargo. He went on to say that the sunflower oil seed cake does not create fire but smoke. He testified that they received the proceeds of goods they sold in January. That is all as regards the testimonies of the witnesses. I have also noted with appreciation the closing submissions filed by both learned counsel. I must admit though that little assistance, if at all, is acclaimed thereto. That notwithstanding, they are commendable for dutifully observing the filing schedule. 9 I will now turn to the issues for determination. I choose to deal with them in the order of their appearance. The first issue, as framed, is whether the defendant breached the contract of carriage of goods from Dar es Salaam to Nhava Sheva. Apparently there was nothing to indicate the contract of carriage of goods save for the Bill of Lading which has not been disputed by the parties. Therefore, I deem this to be their contract upon which their relationship was based. My stance is based on the definition of the term "Bill of Lading" as provided by Black's Law Dictionary (Abridged Seventh Edition) by Bryan A. Garner, Editor in Chief. It defines the term at page 129 as: " a document of title acknowledging the receipt of goods by a carrier or by the shipper's agent; a document that indicates the receipt of goods for shipment and that is issued by a person engaged in the business of transporting or forwarding of goods". As the present transaction is also controlled by international norms and customs in business, in fortification of the foregoing, I wish to borrow another definition of the term in the United Nations Convention on the Carriage of Goods by Sea done at Hamburg, Germany on the 10 31.03.1978 (commonly referred to as the Hamburg Rules, 1978) to which Tanzania is a party. It defines the term as: " ... a document which evidences a contract of carriage by Sea and the taking over or loading of the goods by the carrier, and by which the carrier undertakes to deliver the goods against surrender of the document. A provision in the document that the goods are to be delivered to the order of a named person, or to bearer, constitutes such an undertaking". The rules governing such contracts of carriage by sea (Hamburg Rules Supra) places the duty of disclosure of dangerous goods on the part of the shipper (defendant in this case). This is gathered from article 13 (1); which is to the effect that: "if the shipper does not do so, and the carrier does not otherwise have actual knowledge of their dangerous character, then, the shipper will be liable to the carrier for the loss resulting from the shipment of such goods, and the goods may be at any time unloaded, destroyed or rendered innocuous, without payment of compensation, (Article 13 (2)". 11 These rules also provide further under article 16 (1) that: "If the bill of lading contains particulars concerning the general nature, leading marks, number of packages of pieces, weight or quantity of the goods which the carrier or other person issuing the bill of lading on his behalf know or has reasonable grounds to suspect do not accurately represent the goods actually taken over or, ... if he had no reasonable means of checking such particulars, the carrier or such other person must insert in the bill of lading a reservation specifying thee inaccuracies, grounds of suspicion or the absence of reasonable means of checking". If no such reservations are made on the Bill of Lading by the issuer he is deemed to have received the same in good condition and therefore proof to the contrary by the carrier or issuer of the bill will not be permitted [See article 16 (2) and (3) (b)]. For the avoidance of doubt I have borrowed from the foregoing international agreement to which Tanzania is a party just in buttressing 12 the point that the parties to this suit should have been fully aware of the international practice obtaining in the field. I am alive to the fact that Tanzania being a dualist state, once ratified, an international protocol or agreement does not automatically become part of the municipal laws. To be justiciable in our courts of law, the same must be enacted by the Parliament. However, the Hamburg Rules, as already said, are part of an international practice to which the parties to the present matter ought to have been conversant with. A Bill of Lading has three major functions as explained by Simone Schinitzer in his book titled Understanding International Trade Law, First Indian Reprint, Universal Publishers, at page 26: "The Bill of Lading has a number of functions in relation to the carriage contract. It is a receipt of goods. It evidences the contract of carriage and it is the document of title to the goods." My expectation which never materialized at all was to see the full terms and conditions therein which governed the conduct of the parties under that relationship. This, the plaintiff did not bother to do neither in the pleadings nor during the hearing. However, apparently, the blame by the plaintiff appears to be centred on the non-disclosure of the nature of the goods that the defendants had for exportation. 13 In the present case, it is not disputed that the plaintiff issued the Bill of Lading. However, he alleges that the defendant never disclosed the nature of the goods to be transported. On the other hand the defendants deny the allegation that the goods were dangerous and further that the plaintiff had inspected the same. In the circumstances, assuming that the sunflower oil seed cake was indeed dangerous, the immediate question to be asked is, on whose shoulder does the onus probandi lie as to the dangerousness of the goods? In my considered opinion, the burden lies on the plaintiff for it is through discharge thereof that he can embark on proof of breach of contract. I say so because discharge of such burden is not sufficient per se but also proof of non-disclosure by the defendant in terms of the international custom and practice as provided for by the Hamburg Rules (supra). My stance here is fortified, by the observations of the U.S Court of Appeals for the Fifth Circuit in the case of Steel Coils,Inc. Vs M/V Lake Marion et al, (2003 AMC 1408) as quoted at www.comitemaritime.orgithe -1924 Bills-of-Lading-conversation-and-its- 1968-and-1979-Protocals-Hague-visby Rules/0,2799,199932,00.htm#burden. I will reproduce the relevant part of this persuasive decision as hereunder: "... Initially the plaintiff must establish a prima facie case by demonstrating that the cargo 14 was loaded in an undamaged condition and discharged in damaged condition and for the purpose of determining the condition of the goods at the time of receipt by the carrier, the bill of lading serves as a prima facie evidence that the goods were loaded in the condition described therein .:" I am aware that the goods can be received in good condition though inherently dangerous. This however, on the basis of traditional mercantile practice and in the light of the persuasive decision in the Steel Coils Inc. case (Supra), must be proved by the plaintiff. This, also, is what is generally required of the plaintiff by and under the principle of he who alleges must prove, which principle is embodied in section 110 of the Evidence Act, Cap. 6 of the Revised Edition, 2002. In the instant case, apart from mere allegations that the goods were dangerous, the plaintiff has not tendered anything concrete to prove such allegation. Prudence would require that things like laboratory reports as to the chemical composition or otherwise of the said goods must have been tendered to establish the nature of that goods. This could describe matters pertaining to the nature of the goods, storage and package requirements as well as whether extra care in handling the goods was required. 15 Furthermore, reason dictates and logic confirms, that upon occurrence of fire and any damage, if any, an assessment or survey should have been conducted to establish the source of the smoke and the alleged fire. This, certainly, would have revealed that the goods were inherently dangerous, if at all, and as such the plaintiff would have discharged the first part of the burden placed upon him by the international practice and laws. To the contrary, when PW was asked as to how he came to be aware of the incidents, he said that they were so informed by their agent in India. Nothing from the said agent in that regard was tendered in evidence. Neither were the details as to his name, location, business, et cetera, disclosed in court. And to canvass the point a little bit further, assuming that all the foregoing was impossible or difficult to perform, none of the crew members who were aboard and or on duty who attended to the said fires were procured in court. Neither did the plaintiff bother to have the Ship Master or at least his report of the event to support the allegations of occurrence of smoke and fire on the defendant's containers. That apart, no port authority personnel was procured to testify as to either occurrence of the event or at least the duration the ship was anchored at outer area of Nhava Sheva port, and neither did the crew come to testify to that fact. All what PW could say was that the one who could verify the event and the loss was their agent in India who, as I have intimated, remains imaginary to the Court. 16 The foregoing notwithstanding, the plaintiff does not dispute to have had inspected the cargo before loading and issued a corresponding Bill of Lading, and neither did he controvert the fact that the said goods were actually received by the consignee in good order and complete. As if that is not enough, no caveat or reservations as to the nature or condition of the goods were entered on the said Bill of Lading [exhibits P3 (a), (b) and (c)] and neither did the plaintiff indicate any circumstance that precluded him or denied him opportunity of checking the same. Apparently therefore on the basis of the practice governing contracts of this nature as alluded to herein earlier, the plaintiff is precluded from proving the contrary at this stage. The net result of the above analysis goes to answer the first issue in the negative; the defendant did not breach the contract of carriage of goods from DSM to Nhava Sheva. I am further fortified by the same analysis to answer the second issue in the negative as well. However, without prejudice to the said analysis, in regard to the second issue, I wish to add that nothing concrete has been tendered in court that tends to establish at least on the preponderance of probabilities the fact that it was the goods that caused smoke and fire on the said containers. Rather, what the plaintiff has brought to this court are mere statements in the amended plaint to the effect that "smoke was spotted coming from the defendant's container and ... the fire was fought until ... no more signs of the fire 17 were spotted" in paragraph 7 of the amended plaint and \\... another defendant's container was seen emitting smoke as its contents were on fire, which was fought until ... no more signs of fire were spotted ..." in paragraph 8 of the amended plaint. In my considered opinion which proceeds from pure logic, smoke and or fire being spotted on the container does not necessarily mean that the contents therein were the causative agent or source thereof. Otherwise, the plaintiff was required by the dictates of the law of evidence to show in certain terms that it was the contents that caused the smoke and/or fire. To the contrary, it was DW2 who stated without proof either in his testimony that indeed, due to change of weather, the sunflower oil seed cake can cause smoke but the same is not dangerous. Otherwise, nothing substantially in evidence could prevent any reasonable person from concluding that there was another source of the smoke or fire. This solidifies my finding in regard to the second issue. From the evidence adduced in support of the plaintiff's case, it cannot be said with certainty that the defendant's goods caused fire on board the ship MV E. R Perth. That is the reason why the second issue, like the first, is answered in the negative. Before moving to the last issue, wish to underline, at this juncture, just for clarity, that proof of a claim must be shown by documentary evidence to back up figures plucked in the claim to enable the court to assess the definite costs incurred as claimed in the case - see Masolele 18 General Agencies Vs African Inland Church Tanzania [1994] TLR 192, and Isaya Bukakiye Simon r/e Isaya Agrovet Vs Dickson Mbula & Grace James Msula, Commercial Case No. 10 of 2011 (Unreported). What the plaintiff has done in the case at hand is to bring to the fore mere words even in instances where documentary proof was available and more so without telling the court why such a shortfall. My flight having been smooth, I feel now comfortable and ready to have my soft landing as I tackle the last issue - to what reliefs are the parties entitled? The plaintiff had put up a total of five certain prayers and one uncertain prayer which may be awardable should this court deem fit. This issue will not detain me. Having answered the first and second issues in the negative, no relief sought cannot be allowed to sail through. The plaintiff has miserably failed to prove his case and the same is dismissed in its entirety with costs. Order accordingly. 19 -t