UK: Recent Authority Of Particular Relevance In The Fields Of International Trade And Transport: Liability Of Freight Forwarders

Last Updated: 11 May 2010
Article by Nevil Phillips

Originally published in International Trade and Transport Law Newsletter, September 2009

In Matrix Europe Ltd v Uniserve Northern Ltd [2009] EWHC 919 (Comm), HHJ Mackie QC (sitting as a judge of the Commercial Court) considered inter alia the question of the extent to which a freight forwarder may rely upon its standard trading conditions in circumstances where there is loss of or damage to goods delivered to and accepted by it in error.

Key facts

A shipper of goods, Matrix, contracted with a carrier, Birkart, to transport the goods from Matrix's premises near Manchester directly to Manchester Airport and then onwards, by air, to the receiver in Hong Kong. That contract was on the standard BIFA terms, Birkart being a member of BIFA.

The carriage of the goods from Matrix's premises to Manchester Airport was sub-contracted by Birkart to another carrier. That carrier in turn sub-contracted the carriage to a further carrier, a Mr. Lancashire.

In error, Mr. Lancashire failed to deliver the goods to Manchester Airport as required under the contract between Matrix and Birkart. Instead, and without actual or ostensible authority, he mistakenly delivered the goods to a warehouse operated by Uniserve Northern Limited ("UNL") late in the course of a Friday afternoon.

Birkart had, in the past, occasionally contracted with UNL for the purposes of warehousing goods in respect of which Birkart was the contractual carrier.

UNL accepted the goods into the warehouse without seeking any formal documentation from Mr. Lancashire unequivocally confirming the identity of the shipper, the identity of the head-carrier, or the intended destination or method of carriage for the goods.

Having accepted the goods into its warehouse without such formal documentation, UNL then sought identify the goods and establish what was required to be done with them and for whose account. UNL were unable to establish anything in this regard. Accordingly, the goods were left in the warehouse overnight.

During the night, the goods were stolen from the warehouse.

The claim

Matrix pursued UNL in bailment for the value of the goods.

UNL contended that it was not in breach of any duty owed in bailment. It also contended that any (sub-) bailment of the goods which it had undertaken was on the BIFA terms and that, accordingly, it was entitled to limit its liability in accordance with those terms in any event.

UNL in turn sought an indemnity from Birkart. UNL contended that the circumstances in which the goods had come to be delivered to it gave rise to a relationship between UNL and Birkart which was governed by the BIFA terms. UNL therefore contended that, if it (UNL) was found to owe any liability to Matrix, Birkart was liable to UNL under those terms (either pursuant to express indemnity provisions, or – if it was found that the bailment relationship between UNL and Matrix was not governed by the BIFA terms - on the basis of a breach of warranty of authority contained in the BIFA terms to the effect that Birkart was authorised by its customer – Matrix – to contract with UNL on the BIFA terms).

The issues

The principal issue (other than that as to whether UNL was in breach of any obligation as a bailee – a question which caused the Court to comment upon the ordinary obligations of a bailee [paras.47-50]) was as to whether UNL could establish that its possession and handling of the goods was, as regards Matrix and as regards Birkart, the subject of the BIFA terms.

In this regard, UNL advanced a number of contentions, to the effect that:

(i) It was the sub-bailee of the goods as regards Matrix and that such sub-bailment was on the BIFA terms on the basis that Matrix had consented to a sub-bailment on those terms [paras. 60 and 92-93].

(ii) There was an express agreement between UNL and Birkart to the effect that any delivery of goods to UNL on behalf of Birkart was to be on the BIFA terms, whether that delivery was intentional or in error [para. 80].

(iii) There was an implied agreement (and/or an implied term therein) to the effect that any such delivery of goods would be on the BIFA terms [paras. 81-91]. Such implication arose out of the fact that an earlier agreement to which Birkart, a different Uniserve company, and other companies were party was on the BIFA terms, alternatively out of an alleged previous course of dealing between UNL and Birkart on the BIFA terms, alternatively because the BIFA terms were alleged to be the standard trading conditions universally and invariably in use between freight forwarders who are BIFA members.

The judgment

HHJ Mackie QC rejected all of UNL's contentions, finding them to have been in breach of their obligations in bailment as regards Matrix (inter alia by virtue of their failure to seek some formal documentation or other confirmation as to the identity of the shipper, the identity of the head-carrier, or the intended destination or method of carriage for the goods), and concluding that their possession and handling of the goods was not governed by the BIFA terms whether as regards Matrix or Birkart.

Specifically, the Judge held:

(i) There could be no sub-bailment to UNL on the BIFA terms unless (a) Matrix had consented to such a sub-bailment and (b) those terms were contained in a sub-contract between Birkart and UNL which encompassed UNL's possession and handling of the goods.

(ii) Matrix had not consented to any sub-bailment of the goods to UNL, let alone one on the BIFA terms, in circumstances where it was an express term of the contract between Matrix and Birkart that the goods should be carried directly from Matrix's premises to Manchester Airport (with no warehousing in between).

(iii) Moreover, there was no contract between Birkart and UNL relating to UNL's possession and handling of the goods – the goods had been delivered to UNL by mistake and without any authority on the part of Birkart; there was no pre-existing general express agreement between Birkart and UNL relating to goods delivered in such circumstances (although such an agreement might conceivably be concluded in practice [para. 85]), nor any specific agreement arising in relation to the goods in question; the relationship of the parties in circumstances of mistaken delivery was amply regulated by the law of tort and bailment, and there was no need for any contract (let alone one on the BIFA terms) to be implied (see The Aramis [1989] 1 Lloyd's Rep 213).

(iv) Accordingly, and in the absence of any contract between Birkart and UNL relating to the mistaken delivery to and acceptance of the goods by UNL, there could be no sub-bailment on terms as between Matrix and Birkart.

(v) Nor, in such circumstances, could there be any claim for an indemnity or associated relief by UNL against Birkart – if there was no contract between those parties, there was no basis upon which the BIFA terms can have applied as between them to the delivery in question.

(vi) In any event, even if there had been a contract between Birkart and UNL in relation to the particular goods, there was no basis upon which the BIFA terms could be said to form part of such contract – there was no express agreement as to their incorporation; there was no need to imply those terms into any such agreement in circumstances where such agreement would function adequately without such terms; there was no previous course of dealing sufficient to lead to the incorporation of such terms; the BIFA terms, while they may be standard as between an international forwarder and its customer (i.e. the shipper or sender of the goods), are not standard as between a forwarder and its sub-contractor (agreements between such parties commonly being subject to other terms and conditions including CMR, the Warsaw Convention, RHA terms, NAWK terms, and others); accordingly, the BIFA terms would not be applicable by virtue of their being industry standard terms.

(vii) Accordingly, UNL was unable to limit or exclude its liability to Matrix, and was not entitled to any indemnity or associated relief from Birkart.

Insight & analysis

The case provides salutary guidance for forwarders who are in the habit of accepting goods into their possession without due notice or warning.

It demonstrates that the delivery and acceptance of goods handed over in error may, in the absence of a prior express agreement to the effect that such goods are nonetheless to be treated by the parties as being subject to the normal contractual terms between them, be outside the scope of any contract and may leave the forwarder with unlimited liability and no means of redress.

The decision therefore emphasises the importance of ensuring that:

(i) The standing contractual arrangements of forwarders with their forwarding and carrier partners should contemplate expressly the possibility of mistaken, unintended or erroneous deliveries.

(ii) Forwarders should endeavour to ensure that, when accepting goods, they should at the very least seek some formal documentation or other confirmation as to the identity of the shipper, the identity of the head-carrier, or the intended destination or method of carriage for the goods.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.