Holland Colombo Trading Society, Ltd. V. Alawdeen

[PRIVY COUNCIL]

1954 Present: Lord Asquith of Bishopstone, Lord Keith of Avonholm and
Mr. L. M. D. de Silva

HOLLAND COLOMBO TRADING SOCIETY, LTD.
Appellant, and S. M. K. ALAWDEEN et al., Respondents

PRIVY COUNCIL APPEAL NO. 30 OF 1953

S. C. 311-D. C. Colombo, 20,182

Contract-Sale of goods-C. I. F.-Bill of lading-Tender of goods-Tender of documents
.
(i) Although a written contract for the sale of textile goods cited, on the face of it, a price in terms " c.i.f. Colombo " and " Payment " was expressed to be by " Cash against documents ", Clause I diverged sharply from the typical c.i.f. terms in so far as it provided for " Payment to be made in cash on or before arrival of the goods .... Any tender or delivery of the goods, or of the bill of lading or of such delivery order or other document or documents as will enable the buyers to obtain possession of the goods shall in every case constitute a valid tender or delivery ". Clause 4 stated, inter alia, that " Notwithstanding that the price of the goods may be expressed to be fixed on c.i.f. or equivalent terms, the buyers shall not be entitled to demand nor shall the sellers be bound to tender or deliver to the buyers any insurance policy, bill of lading invoice or other document or documents whatsoever but any such tender or delivery as described in Clause 1 hereof shall be a good and valid tender or delivery ". Under Clause 2, on receiving notice of the arrival of the goods the buyers undertook to pay all landing or similar charges and remove the goods from the " ship or wharf or store " within two days, and presumably to pay the price which was payable " on " (if not paid before) arrival.

The sellers shipped the goods at Rotterdam on the s.s. " Laurenskerk " taking a bill of lading from its owners for the transit from Rotterdam to Colombo. The Bill of Lading provided, inter alia, that the carrier could, if he thought it necessary or expedient, arrange for the goods to be transhipped at any stage of the voyage under a fresh contract with the subsequent carrier. It purported to absolve the owners of " Laurenskerk " from all liability in respect of the goods if transhipped, as from the time of transhipment. It was also subject to the Hague Rules of October, 1923, " unless otherwise provided for in this Bill of Lading ".

Near Genoa, an explosion occurred on board the " Laurenskerk " and the goods were transhipped to the s.s. " Triport ". There was no evidence that there was a contract of carriage with the " Triport " or that the " Triport " issued bills of lading to the " Laurenskerk " or to anyone at all in respect of the goods transhipped into her. On arrival at Colombo the " Triport " did not wait for presentation of any document. She had the goods landed and placed in a customs warehouse at the Port, and departed. The buyers, however, refused to take delivery of the goods in spite of notice given to them by the sellers not only as soon as the " Triport " reached Colombo harbour but also when the goods had been placed in the customs warehouse. There was also evidence that, on February 26, 1948--shortly after the transhipment and before the " Triport " reached Colombo--and subsequently, the sellers demanded payment from the buyers against documents and that the tender of the documents was rejected by the buyers. In the circumstances the sellers instituted action

for damages for non-acceptance of the goods, and the issues, stated shortly 386 were (1) whether there was a valid tender by the sellers to the buyers of documents against which they were bound to pay the purchase price, or, alternatively (2) whether there was a

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