"THE STARSIN" in the aisle of law archive


LAW PROFESSORS'  JUDGMENTS ON THE JUDGMENT
 
 
In the judgment of the US-based Law Professor Neal Millard The Starsin a Throw Back Judgment

Writing for LC VIEWS, Neal Millard says The Starsin  case is interesting because it seems to go back into time when when court cases were decided upon the most esoteric of points.  Law has progressed today to where the dotting of i's and the crossing of t's are not as important as the intent of the parties and the public policies applicable to the issues.  The Starsin case, despite having been decided in 2001, is almost a throwback to those earlier days.  
 
The fact of the matter is that a shipment of timber and plywood was damaged.  The courts vacillated in trying to determine whether liability attached to the charterer or to the ship-owners with whom the contract of carriage was entered.
 
The courts had all kinds of trouble with this and there were split decisions at each level of appeal.  The trial judge went so far as to divide the bills of lading into three groups based upon wording contained in the bills of lading.  This then launches the bankers to look into the issue of what appears on the face of a bill of lading compared to what appears on the reverse of a bill of lading.  This harkens back to the days when the doctrine of strict compliance governed the interpretation of letters of credit.  These days, courts tend to interpret letters of credit in the context of substantial compliance which is more in keeping with common sense and a concept of justice.
 
While it makes sense that an issuer of a letter of credit should have minimal duties when examining a bill of lading (and that would exclude the duty of reading the reverse of the bill of lading for its terms and conditions), it does not make sense that a court, in looking for liability for goods that were shipped, should get caught up in the argument.  If this was a negligence case, the court's inquiry should be, if the goods were clearly damaged in transit due to negligence, who was in control of the goods at the time they were damaged.  The case seems to say it was the charterer and once that is established, then the court simply needs to ask, where there any other parties legally liable as well, either by contributory negligence or by contract.  I might add, it matters not who was deemed the carrier on the bill of ladings if the issue is negligence, but only who was the actually control of the goods at the time of damage.  Of course, if this is a contractual case or one that is to be interpreted based on a law, then each contract must be reviewed as must applicable law.  But here, my reading of the case seems to indicate that the courts got caught up in making a determination based upon imprecise documents which could have been avoided by making a factual determination as to whom the carrier really was.  It is generally not difficult to determine whether a vessel was under charter and documents, if inconsistent with the actual facts, are usually disregarded.
 
Thus, what is needed to determine liability for damaged goods in transit is not at all related to the issues needed to determine whether a entity is a carrier for purposes of a bill of lading submitted as part of the documentation needed to draw on a letter of credit.  But note, while different, they do have one thing in common: the determination of carrier in both cases is mostly irrelevant.  In the case of determining liability for negligence, the issue is to figure out the party guilty of the negligence.  The carrier only becomes relevant if there is contractual liability as well.  Then it is important, as the case points out, to determine who is the charterer and who is the ship-owner since, under maritime law, these parties may also have liability.  But the threshold inquiry is based on fact, not interpretations of contract.  Similarly, in letter of credit law, the issue is not so much who is the carrier but what the bill of lading must show to comply with the documentary requirements of the letter of credit.  It does not matter if the bill of lading correctly names the carrier, just so long as the carrier named is the one that is supposed to be named the carrier under the terms of the letter of credit.
 
 
In the Judgment of Canada-based Law Professor William Tetley The Starsin a disputable way of dispute handling 
 
Commenting on the judgment of the House of Lords in The Journal of Maritime Law and Commerce, Vol. 35; 2004 (pp 121-139), William Tetley, Canada-based law professor, says: "The Starsin raises two matters that have been troubling me most for years: I) the failure of counsel and the courts, in this case and in many others, to consider foreign law, and ii) the emerging trend of interpreting international law in a national manner." However, he hopes that in the next demise clause/identity of carrier clause case the House of Lords will recognize whether the shipowner and the charterer are together the carrier, will recognize the international character of the Hague/Visby Rules and decisions of the courts of other nations on the question, and will apply international rules, as well as English common law rules, of interpretation of bills of lading.
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Earlier published in LC VIEWS newsletter No. 47, May 2006

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