SHIPPING CORPORATION OF INDIA LTD. versus M/S. BHARAT EARTH MOVERS LTD. & ANR.

Citation: [2007] 12 S.C.R. 923 · Decided: 05-12-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Case Partly allowed

Judgment (excerpt)

SHIPPING CORPORATION OF INDIA LTD. 
A 
v. 
MIS. BHARAT EARTH MOVERS LTD. & ANR. 
DECEMBER 5, 2007 
[S.B. SINHA AND G.S. SINGHVI, JJ. ] 
B 
Maritime Law-Contract of carriage of goods by sea-From 
Japan to India-Consignment of 16 cases-Damage to consignment-
Suit, claiming damages, filed in India in respect of 2 cases only-Courts c 
below holding that Indian Law was applicable to the case and not 
Japanese law; and that claimant was entitled to damages higher than 
the maximum liability after calculating the same taking into 
consideration all the 16 cases-On appeal, held: Japanese law was 
>( 
applicable and not Indian Law-Liability of the defendant was limited D 
in respect of two cases only-Matter remitted for fresh consideration-
Carriage of Goods by Sea Act, 1925-s. 2-Japanese Carriage of 
Goods by Sea Act, 1992-Articles 1, 2 and 13-lnternational 
Convention for the Unification of Certain Rules of Law relating to Bills 
of Lading (Hague Rules)-Clauses 5 and 6. 
E 
' 
Appellant was owner of a fleet of vessels. A consignment 
' 
containing 16 packages was entrusted to appellant by respondent 
No. 1 for carriage thereof from Japan to India. On arrival of the 
consignment at the Port in India, five cases thereof were found in 
F 
-; 
damaged condition. The Respondent filed a suit for damages, against 
the appellant in respect of only two cases. Trial Court held the 
appellant liable for payment of damages on the ground that it was 
responsible for causing loss to the consignment as the same had 
" 
occurred when the cargo was in its charge. It held that respondent 
was entitled to damages higher than the maximum liability provided G 
for therein as the quantum of damages was to be calculated upon 
taking into consideration the weight of all 16 cases and not of2 cases 
alone. It further held that the contract was governed by Indian 
923 
H 
924 
SUPREME COURT REPORTS 
[2007] 12 S.C.R. 
A Carriage of Goods by Sea Act, 1925 and not by Japanese Carriage 
of Goods by Sea Act, 1992. In intra-court appeal, the Division Bench 
of High Court affirmed the order of trial court. 
In appeal to this Court, appellant contended that price of the 
B cargo having not been disclosed in the Bill of Lading, the liability of 
the appellant was confined only to the amount specified therein; and 
that Indian law was wrongly applied in the case. 
c 
Partly allowing the appeal and remitting the matter to the trial 
court, the Court 
HELD: 1.1. A bare perusal of Section 2 of the Indian Carriage 
of Goods by Sea Act, 1925, would clearly demonstrate that the same 
applies to the carriage of goods by sea in ships carrying goods from 
any port in India to any other port whether in or outside India which 
would mean that the Indian Act shall apply only when the carriage 
D of goods by sea in ships takes place from a port situate within India 
and not a port outside India. As the originating port is outside India, 
Section 2 of the Indian Act, will have no application. The Japanese 
Carriage of Goods by Sea Act, 1992 on the other hand, applies in a 
situation where carriage of goods by a ship is either from a loading 
E Port or to a discharging Port, either of which is located outside 
Japan. Therefore, Japanese Act will clearly be applicable in the 
instant case. (Para 17] (931-D-E] 
1.2. The High Court, applied the provisions of the Indian law. 
F Clause 6 of the Bill of Lading merely raises a legal fiction. It applies 
to a case where the place of occurrence of loss or damage is not 
known. It merely provides that in such an event the quantum ofloss 
shall not exceed the monetary limit provided for in any international 
convention or national law. No reason has been assigned in support 
G of its findings by the High Court. Clause 7 oflnternational Covention 
for the Unification of Certain Rules of Law relating to Bills of Lading 
(Hague Rules) also should be read with Clause 6 thereof. 
[Para 17) [931-F-H) 
2.1. The approach of the High Court that the plaintiff-
H 
' 
·-
SHIPPINGCORPORATIONOFINDIALTD. v. M/S. 
925 
BHARATEARTHMOVERSLTD. 
respondent was entitled to damages higher than the maximum A 
liability provided for therein as the quantum of damages was to be 
calculated upon taking into consideration the weight of all the 16 
cases and not only of two cases, is wrong. If the plaintiff -respondent 
confined its claim of damages only for two cases, there was nu room 
for making the observation that the liability must be calculated taking B 
in

Excerpt shown. Read the full judgment & AI analysis in Lexace.