THE OWNERS OF CARGO LATELY LADEN ON BOARD THE SHIP "DONG DO" v. THE OWNERS AND/OR DEMISE CHARTERERS OF THE SHIPS "DONG DO", BA DINH" AND "HANOI 1"

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J U D G M E N T

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Power, J.A.:

1. The plaintiffs Mitsubishi Electric Corporation of Japan (hereinafter referred to as "the shippers"), brought an admiralty action in rem for damage to their cargo against the defendant/owners (hereinafter referred to as "the owners") of the ship "Dong Do". The action arose out of the shipment in early May of 1987 of three parcels of electrical machinery loaded onto the vessel "Dong Do" at Kobe in Japan for carriage to Hong Kong. The consignee was China Light and Power Company Limited. The goods were found on discharge to have been damaged. The "Dong Do", owned by the Hanoi Maritime Transportation Co., a Vietnamese shipping company, was voyage chartered by their agent the Seiwa Shipping Co., Ltd. to the Meishin Shipping Co., Ltd. (Meishin) pursuant to the terms of a Fixture Note dated 24th April 1987 which incorporated the terms and conditions of a Gencon charter party. The shipment was made under three bills of lading, numbered KH-2, KH-3 and KH-6. The forms are identical. They are headed "Meishin Line Bill of Lading". Photostat copies of these were before the court. On the left hand side of the face of the form are boxes for "Shipper", "Consignee", "Notify Party", "Ocean Vessel", "Port of Discharge", etc. The usual box is provided for the description of the goods and under it is a box for "Freight and Charges". KH-2 and KH-6 bear the stamp "AS ARRANGED" in this box and KH-3 bears the stamp "FREIGHT AS ARRANGED". In the box "Place and date of issue" appear the words "Tokyo, Japan" on each bill. Only KH-3 is dated "May-1 1987".

2. In the bottom left hand corner appear the words:

    "In accepting this Bill of Lading, the shipper, owner and consignee of the goods, and the holder of the Bill of Lading agree to be bound by all its stipulations, exceptions and conditions, whether written, stamped or printed, as fully as if they were all signed by such shipper, owner, consignee or holder, notwithstanding any local customs or privileges to the contrary and agree that this Bill of Lading supersedes all other agreements for the shipment of these goods.

    IN WITNESS WHEREOF, the Master or agent of the said ship has signed the number of Bill(s) of Lading stated above, all of this tenor and date, one of which being accomplished, the others to stand void."

The signature box in the bottom right hand corner is in the following form:

    "FOR MEISHIN SHIPPING CO., LTD.

By ................................. On behalf of Master"

Only KH-3 bore a signature which, it was common ground, was that of a senior employer of Meishin.

3. Copies of three Mate's Receipts corresponding substantially in form to the bills of lading were also before the court. Each is dated "Tokyo, Japan May 1, 1987". Each shows a freight rate of U.S.$25 per square metre. This is to be contrasted with the freight rate in the Fixture Note of US$8.50 per square metre F.I.O.S.T. Any difference, with costs deducted, would, of course, be Meishin's profit. The bills do not anywhere state the name of the owner.

4. Clauses 1 and 3 (the demise clause) on the reverse of the bill are of importance:

"1.    In this Bill of Lading the word 'ship' shall include any substituted vessel, and any craft, lighter or other means of conveyance owned, chartered or operated by the Carrier used in the performance of this contract; the word 'Carrier' shall include the ship, her owner, Master, operator, demise charterer, agent, and, if bound hereby, time charterer and any substituted carrier, whether the owner, operator, charterer, or Master shall be acting as carrier or bailee; the word 'shipper' shall include the person named as such in this Bill of Lading and the person for whose account the goods are shipped; the word 'consignee' shall include the holder of the Bill of Lading, properly endorsed, and the receiver and the owner of the goods; the word 'charges' shall include freight and all expenses and money obligations incurred and payable by the goods, shipper, consignee, or any of them."

"3.    The Carrier shall be entitled to the full benefit of, and right to, all limitations of, or exemptions from, liability authorized by any provisions of any country's law, statutes or regulations which may be pertinent. This shall include, but shall not be limited to, the full benefit of, and right to, all limitations of, or exemptions from, liability authorized by any provisions of sections 4281 to 4286 of the Revised Statutes of the United States and amendments thereto and of any other provisions of the laws of the United States. If the ship is not owned by, or chartered by demise to the company or line by whom this Bill of Lading is issued (as may be the case notwithstanding anything that appears to the contrary), this Bill of Lading shall take effect only as a contract with the owner or demise charterer, as the case may be, as principal made through the agency of the said company or line, who act as agents only and shall be under no personal liability whatsoever in respect thereof. If, however, it shall be adjudged that any other than the owner or demise charterer is carrier and/or bailee of the goods all limitations of and exemptions from liability provided by law or by the terms hereof shall be available to such other."

5. The shippers allege, in their Statement of Claim, dated 23rd November 1988, loss and/or damage to their electrical machinery sustained by reason of the owner's negligence and/or breach of duty as bailees in and about the loadings, storage care, custody, carriage, discharge and delivery thereof. The claim, made in bailment and/or negligence, does not rely upon any contractual relationship between the parties.

6. The owners, in their Defence and Counter-claim dated 28th December 1988, allege that the three bills of lading evidenced contracts of carriage with them as carrier.

7. It was common ground that Clause 17 of each Bill of Lading stipulated that the carrier would be discharged from all liability unless suit was brought within one year after the date on which the goods should have been delivered. The owners pleaded that the goods should have been delivered by 21st May 1987 at the latest and that, as the writ of summons was not issued until 11th July 1988, the claim was time-barred.

8. The shippers first Reply is dated 20th December 1988. An Amended Reply, which is the one with which we are concerned, was, it appears, served in the course of the hearing before Sears J. which commenced on 18th February 1991. It was in the following terms:

"1.    (1) Save insofar as the same consists of admissions, the Plaintiffs join issue with the Defendants on their defence herein.

        (2) Save where otherwise expressly indicated, references herein to numbered paragraphs are references to paragraphs in the Defence.

2.    By reason of Clause 26 of the said 3 bills of lading ("the bills of lading"), it was an express, alternatively implied, term that the proper law thereof was Japanese law.

3.    Further or alternatively, the proper law of the said contracts contained in or 'evidenced by the bills of lading was Japanese law, by reason, inter alia, of the fact that the same were each issued and signed in Tokyo, Japan, and of the reference to the incorporation of the provisions of the Japan International Carriage of Goods by Sea Act in Clause 2 of the bills of lading.

4.    By virtue of the provisions of Japanese law, hereinbelow particularised, as applied to the contracts of carriage contained in or evidenced by the bills of lading:-

(1) only the party named on the face of the bills of lading, namely Meishin Shipping Co. Ltd., is and was the carrier under the terms of the said contracts contained in or evidenced by the bills of lading;

(2) the Defendants are and were not a party to the said contracts and therefore are and were not subject to the liabilities and/or duties imposed by the bills of lading, and further, are and were not entitled to the benefit of any rights and/or immunities thereunder.

PARTICULARS

9. The Plaintiffs will rely upon the following provisions of Japanese law in support of the above:-

(1) by Article 20(1) of the Japanese Carriage of Goods by Sea Act, Article 759 of the Japanese Commercial Code, which rendered a shipowner solely liable to perform a contract of carriage entered into between a charterer and third party, was expressly excluded from application to international carriage of goods by sea;

(2) By Article 704 of the Japanese Commercial Code, where a lessee of a ship (including a voyage charterer) makes her available in navigation for the purpose of engaging in commercial transactions, he shall have the same rights and duties as the owner in connection with matters relating to the use of the ship;

(3) By Article 2(2) of the Japanese Carriage of Goods by Sea Act, only one of an owner, lessee or charterer of a ship is a carrier under a Bill of Lading;

    In the premises, the rights and duties of the Defendants, their servants and agents, were not defined in the contracts contained in or evidenced by the bills of lading and were not laid down by the Hague Rules, and accordingly paragraphs 7, 9 and 10(a) are denied.

5.   By reason of the matters aforesaid, neither the provisions of the bills of lading nor the Hague Rules are applicable or relevant to the Plaintiffs' claim herein against the Defendants, and in the premises:-

(1) it is denied that the Defendants are entitled to rely upon the Hague Rules as alleged in paragraph 15 or at all;

(2) it is denied that the action herein is time-barred as alleged in paragraph 18 or at all."

10. The hearing before Sears J. commenced on 18th February 1991 and occupied 7 days. The judge was satisfied that the owners were in each case a party to the Bill of Lading and that the claim was therefore time-barred.

11. He was satisfied that the real issue for his decision was whether the person who entered into the contract of carriage under the bills of lading was the owner or the charterer. In his judgment he stated that he was required to answer three questions, namely:

"Firstly, does Japanese law or Hong Kong law govern these bills of lading and their construction? Secondly, if Hong Kong law, are the shipowners parties to the contract of carriage evidenced by those bills of lading; and thirdly, if Japanese law, are the shipowners similarly parties."

As to the first question he was satisfied that the bills of lading were governed by and to be construed in accordance with Japanese law. No issue is taken before us as to the correctness of that finding. The judge went on:

"It is necessary, however, to examine the second question with regard to Hong Kong law which, as far as this case is concerned, is the same as English law. There is a rebuttable presumption that foreign law is the same as Hong Kong law, and as I have held that these bills are to be construed according to Japanese law, the plaintiffs have the burden of proving that Japanese law is different from Hong Kong law, were I to hold that applying Hong Kong law these bills are shipowners' bills."

12. The judge, having found that under Hong Kong the bills were shipowners bills, then went on:

"As I have held that applying Hong Kong law, this is a shipowner's bill, the burden of proof is on the plaintiffs to show that Japanese law would produce a result different from that of Hong Kong law."

There is no dispute that the judge was asked by the parties to adopt the approach set out above and was encouraged so to do by the way in which the action was conducted. While we find it understandable, in the circumstances, that he did so, we are satisfied that the approach was in error. Having decided that the applicable law was Japanese, the judge should have turned to determine whether such law had been proved to the satisfaction of the court. If so, his only task would have been to apply it. Only if Japanese law, or some aspect of it, was not proved would the court have been called upon to apply Hong Kong law acting upon the accepted approach that where foreign law cannot be ascertained, it must be taken to be the same as English law.

13. The judge, in the outcome, held that it had "not been proved to my satisfaction that Japanese law on demise clauses is different from English (Hong Kong) law" and that the bills, under Japanese law, were therefore, shipowners' bills. This followed because the judge's decision that the bills, judged by Hong Kong law, were shipowners' bills rested on the presence of the demise clause, which was accepted by both counsel, at least as far as this court was concerned, to be valid in our law. The submission had been that such clauses were not valid by Japanese law.

14. When making his determination as to the applicable Japanese law, he considered the oral evidence and the affidavits of Mr Nishiyama, who gave evidence on behalf of the shippers, and of Mr. Hiratsuka, who gave evidence on behalf of the owners. He was satisfied that Mr. Nishiyama was in error and accepted the evidence of Mr. Hiratsuka.

15. The primary submission of Mr. Michael Thomas, Q.C., who appeared with Mr. Joseph Fok for the plaintiffs, was that prior to the coming into existence of the bills of lading, there was an antecedent contract of carriage between Meishin and the shippers. He submitted, relying upon the evidence of Mr. Nishiyama, that Meishin was, under Japanese law, by virtue of this antecedent contract, the carrier. He relied also upon the unreported Hong Kong decision in The Griesheim (High Court Admiralty Jurisidction (No. 88 of 1978) and Court of Appeal (Civil Appeal No. 70 of 1983)) which held that by virtue of Art. 2(2) of the Japanese COGSA there can, in Japanese law, be only one carrier. He submitted that whatever the effect Cl. 3 (the demise clause) might have had if there had been no antecedent contract was immaterial as the identity as carrier was established by the antecedent contract.

16. Mr. Griffits, Q.C., who appeared with Mr. Smith for the owners, contended that it was not open to the shippers to argue for the existence of an antecedent contract in this appeal as no such contract was ever pleaded nor was it raised as an issue at trial. He submitted further that the Notice of Appeal raised no error on the part of the judge in this regard and that this was a new point of a kind which an appellant could not properly take upon appeal.

17. We turn firstly to the pleadings to ascertain whether the existence of an antecedent contract was raised therein. It was certainly not raised in the Statement of Claim which pleaded only that the shipment of the goods was "evidenced by three bills of lading Nos.KH-2, KH-3 and KH-6 dated 1st May 1987". There was no suggestion here of any antecedent contract. The defence, having admitted the shippers' plea that the shipments were evidenced by the three bills of lading, went on to plead, in para. 7, that "the said three bills of lading contain and/or evidence a contract of carriage with the owners as the contracting carrier" and in para. 8 pleaded the time bar in Cl.17 of the bills. This pleading, in terms, relied upon a contract of carriage between the shippers and the owners evidenced by the bills of lading.

18. The amended reply pleaded in Cl. 2 that by "reason of Cl. 26 of the said 3 bills of lading ...... the proper law thereof was Japanese law." Clause 3 pleaded that "the proper law of the said contracts contained in or evidenced by the bills of lading was Japanese law" (our emphasis) and, in Cl.4, that by virtue of this law, Meishin was "the carrier under the terms of the said contracts contained in or evidenced by the bills of lading" (our emphasis) and that the owners were not a party to the contracts and were not entitled to the benefit of any rights under the bills of lading. Mr. Thomas concedes that no antecedent contract was expressly pleaded but submits that nowhere did the shippers state that the bills of lading themselves constituted the contracts of carriage but simply pleaded that those contracts were "contained in or evidenced by the bills of lading".

19. Mr. Griffiths points out, referring to 18/12/5 of the White Book, that where an agreement is relied upon, the pleading should state the names of the parties to it whether it was made in writing, in the former case, stating by whom it was made and in the latter case identifying the document, and in all cases setting out the relevant terms relied on. It is conceded that no such particulars were pleaded.

20. Mr. Thomas submits that it was, nonetheless, as there was evidence before the court to establish the existence of such a contract, open to the shippers to contend both at the trial and before this court for the existence of an antecedent contract. He points particularly to:

(i) the notation upon the bills of lading which stated that freight has been prepaid "as arranged",

(ii) the three unsigned Mate's Receipts which stipulate a freight rate of US$25 per square metre and state "Freight pre-paid".

We think it surprising, indeed, that the shipper, if it was relying upon the existence of an antecedent contract, would have been content to rest its case upon evidence so slight. Clear evidence would have been available to the shipper as to the terms of any such contract but none was placed before the court. The failure to plead the antecedent contract might not have been of real moment if the matter had been squarely raised at the trial and had issue been clearly taken thereon. Mr. Thomas submits that the matter was squarely raised by Mr. Nishiyama in his first affidavit which was sworn on 26th November 1990, some three months before the hearing.

21. There can be no doubt that it was raised by Mr. Nishiyama. Indeed his approach, in very large part, relied upon the existence of an antecedent contract which, he argued, under Japanese law indelibly stamped the charterer with the character of carrier. The position he took is clearly shown in the following passage from his affidavit:

           "(c) Meishin Line undertook the Cariage

    At the cost of repetition, once again I quote Article 2, Paragraph 2 of the Japanese COGSA, which reads:

'In this law the term "carrier" means an owner, lessee or charterer of a ship who undertakes the carriage of goods specified in the proceeding Article.'

    In the present case Meishin Line is the one who undertook the carriage as reflected in the fact that it collected the freight from Mitsubishi Electric Corporation.

    Article 6, Paragraph 1 of the Japanese COGSA provides that: 'The carrier, master or agent of the carrier shall ... issue a bill of lading ...' and Article 2, Paragraph 2 of the Japanese COGSA provides that: '... "carrier" means an owner, lessee or a charterer of a ship who undertakes the carriage of goods ...'

    Thus, the logical conclusion from these two Articles is that the one who qualifies as carrier under Article 2, Paragraph 2 of the Japanese COGSA can, then, issue a bill of lading.

    I believe that my discussions on the 'Master's authority to issue bills of lading' are the key to the understanding of the foregoing conclusion.

    If we are to construe that the Master can, independently from the charterer, who undertook the carriage of goods, enter into a contract of carriage on behalf of the shipowner by issuing a bill of lading, there does not seem to be any merit in the argument that the Master can issue a bill of lading only on behalf of a carrier. Implicit in this argument is the proposition that there is a contract of carriage preexisting to the issuance of a bill of lading, according to which the carrier is determined, and the Master issues a bill of lading on behalf of the carrier so determined and the Master has no authority either to enter into a contract of carriage on behalf of the shipowner or to issue a bill of lading on behalf of the shipowner unless the shipowner itself is a carrier.

    In order to make my point clearer, I should discuss one aspect peculiar to the application of the Japanese COGSA.

    I am well aware that the 'contract of carriage' as defined in Article 1(b) of the Hague Rules applies only to a contract of carriage covered by a bill of lading or any similar document of title. However, the Japanese COGSA is made applicable to a charterparty irrespective of whether a bill of lading is issued or not.

    In this respect, Professor Tanaka states at p. 241 of his 'Explanation on Merchant Shipping Law' that:

"Secondly, although the treaty for unification (Hague Rules) is made applicable only to contracts of carriage covered by a bill of lading or any similar document of title relating to the carriage of goods by sea (Article 1(b) of the treaty for unification), there is no like limitation with regard to the scope of application of the law (the Japanese COGSA). This is a big difference between the treaty for unification and the law ... The reason why the law expanded its application, differing from the treaty for unification, is that since the responsibility of a carrier as set forth in the Commercial Code is considerably greater than in the case of the treaty for unification, it would be inappropriate, in view of the considerable imbalance that would be created with regard to the responsibilities of a carrier by an ocean-going vessel, to apply the treaty for unification to a case where a bill of lading is issued and the law to a case where a bill of lading is not issued." (parentheticals added)

    Therefore, under the Japanese COGSA the question as to who is the carrier can only be determined in accordance with Article 2, Paragraph 2 of the Japanese COGSA in terms of who undertook the carriage of goods and not in terms of who issued the bill of lading.

    In this respect, a Supreme Court judgment rendered on May 13, 1918 (in the case of (i) of No. 1552 of 1917) seems to be squarely on point.

    In a case in which the validity of a bill of lading missing the entry of freight was at issue, the Supreme Court of Japan, reversing the appellate court's decision which had held that such bill of lading was invalid, stated, as a ground of its ruling, that:

'... a bill of lading is not an instrument, by issuance of which the rights and obligations of the parties would be created. It is an instrument to be issued to ensure the performance of a preexisting contract of carriage..."

    Therefore, the issuance of a bill of lading does not create a new contractual relationship but only represents the one already created by the preexisting contract of carriage or the charter party between the carrier and the shipper.'

Mr. Nishiyama was clearly positing the existence of an antecedent contract of carriage which determined the identity of the carrier.

22. The question which we must now ask is whether this contention was raised at the hearing in a way which made it an issue between the parties.

23. During the cross-examination by Mr. Haddon-Cave, who appeared for the shipper below, Mr. Hiratsuka, the owner's expert witness, the following passage occurred:

"Q.     Is it right that the Bill of Lading is merely evidence of a pre-existing contract?

DW1:     If you mean the Bill of Lading is not the contract itself but merely evidence then that is correct. I do not think that the contract is always pre-existing.

Q.     The contract is made before the goods are shipped under a shipped Bill?

DW1:     Yes, in the sense it has agreed to be shipped in accordance with the Bill of Lading to be issued later.

Q:     Do you agree that prior to the Bill of Lading being issued there is usually a contract of carriage?

DW1:      Bill of Lading is the evidence of the contract.

Court:      Where is the original?

Q:      The original is on page 2 of Volume Two, number KH3.

Court:      Where does the box on 3A come from?

HC:      It is not clear if that is stamped on.

Q:     Do you agree that the Bill of Lading is not the contract it is evidence of the contract already in existence and you can look elsewhere to see parties to the contract?

DW1:     No, the Bill of Lading should provide the best evidence. It is not necessary to consult with other documents at all.

Q.     Look at the background facts. It is legitimate to look at document 3A to see that the freight was paid by Mitsubishi to Meishin. There is no mention on this document of the shipowner?

DW1:     Correct. This is a document made by the forwarder who acts as agents for Mitsubishi and it was arranged with Meishin. The name of the freight forwarder is Giyu Kaiun. They made this document to indicate or instruct Meishin to whom the freight should be paid. This document is not usually shown to Meishin at all. This is a copy Bill of Lading form of document.

Court:     No there are no words which say it is a Bill of Lading.

DW1:     Maybe it was misleading but in practice it is called a copy Bill of Lading. The Bill of Lading is not a single document, you also have the mate's receipt, documents for customers etc.

Q:     Why on the Meishin form and with the signature "for Meishin"?

DW1:    Convenience.

Q:     Meishin never see the document?

DW1:     With this stamp, no.

Q:     How do you know how much freight is due?

DW1:     Meishin can easily calculate the freight.

Q:     It is still clear evidence between Mitsubishi and Meishin?

DW1:     No, there is no signature.

Q:     It is evidence of a pre-existing contract?

DW1:     It never could be.

Q:     The freight rate of US$25 per cubic metre is compared to the charter party at page 135 of Volume Two of US$8.50 per cubic metre?

Smith:     None of these matters were ever put in Mr. Nishiyama's evidence.

Court:     As a general proposition would you expect a pre-existing contract before the Bill of Lading is issued?

Smith:     The Rule stated is the Bill of Lading is not the contract. It is open to the shipper to show different terms.

Court:     In that case I will not pay much attention to it. It is potentially in favour of shipowners.

Q:     On page 135 of Volume Two the fixture note shows the freight from the charterers to the owners as being US$8.50 per cubic metre FIOST. The charterers had the function of stowing and trimming the cargo?

DW1:     Yes. That is why there is a difference in freight.

Q:     The majority of the freight is paid to and received by Meishin?

DW1:     They have expenses.

Q:     So do the shipowners but on the figures they are different. Both have different tasks and different functions, the charterer has the majority of the freight?

DW1:     That does not help at all."

The suggestion of the existence of a "pre-existing contract" was clearly made to the witness. However, in order to determine whether it can be said that it was raised as an issue we must turn to the outlines of the opening and closing addresses of Mr. Haddon-Cave. He made it plain in the first words of his opening that the court was required to ascertain two matters: firstly, "What system of law governs the bills of lading" and, secondly, "the true construction of the bills of lading". Only once did he make any suggestion that the court should look outside the bills of lading when he said:

"Reading the bills of lading as a whole against the factual matrix of Meishin collecting the freight, it is clear that the parties intended this to be a contract between Mitsubishi and Meishin".

This was not, we are satisfied, a submission to the court involving reliance upon an antecedent contract but was a conventional submission involving no more than that a court a must, when interpreting contract , place it within its factual matrix.

24. In his closing address Mr. Haddon-Cave asked the court "to construe the bills of lading as if it was sitting as a Tokyo court" and went on to say: "The cargo owners repeat all the points made concerning the construction to be given to the front and back of the Bill of Lading stated above under English law: these are Meishin bills of lading. These bills of lading evidence a contract of carriage between the shippers and the charterers (no further "proof" is required)". We are satisfied that the existence of an antecedent contract was never raised as an issue at the hearing and that the trial judge did not, understandably, therefore, address himself to it.

25. We must next ask whether this matter was raised in the Notice of Appeal. The notice is divided into two parts. In the first there is submission that the trial judge erred in his application of Hong Kong law and in the second in his application of Japanese law.

26. All nine points raised in the section dealing with the errors under Hong Kong law deal with errors in construing the bills of lading. Each of the ten errors suggested under Japanese law deals also with errors in construing the Bill of Lading. It is nowhere in the Notice of Appeal suggested that the trial judge wrongly ignored evidence of an antecedent contract or that he failed to construe the Bill of Lading in accordance with such a contract. It seems to us unarguable that the grounds of appeal plead erroneous findings as to the parties to the contract of carriage to which the judge came by failing properly to construe the terms of the bills of lading.

27. We must ask finally whether it would be proper for this court to allow the antecedent contract point to be raised for the first time on appeal.

28. Having regard to the judgment of Lord Herschell in The Tasmania (1890) 15 App.Cas. 223 we are quite satisfied that it would not. We are satisfied that we do not have before us all of the facts bearing upon this matter and are far from satisfied that the owners would not have been able, had the matter been raised at trial, to have produced evidence in their favour thereon, in particular as to the exact terms of the antecedent agreement, which might well have indicated that Meishin did not in fact undertake the carriage of the goods. Moreover it is to be noted that the shipper agreed on the front of the bill "that this Bill of Lading supersedes all other agreements for the shipment of these goods". On its face it is a clear agreement by the shipper that whatever may or may not have been agreed prior to the coming into existence of the bills they would supersede all other agreements. What Mr. Nishiyama might have said with regard to this passage we do not know as he was cross-examined, understandably in the circumstances, upon the basis that the bills of lading should, without reference to any prior agreements, be interpreted in accordance with the words contained therein. We, therefore, refuse to allow this point to be raised in this appeal.

29. As we have already indicated the trial judge should, having decided that he was required to determine the matter in accordance of Japanese law, have turned directly to consider whether the expert evidence had established Japanese law with sufficient certainty to allow him to apply it to the interpretation of the Bill of Lading.

30. We are satisfied that the proper approach is to go straight to the affidavits of Mr. Nishiyama and Mr. Hiratsuka.

31. Mr. Nishiyama identified the issue as being whether the bills of lading contain or evidence a contract of carriage between the cargo owner and the shipowner. He referred to the notations on the face of the bills and then stated that he was satisfied that The Grieshiem, both in the High Court and in the Court of Appeal, showed "an excellent analysis of Japanese law and the result arrived at is very sound". However that may be, both courts were there primarily concerned to ascertain whether under Japanese law, both the owner and the charterer could be bound by a Bill of Lading . No such question arises in the present case. Mr. Nishiyama having stated that Japanese law must be applied, goes on to pose and answer the following questions:

(A) Who should be held to be a carrier under this bills of lading.

(a) Who can be the carrier? His conclusion is that: "It is clear that a voyage charterer, lessee (and time charterer) and shipowner can be a carrier independently of each other".

(b) who can issue a Bill of Lading? His answer to this question is "either a charterer, lessee or shipowner who undertakes the carriage of goods .... can issue a Bill of Lading."

(c) The Master's authority to issue bills of lading. He referred to Article 6 para. 1 of the Japanese COGSA which states "The carrier, Master or agent of the carrier shall, on demand of the shipper, issue to the shipper a Bill of Lading in one or more copies showing that the shipment of the goods has been made .:" He was satisfied that under Japanese law, a Master issued a Bill of Lading on behalf of the carrier, not the owner.

(d) The requirements of a Bill of Lading. Article 7 para. 1 of the Japanese COGSA requires, inter alia, that a Bill of Lading states the full name or trade name of the carrier. Mr. Nishiyama appears to be of the opinion that the lack of a carrier's name on the bill does not render it invalid and the issue with which we are concerned is not, therefore, resolved by this matter.

(e) Who is to be understood to have held itself out as Carrier under the Bills of Lading? He states that he is satisfied, both by reason of the wording of the bills and because, inter alia, Meishin as the voyage charterer, undertook the carriage and collected the freight, that Meishin held itself out as carrier.

(B) Whether the shipowner in addition to the Carrier, can be a Party to a Contract of Carriage contained in the Bills of Lading.

Mr. Nishiyama opines, following what was decided in "The Grieshiem", that the word "or" as used in Article 2(2) of the Japanese COGSA is disjunctive This was, however, not an issue.

Only then does Mr. Nishiyama turn his attention directly to the heart of the matter by asking himself the question which he takes to be "necessarily limited to whether it could be construed that the shipowner entered into a contract of carriage with Mitsubishi Electric Corporation and thus undertook to carry the goods when the Bills of Lading were issued. For the following reasons he believed the answer to lie in the negative.

(a) Legal Implication of "On behalf of Master" He is satisfied that, in the circumstances of the present case, the phrase "has no meaning whatsoever".

(b) No "full name or trade name of" the Shipowner is entered on the Bills of Lading His discussion under this head is not of assistance.

(c) Meishin Line undertook the Carriage We have earlier set out in full the opinion under this head. Mr. Nishiyama was clearly relying upon the existence of a pre-existing contract according to which the carrier was determined. Mr. Nishiyama makes no reference to the clause in the Bill of Lading whereby the shipper agrees that the Bill of Lading supersedes all other agreements.

(d) Provisions printed on the reverse side of the Bills of Lading

(1) Clause 1 of the Bills of Lading. He contends that Cl.1 conflicts with Art.2, para.2 of the Japanese COGSA and, as he regards its intent as being the same as Cl.3, he turns to a discussion thereof.

(2) Clause 3 of the Bills of Lading. Mr. Nishiyama states:

"As is apparent from the wording, this provision is premised on the agency of the company or line who issues a Bill of Lading.

As already discussed, under the Japanese COGSA, a charterer is a carrier who acts only on its own behalf. Therefore, if the issuer of a Bill of Lading is a charterer, agency principle is inoperative and I cannot conceive a case where a charterer, acting as a carrier, acts as agent of a shipowner or demise charterer.

Aside from the foregoing, I believe that the intent of the quoted sentence is against Article 15, Paragraph 1 of the Japanese COGSA and, thus, it is void.

For your reference, Article 15, Paragraph 1 of the Japanese COGSA provides that:

'Special agreements unfavorable to the shipper, receiver or holder of the Bill of Lading which are contrary to the provisions of Articles 3 and 5 inclusive, 8, 9 or Articles 12 to the preceding Article inclusive shall be null and void. The same shall apply to the contracts purporting to transfer to the carrier the rights arising from contracts of insurance, and other similar contracts.'"

Mr. Nishiyama is, when dealing with the "agency principle" clearly relying upon his earlier contention that the charterer, by reason of an antecedent contract, becomes stamped with the character of carrier. It is in such circumstances that he considers that the "agency principle is inoperative". We shall deal later with the contention that Cl.3 is against Art.15, para.1 of the Japanese COGSA.

(C) Whether the Shipowner can invoke the application of the Provisions contained in the Bills of Lading to its Benefit.

The final part of Mr. Nishiyama's affidavit is not relevant as it discusses the position where an owner, not a party to the contract of carriage seeks the benefit of provisions in the Bill of Lading.

32. We turn to consider the first affidavit of Mr. Hiratsuka. Mr. Hiratsuka states initially that:

"The question of who is a party to the contracts evidenced by the bills of lading should be determined in my view by the provisions of the bills of lading itself without reference to the provisions of the law applicable to the contract".

He elaborates, as follows, upon this statement:

"As far as the parties of the contracts evidenced by the bills of lading are ascertainable by the provisions of the bills of lading itself, in my view it is unjust and inappropriate to charge such parties based on the provision of the law applicable to the contract, such as Article 704 of the Commercial Code and Article 2 paragraph 2 of the Japanese Carriage of Goods by Sea Act (in any case, as I explain hereinbelow, these provisions do not have an effect to alter the parties to the contract evidenced by the bills of lading). This is because the law applicable to the contract is, under the Japanese Conflict of Laws Rules, determined by the intention of the parties and not vice versa".

He refers to the fact that the bills of lading contain the words "for the Master" in the bottom right hand corner and refers to Cl.1 and Cl.3. He states that it is "well established in Japanese law that the Master primarily acts as the agent of the shipowners, and not as the agent of the charterer, and accordingly in my view the fact that the bills of lading were signed "for the Master" means that the shipowners are, and were, the carrier". He states that, in his view, Clauses 1 and 3 read together make it clear that "the owner of the vessel is the carrier under the Bill of Lading". He states that under Japanese law "an identity of carrier clause (demise clause) is effective and binding on the parties to the contract evidenced by the Bill of Lading" and that, while there is no precedent in Japanese courts for this assertion, support therefor can be found in the writings of three scholars - Professor Toda, Associate Professor Nakamoto and Dr. Hagiwara. The citations indicate that each takes the view that Cl.3 in the Bill of Lading does not offend against Art.15 of the Japanese COGSA as it is properly regarded as a clause identifying the carrier and not as a clause limiting liability. He states that, in his view, Art. 704 has no application as it applies only to lessees and that there "are no judicial precedents under Japanese law which would regard voyage charterers, as opposed to time charterers, as lessees for the purposes of Art. 704".

33. He states that he does not agree with the decision in The Griesheim which held that the Japanese COGSA allows there to be only one carrier. As already indicated this was not an issue.

34. He does not agree that the fact that the Bill of Lading only had the name "Meishin Shipping Co. Ltd." on its face indicates that Meishin was the carrier under the bill and says : "To the contrary, the Bill of Lading was signed expressly "for Meishin Shipping Co. Ltd. on behalf of the Master". It is well established in Japanese law that the Master primarily acts as the agent of the shipowners and not as the agent of the charterers.

35. He states that he does not consider a failure to comply with Art. 7 of the Japanese COGSA to state the full name or trade name of the owner in the Bill of Lading would nullify the bill. He cites Professor Ishii who in his book "Maritime of Commercial Law" expresses the opinion that a bill is valid even though it does not contain all the required particulars. He also indicates that this view was taken in The Griesheim.

36. As can be seen from the foregoing, the principal points upon which he relies are:

(i) that Japanese law requires that a contract be determined in accordance with the intention of the parties ascertained by reference to the provisions of the contract itself,

(ii) that a well established rule of Japanese law is that the Master acts primarily as the agent of the owners,

(iii) that under Japanese law an identity of carrier clause (demise clause) is effective and binding on the parties to the contract.

37. Mr. Hiratsuka swore a further affidavit on 8th April 1991 because, consequent to the making of his first affidavit, the Tokyo District Court delivered judgment in The Jasmine. The decision was delivered on 19th March 1991 in the Tokyo District court.

38. A translation of the relevant parts of the judgment, which is exhibited to Mr. Hiratsuka's further affidavit (as well as a full version in Japanese), sets out:

    "2. Undisputed Facts"

(1) Owner and Time Charterer Defendant Ebisu Marina S.A. was the owner of the vessel and that Kansai Steamship Co., Ltd. was the time charterer of the vessel.

(2) Issuance and Contents of the Bill of Lading Karimata, the ship's agents in Indonesia, signed the Bills of Lading with respect to the cargo on 26th & 27th April, 1986. The signature was made below the phrase "For the Master". The Bills of Lading were headed, "Kansai Steamship Co., Ltd. BILL OF LADING".

(3) Governing Law Clause 2 on the reverse of the Bill of Lading specified Japanese law to be the governing law.

        (4)-(8) - Omitted -

        3. Points in Dispute

(1) Carrier under the Bill of Lading Whether or not the Defendant Kansai Steamship Co., Ltd. was a party to the contract evidenced by the Bill of Lading (carrier).

        (2) Cause of Damage to the Cargo along the Side Shell Plates - Omitted -

        (3) Cause of Damage on the Surface of the Cargo - Omitted -

        (4) Cause of Damage to the Cargo after Discharge - Omitted -

III Judgment on the Points in Dispute

        1 Point 1 (Carrier under the Bill of Lading)

        This court found the following facts based on the evidence.

(1) The phrase "For the Master" under which the agent, Karimata, signed the Bills of Lading is generally regarded as an indication that the shipowner is the carrier under the contract of carriage evidenced by the Bill of Lading.

        Evidence: - Omitted -

(2) Master is empowered by Law (in case of Japanese Law, Article 713 paragraph 1 of Commercial Code) with comprehensive authority to act on behalf of the shipowner and become a judicial agent of the shipowner.

        (3) There was the following provision in the Time Charter Party:-

(5) In the Bills of Lading there is an entry that Karimata received the freight on behalf of the shipowner/Master.

Evidence: - Omitted -

(6) In the Bills of Lading, there is a so-called demise clause to the following effect:

(7) Whilst the vessel is under time charter, the right to direct and supervise the Master and crew belongs to the shipowner.

(8) In the column for the Consignee in the Bills of Lading was entered "to the order of Bank Negala Indonesia ..." and in the column for the Notify Party, the name of the Korean Livestock company, which purchased the cargo and received the cargo insurance proceeds from the Plaintiffs, was inserted."

The finding of the court was in the following terms:

"Based on the above facts found, 'Kansai Steamship Co., Ltd.' at the top of the Bill of Lading indicates the name of the time charterer. Judging from the entries on the Bill of Lading, the shipowner was the party who owed responsibility as carrier, not time charterer.

In the practice of the shipping industry it is common to find the time charterers' name heading a Bill of Lading yet see the shipowner specified as carriers. Accordingly, it is difficult to accept that those who entered into a contract of carriage by receiving bills of lading, who are not an ordinary man with no knowledge of the practice of the shipping industry, could misunderstand that the shipowners are not the carrier under the Bill of Lading.

Therefore, it is not necessary to hold the time charterers responsible as carriers based on the fact that on the face of the Bill of Lading it appears as though the time charterer had been the carrier.

The provision refers to in (3) above should be regarded as a provision whereby the shipowner authorizes that the time charterer etc. to issue a Bill of Lading under which the shipowner is responsible as carrier. Accordingly, there is no possibility of the time charterer, contrary to the shipowner's intention, causing the shipowner to bear the liability as carrier.

Under the Time Charter Parties, time charterers have a right to instruct the Master with respect to so-called commercial matters and the right to decide on which voyage the vessel should be used. However, the fact that the time charterer have such power does not inevitably lead to the conclusion that time charterers should be responsible as carriers under Bills of Lading. A Time Charter Party is a contract aiming to utilize the service provided by the shipowner based on the special knowledge and experience in the area of shipping andvigation. In other words, such matters should be dealt with by the shipowners who possess and control the entire ship. Time charterers are not subjectively involved in such matters. This theory was not only valid with respect to navigational matters such as performing voyages and handling the ship (see Article 3 paragraph 2 of the International Carriage of Goods by Sea Act. Accordingly, not time charterers but shipowners are responsible for collisions), but also has appreciation in such matters as loading, stowage, custody and discharge, etc. of the cargo which are generally regarded as commercial matters. Except in cases where it is agreed under the Time Charter Party that a party of commercial matters (loading, stowage and discharge of cargo) is to be dealt with by the charterer, time charterers may give instructions to the Master and crew with respect to business which requires special knowledge and experience, such as loading, stowage, custody and discharge of the cargo, only with respect to the commercial side of such acts. With respect to the other side of these acts which requires special knowledge, time charterers usually do not have an ability to direct and supervise the Master and crew and they are not required to have such ability.

In view of the above, an agreement may be concluded between the owner and time charterer with respect to sharing of liability for compensation for loss/damages where the cargo suffered damage with respect to commercial matters. However, such final sharing of the damage is confined to the inner relationship between the shipowner and the time charterer, and the time charterer will not be directly responsible to the cargo owners without a contract being concluded between them. This is the case even though the time charterer may eventually indemnify the shipowner for the amount which the shipowner pays to the cargo interests as compensation for damage.

The carrier's liability under Article 3 paragraph 1 of the International Carriage of Goods by Sea Act is conditional upon the Master and crew being employed (in a broad sense) by the carrier. In this article the relationship established by the Time Charter Party between the time charterer and Master and crew with respect to the commercial matters is not an employment relationship in its narrow sense but an employment relationship in the broader sense. However, the question of who the carrier is under the Bill of Lading should be determined by interpreting the Bill of Lading itself. Article 3 of the International Carriage of Goods by Sea Act does not have the effect of making a time charterer who is not the carrier under the'Bill of Lading responsible under the Bill of Lading. Accordingly, Article 3 of the International Carriage of Goods by Sea Act may apply to the time charterer's liability as carrier under the Bill of Lading only where the time charterer signs it as a carrier, or to the time charterer's liability as carrier under the Voyage Charter Party where the time charterer entered into a voyage charter party (a kind of contract of carriage). However, with respect to the shipowner's Bill of Lading, the time charterer cannot be responsible as carrier under the Bill of Lading based on the provision of Article 3.

Further the shipowner owns the hull and equipment which constitute security for the owner's liability as carrier under the Bill of Lading. The time charterer does not own or possess the hull nor equipment, and accordingly the ship is no security for the time charterer's liability as carrier, unlike the subject of maritime lien. Accordingly, it cannot be said that to make the shipowner carrier under the Bill of Lading provides less protection to the claimants than in the case where the time charterer is the carrier under the Bill of Lading (if the time charterer is the carrier, the claimants may be in a less favourable position if he has no assets).

In view of the above, there is no reason why in this case the effect of the Bill of Lading which provides that the shipowner is to be the carrier should be denied, and therefore the Bill of Lading in this case should be interpreted literally and the shipowner, Defendant Ebisu Marina S.A. should be regarded as the carrier, and the time charterer, Defendant Kansai steamship Co., Ltd. is not the carrier under the present Bill of Lading.

Incidentally, a demise clause which provides the shipowner to be the carrier does not make it unclear as to who is the carrier under the Bill of Lading.

Further, it does not restrict the carrier's liability, contrary to the provisions of various articles referred to in Article 15 paragraph 1 of the International Carriage of Goods by sea Act, and accordingly is not contrary to the said Article 15. As a result, the said demise clause is binding and effective as per its provision."

The court went on to state its Conclusion as follows:

"Defendant Kansai Steamship Co.,Ltd. is not a carrier under the Bill of Lading so the claim against it should be dismissed. The claim against the carrier, Defendant Ebisu Marina, should be dismissed because the damage to the cargo was not caused by the acts of the crew who were employees of the Defendant Ebisu Marina."

Mr. Hiratsuka states in his affidavit that the Tokyo District Court, which sat as a court of three judges headed by the Chief Justice Mr. Justice shigeki Aso-o, has a similar status to that of the High Court in Hong Kong. He says that judicial precedents, while not binding in Japan, do have persuasive authority and that, in general, those of the Tokyo District Court are accorded greater weight by other judges than the writings of professors and other learned authors.

39. It is to be noted that Mr. Hiratsuka appeared in The Jasmine for the time charterer and the owner and Mr. Nishiyama appeared for the unsuccessful claimants.

40. The important feature of the decision for present purposes was that the court was required to determine whether the owner or the time charterer was the carrier under the Bill of Lading. The bills were in standard form and bore the name of the time charterer Kansai Steamship Co.,Ltd. at the top of the form. They were signed "For the Master" and contained a demise clause. One difference from the present facts was that the time charter party provided that the charterer was authorised to sign Bills of Lading on behalf of the Master in conformity with the charter party.

41. Mr. Hiratsuka states in his affidavit:

"In coming to the conclusion that the vessel's owner and not the time charterer was the contracting carrier, the Court approached the matter thus:-

(1) The fact that bills of lading were signed "For the Master" is an indication that the shipowner was the contracting carrier;

(3) Shippers and other persons who take bills of lading are well aware that the name at the top of the Bill of Lading might be that of someone other than the contracting carrier, so it is difficult to accept that there is any room for misunderstanding;

(4) In any event the shipper or Bill of Lading holder is better off being able to look to the vessel's owner rather than the charterer. The claim against the owner can be secured on the vessel herself; the cargo claimant acquires a maritime lien. But the time charterer does not own the ship or her equipment and consequently the cargo claimant may well be unsecured as against such party;

(5) Accordingly there is no reason why the Court should not give effect to the terms of the Bill of Lading if these indicate that the shipowner is the contracting carrier;

(6) The Court concluded that on the true construction of the bills of lading, including the demise clause, the shipowner was the contracting carrier."

42. Mr. Hiratsuka states that the court expressly held that Art. 713 of the Commercial Code gave the Master authority to issue Bills of Lading on the shipowner's behalf. He also states, and this is of particular importance in the matter before this court, that the Court held that "the function of a demise clause is to identify the carrier. It does not tend to restrict the carrier's liability and therefore does not offend against Art. 15 of COGSA." He observes: "Perhaps the most important effect of the decision ".... is that it finally lays to rest the argument that a demise clause is invalid under Japanese law". He also states that the decision made it clear that in Japanese law a time charterer is not treated as the equivalent of a demise charterer.

43. Mr. Nishiyama also filed an affidavit dealing with this decision. He agrees that there is no system of judicial precedents in Japan and that the Tokyo District Court has a status similar to that of the High Court in Hong Kong. He does not agree with Mr. Hiratsuka's statement that, in general, judicial precedents, in particular those of Tokyo District Court, are accorded greater weight by other judges than the writings of professors and other learned authors. He suggests that the judgments of the Tokyo District Court would not be given any greater weight than judgments of other district courts in Japan.

44. Mr. Nishiyama correctly indicates that the court referred to the demise clause "only incidentally" and suggests that, as no reasoning was given for the court's conclusion thereon, the persuasive effect of this part of the judgement is "in strong doubt". He states that The Jasmine decision is under appeal and that "pending the decision of the Tokyo High Court, it is erroneous to say that the judgment has finally laid to rest the argument that the demise clause is invalid under Japanese law." He criticizes the court for not having regard to the provisions of the Commercial Code of Japan and the Japanese COGSA and seems to be suggesting that it was wrong for the court to hold that "the question of who the carrier is under the Bill of Lading should be determined by interpreting the Bill of Lading itself". He further suggests that The Jasmine on its facts is distinguishable from the present case. He says "It is clear that the signature of Karimata was qualified by the phrase "For the Master". In contrast, the signatures on the Meishin bills of lading were qualified by the words "FOR MEISHIN SHIPPING CO., LTD.". It appears that the Tokyo District Court merely restated what is legal common sense and nothing peculiar to admiralty law is contained in the Court's statement because when someone signs a document under a phrase "For ...", it naturally means that that someone signed for the named principal." We cannot help but remark that this statement ignores the fact that on the Meishin bills of lading underneath the signature there appeared the words "On Behalf of Master".

45. At the trial before Sears, J. both Mr. Nishiyama and Mr. Hiratsuka gave evidence. We have as part of the appeal bundle an agreed transcript of their evidence. Mr. Nishiyama commenced his evidence by saying that he had no amendments to make to his "report". He was, it seems clear, referring to his affidavit. He said: "The carrier under this Bill of Lading is Meishin Shipping Co., Ltd. I say that firstly because the Bill of Lading is head 'Meishin Line' and there is an entry code for 'Meishin Shipping Co. Ltd.' at the foot of the document." He said that there was nothing in Mr. Hiratsuka's report which would cause him to change his mind.

46. When reading his cross-examination by Mr. Clifford Smith, it must be borne in mind that implicit in the answers of Mr. Nishiyama was his concluded view that Meishin came to the Bills of Lading stamped with the character of carrier. He was satisfied that the identity of the carrier was already determined under Japanese law prior to the issue of the Bill of Lading. This approach is clear from the passage in his affidavit to which we have already referred:

"I believe that my discussions on the 'Master's authority to issue bills of lading' are the key to the understanding of the foregoing conclusion.

If we are to construe that the Master can, independently from the charterer, who  undertook the carriage of goods, enter into a contract of carriage on behalf of the shipowner by issuing a Bill of Lading, there does not seem to be any merit in the argument that the Master can issue a Bill of Lading only on behalf of a carrier. Implicit in this argument is the proposition that there is a contract of carriage pre-existing to the issuance of a Bill of Lading, according to which the carrier is determined, and the Master issues a Bill of Lading on behalf of the carriers so determined, and the Master has no authority either to enter into a contract of carriage on behalf of the shipowner or to issue a Bill of Lading on behalf of the shipowner unless the shipowner is itself a carrier." (Our emphasis).

It seems to us that Mr. Clifford Smith and Mr. Nishiyama were, to a large extent, at cross purposes during the cross-examination. Mr. Clifford Smith was cross-examining upon the basis that the identity of the carrier fell to be determined by reference to the Bill of Lading Mr. Nishiyama was approaching the matter upon the basis that "there is a contract of carriage pre-existing to the issuance of the Bill of Lading according to which the carrier is determined, and the Master issues a Bill of Lading on behalf of the carrier so determined ..." This is not to overlook that he did, at times, appear to be contending that the bills on their face indicate that

Meishin is the carrier. At one point he said:

"On the pure construction of the Bill of Lading it is a Meishin Bill of Lading Meishin is the carrier. The only person who can issue the Bill of Lading is the carrier. Therefore, how should he be able to avoid his liability."

The real thrust of his thinking is, however, illustrated in the following exchange:

"Q.     There is no principle of Japanese law that just because the charterer has issued the Bill of Lading it cannot be a shipowner's bill?

PW1     The discussion is the other way around. By Article 2(2) the person who undertakes the carriage is the carrier. The person who does so is authorized to issue the Bill of Lading. The carrier could be the owner.

Ct.     So the Bill of Lading is issued by the carrier but the carrier can be the shipowner?

Q.     I put it to you that the Bill of Lading might as a fact have been issued by the charterer but may be a contract with the shipowner? It does not have to be a contract with the charterer just because the charterer issues the bill?

PW1     I don't agree with that. In order to be able to issue the Bill of Lading the person must be the carrier. Charterers do not issue Bill of Lading without entering into contract of carriage.

Q.     So the person who issues the Bill of Lading must be the carrier?

PW1     Article 6 says that the carrier shall issue the Bill of Lading. So the carrier issues the Bill of Lading. In this sense, he must be carrier before he can issue the Bill of Lading. Who can be the carrier is defined by Article 2(2)." (Our emphasis.)

Given our ruling that the shippers are precluded from relying upon a pre-existing contract of carriage, the evidence of Mr. Nishiyama can be of only limited assistance to them.

47. As to the Clause 3 (the demise clause) it seemed to be Mr. Nishiyama's view not only that it was invalidated by Art.20 (1) of the Japanese COGSA but also that what he regarded as the indication on the face of the bill that Meishin was the carrier was sufficient to override it. He added further that the clause was indefinite as it was "totally unclear" as to who "the party" was.

48. Mr. Hiratsuka gave evidence saying that he was satisfied that it was a shipowner's Bill of Lading . He stated that "on behalf of Master" means on behalf of shipowner. He also said that the demise clause indicated that it was an owner's bill. He said that the appearance of the words "Meishin Line" at the top of the bill was only one of the matters that had to be looked at and that the bill had to be construed as a whole. He said that a bill such as this would be a charterer's bill only if the words "On behalf of the Master" were excluded and if the demise clause was struck out. He said that Cl.9 of the Gencon Charter Party which provided that the Captain was to sign Bills of Lading "at the rate of freight as presented without prejudice to this charter party" indicated that the signature of the Master on a Bill of Lading would bind the shipowner. He said that he categorically disagreed with the suggestion that once a ship was voyage chartered the shipowner could not be the carrier.

49. In cross-examination, Mr. Haddon-Cave was putting to the witness that the identity of a carrier had to be determined by construing the Bill of Lading. This approach can be seen in the following passage:

"Q.     Do you accept where the Master has authority then the Master can issue the Bill of Lading for the charterer?

DW1     Yes. That does not deny if the Bill of Lading is signed on behalf of the Master or for the Master it should be assume the carrier is the shipowner.

Q:     It is a question of construction whether the Master signed for the owner, charterer or someone else.

DW1     There is a possibility he signed for the charterer but if on behalf of the Master then it is presumed he signed for the shipowner.

Q:     It is a question of construction.

DW1     Yes. But if for the Master or on behalf of the Master the clause appears without qualification it is assumed he did so for the shipowner."

The same approach was pursued in the following passage:

"Q.     It is common ground that under Japanese law authority to sign a Bill of Lading can be given to any relevant person if the authority is properly given and the capacity of the person signing is properly stated.

Ct.     That is troubling me. When I look at the Bill of Lading, the carrier, under Article 6 can issue the Bill of Lading. What have the words "carrier's agent" got to do with it ?

Q:     It is a standard form signed by the Master or the agent partly as a receipt. A crucial aspect is whether he is signing on behalf of himself or someone else.

Ct.     No doubt under Article 6 the carrier can sign. Here there are the additional words on behalf of the Master.

Q:     It is all a question of construction?

DW1      That is correct.

Q:     Construction in Japanese law is the same as English law, in that you look carefully at the words and decide what they mean?

DW1      Yes."

50. Mr. Hiratsuka said that the words "for Meishin Shipping" in the signature box did not in his view have any significance. He did, however, when pressed, volunteer two reasons for their appearance - one was a commercial purpose i.e. to bring the charterer's name as a commercial entity to the notice of shippers and the second was because it was "expected Meishin's agent signed on behalf of the Master. This is how Meishin did their business".

51. Sears J. felt that what he considered to be an error in the evidence of Mr. Nishiyama may have clouded his opinion on demise clauses. He said:

"However, underlying Mr. Nishiyama's reasoning is his opinion that, as under Japanese law there can only, be one carrier, where a ship is chartered, the ship-owner could not be the carrier. He was asked in cross-examination what would be the position if a ship is voyage-chartered and the shipowner wants to be the contracting party - he answered that this could not be done. He sought to explain this answer by saying that the space in the ship has been given to the charterer who then becomes the carrier. This line of reasoning only emerged in oral evidence and seems, in my judgment, to be contrary to the generally held proposition that in a voyage charterparty the court has to construe the Bill of Lading to ascertain which of the two competing parties - the ship-owner or the charterer - is the carrier. This exercise is unnecessary if Mr. Nishiyama's assertion is correct.

    As a matter of fact, having considered all the evidence available to me I consider Mr. Nishiyama to be in error. This wrong approach may well have clouded his opinion on demise clauses."

52. Mr. Thomas suggests that the trial judge was wrong so to hold as he misapprehended the position adopted by the witness. We cannot agree. It was Mr. Nishiyama's approach that once the ship was chartered the identity of the carrier was, for all practical purposes, no longer an issue. His reasoning when he came to construe the Bills of Lading was dominated by this approach. It was true that the judge was in error when he said that the "line of reasoning only emerged in oral evidence ..." It was clearly apparent, as we have indicated, in his first affidavit. The judge was, however, entitled, given that his task was to construe the Bills of Lading by looking at the words therein, to treat the evidence of Mr. Nishiyama as he did.

53. Mr. Thomas contends that, even if he cannot rely upon an antecedent contract, the Bills of Lading on their face are manifestly charterer's bills. Before examining this contention, we consider it proper to indicate the view we take of the decision in The Jasmine. We are satisfied that we must give considerable weight to that decision. While there were, as Mr. Thomas pointed out, factual differences, the circumstances therein and those in the present case, it clearly held:

(i) that the words "On behalf of the Master" are an indication that the shipowner is the carrier;

(ii) that the appearance of the name of the charterer at the top of a Bill of Lading does not conclusively indicate that it is a charter's bill;

(iii) that demise clauses are not invalid under Japanese law.

Mr. Thomas submits, adopting Mr. Nishiyama's approach that the last matter was referred to only "incidentally" and that little weight can be given to that part of the decision. While it may be true that the court did not rely thereon in coming to its conclusions, the passage clearly indicates that the court was satisfied that demise clauses are not invalid under Japanese law.

54. We are satisfied from the evidence of both experts that under Japanese law, which is the same as English law in this regard, the meaning to be ascribed to a commercial document is to be ascertained from the words used by the parties therein.

55. We agree with the judge below that Mr. Haritsuka has correctly stated the relevant Japanese law. We are satisfied from his evidence reinforced as it is by the decision in The Jasmine that the words "on behalf of the Master" give a strong indication that the owner is a party to the bill. We are satisfied, again relying upon Mr. Hiratsuka and The Jasmine, that demise clauses are not void under Japanese law by virtue of Art. 15 paragraph 1 of the Japanese COGSA.

56. It was argued by Mr. Thomas that even if that be so, Cl.3 in the Bills of Lading was void for uncertainty. This submission rested upon the words in the final sentence. These words may perhaps be intended to cover the situation where a foreign court, having held itself not to be bound to apply Japanese law, has adjudged someone other than the owner or demise charterer to be the carrier. We are satisfied that if this matter was being tried before a Japanese court, which is the situation in which we must place ourselves, that the Japanese court would regard the words as mere surplusage and would not hesitate to give effect to the earlier words of the clause.

57. For these reasons we agree with the judge that under Japanese law, the bill would be construed as an owner's bill and that the owner is therefore entitled to take advantage of the limitation clause. The appeal must, therefore, be dismissed.

58. In handing down this judgment we make an order nisi that the defendants do have their costs.