Consent is needed before the ‘shipper’ named in the bill of lading can become party to the contract of carriage, according to a ruling in the case of MVV Environment Ltd v NTO Shipping [2020] EWHC 1371 (Comm), writes Simran Lajmi.

The Facts

In the case of MVV Environment Ltd v NTO Shipping [2020] EWHC 1371 (Comm), the Claimant had a contractual arrangement with a waste disposal company, RockSolid BV ("RS"). Under this contract, RS would regularly collect and transport “unprocessed incinerator bottom ash” (“UIBA”) to the Netherlands for treatment, recycling and disposal.

The contractual terms between the parties made it clear that the UIBA became the property and responsibility of RS from the moment it was loaded onto its vehicles at the claimant's Plymouth plant and that the claimant had no commercial or proprietary interest in the material thereafter. However, for each sea-voyage transporting the waste from Victoria Wharf to the Netherlands a bill of lading was issued naming the Claimant as the shipper.

In 2017, two explosions took place on the Defendant’s vessel, purportedly caused by the UIBA. The Defendant commenced arbitration proceedings through a jurisdiction clause incorporated into the bill of lading against the named shipper (i.e. the Claimant). The Claimant challenged the jurisdiction of the arbitration Tribunal on the basis that they were not the “shipper” and were not a party to the contract of carriage (and by extension not subject to the jurisdiction clause) but were unsuccessful. They subsequently brought a s67 challenge in the Commercial Court.

The Judgment

HHJ Pelling QC was sceptical of arguments that the Claimant was a party to the contract of carriage solely because they were named as shipper. He stated that a contract of carriage comes into existence at a time when the goods are presented for and accepted by the carrier for shipment and thus precedes and is only evidenced by a bill of lading.

In this case, the ship’s agent had been responsible for including the Claimant’s name in the Bill of Lading and they had done so without the Claimant’s consent. The Defendant relied on the fact that the claimant was copied into an email attaching the shipping documentation (including the bill of lading naming the Claimant as the shipper) for every voyage and had never objected. However, the Court firmly rejected this and made clear that assent shall not be inferred from silence unless there is some further indication in the surrounding circumstances.

The last consideration for the court was whether the ship’s agent had express, implied or ostensible authority. This turned largely on the facts of the case, although HHJ Pelling QC made it clear that authority to enter into a contract on behalf of another is authority to commit that other to legal obligations to a third party without qualification and thus is unlikely to be inferred when there is no express agreement to that effect.