DELMAS & ORS V. SUNNY OSITEZ INTERNATIONAL LTD (2019)

Background

This appeal arose from the loss and damage of imported electrical goods carried from China to Nigeria aboard the vessel CMA CGM Oubangui. In December 2007, Sunny Ositez International Ltd ordered 1,400 cartons, comprising approximately 70,000 fan regulators, from Shenzhen Light Industry Ltd in China. The consignment arrived at Apapa Port, Lagos, on 22 January 2008, but flooding during the voyage damaged 605 cartons, representing 30,250 units. A joint inspection was conducted by representatives of the parties and the vessel owners’ protection and indemnity representatives. The respondent alleged that repeated demands for compensation were unsuccessful and consequently commenced proceedings at the Federal High Court on 11 December 2008, claiming approximately N10 million in special and general damages.

The trial court dismissed the action as statute-barred. It classified the relevant bill of lading as a combined transport bill of lading and held that the action ought to have been commenced within nine months under clause VI(9) of the bill and the applicable maritime limitation regime. The Court of Appeal reversed that decision, holding that the shipment was a port-to-port transaction and that the suit, filed within twelve months, was competent. However, instead of determining liability on the merits, it remitted the case to the Federal High Court for a fresh trial before another judge. The appellants challenged the classification of the bill of lading, while the respondent cross-appealed against the order for a trial de novo.

Issues

1. Whether the bill of lading was a combined transport bill of lading or a port-to-port bill of lading.
2. Whether the entries and asterisks in the bill of lading constituted an error or ambiguity requiring the court to consult other evidence.
3. Whether the Court of Appeal properly remitted the case for trial de novo, or ought to have determined the substantive claim itself under section 15 of the Court of Appeal Act.

Ratio Decidendi

The Supreme Court held that a bill of lading has three important aspects: it is a receipt acknowledging shipment of goods, it contains or evidences the contract of carriage, and it may operate as a document of title. As a contractual document, it binds the parties, and clear contractual words must ordinarily be given their plain and ordinary meaning. Although the bill in this case was designed to be used either for port-to-port or combined transport shipment, the mere placement of an asterisk beside the delivery particulars did not conclusively establish that the parties had selected combined transport.

A combined transport bill of lading ordinarily contemplates carriage involving more than one mode of transportation and responsibility extending beyond the sea voyage to delivery at a specified inland address. By contrast, port-to-port carriage begins at the port of loading and ends at the port of discharge. The relevant bill identified Apapa, Lagos, Nigeria, both as the place of receipt or delivery and as the port of discharge. It did not state a specific address outside the port, identify any pre-carriage, or disclose another mode of transportation. The spaces relating to pre-carriage and place of receipt were also blank. The surrounding evidence showed that the goods were loaded at Chiwan Port and discharged at Apapa Port, after which the respondent’s clearing agent took delivery.

The Court further held that where ambiguity exists, the court may consider other relevant documents and surrounding facts under the Evidence Act. The invoice, delivery documents, discharge records and oral evidence were relevant to determining the true nature of the transaction. Since the appellants asserted that the shipment was combined transport, they bore the burden of proving the facts necessary to support that classification. The appellants failed to discharge that burden, and their witness also admitted during cross-examination that the shipment was port-to-port. Any ambiguity in the document was therefore construed against the party responsible for its preparation under the contra proferentem principle.

Court Findings

The Supreme Court affirmed the Court of Appeal’s conclusion that the bill of lading represented a port-to-port shipment. Consequently, the nine-month contractual limitation period applicable to combined transport shipments did not govern the action. The respondent’s suit, filed on 11 December 2008 after the goods were damaged and discharged but within twelve months, was not statute-barred. The trial court had therefore erred in dismissing the claim without considering the substantive issues of damage, breach of contract, negligence and liability.

On the cross-appeal, the Supreme Court explained that section 22 of the Supreme Court Act gives the court discretionary powers comparable to those conferred on the Court of Appeal by section 15 of the Court of Appeal Act. The appellate court may rehear the case, determine the real controversy itself, remit the matter for rehearing, or issue other necessary directions. The power is discretionary and must be exercised according to the circumstances of each case.

The Court identified the relevant conditions for the exercise of the appellate power: the trial court must have had jurisdiction; the real issue must be ascertainable from the appeal; the necessary materials must be available; and the interests of justice must favour final determination at the appellate level. In this case, the trial court had not decided the substantive question of liability. The grounds of appeal before the Court of Appeal focused mainly on limitation and the classification of the bill of lading, rather than the merits of the respondent’s claim. It was therefore appropriate and fair to remit the action for trial on the merits before another judge.

Conclusion

The Supreme Court unanimously dismissed both the main appeal and the cross-appeal. It affirmed the judgment of the Court of Appeal that the shipment was port-to-port, that the respondent’s action was competent, and that the matter should be tried afresh by another judge of the Federal High Court. The parties were ordered to bear their respective costs.

Significance

The decision is significant in Nigerian maritime and commercial law because it establishes that the legal character of a bill of lading depends on the entire contractual document and the surrounding evidence, not on an isolated asterisk or label. Courts must distinguish a genuine multimodal or door-to-door arrangement from a single sea voyage ending at the port of discharge. The judgment also confirms that parties are free to define their contractual relationship, but ambiguous terms will not be expanded by the court to impose a shorter limitation period without convincing evidence. Finally, it illustrates the restrained and discretionary use of appellate powers to determine a case finally where the trial court has not adjudicated the substantive dispute.