Judgment

[Please note that this case has not been edited in accordance with the current Singapore Law Reports house style.]

                                                                                                                                                            Judgment reserved.

Lai Siu Chiu J:

The facts

1       JK Trading Corporation (“the plaintiffs”) are a Singapore firm and are in the export business. Since 1973 they have been exporting a variety of goods to the Republic of Maldives (“the Maldives”). One of the plaintiffs’ partners, who is also their manager, is Darshan Singh Grewal (“Darshan”); he has been with them since 1980.

2       The defendants are a Danish ship-owning and brokering company known as Elite Shipping A/S and were/are the owners of the vessel Arktis Sky (“the vessel”). At the material time the vessel was time-chartered to a company in the Maldives known as Maldives National Ship Management Pte Ltd (“MNSL”) under a charterparty dated 19 April 1991 (“the charterparty”). Under the terms of the charterparty, the vessel was to trade on liner terms under the orders of MNSL, between Singapore and Male, the capital of the Maldives. MNSL had a Singapore agent Seaward Shipping and Trading (S) Pte Ltd (Seaward).

3       Some time in late 1991 Darshan received telephone orders for goods from Murex Pte Ltd (“Murex”), one of the plaintiffs’ customers in the Maldives. The plaintiffs had supplied goods to Murex since June 1990. According to Darshan, the sales to Murex were always on document against payment (“D/P”) terms. Darshan would ship the goods, send the original bills of lading issued by the carrier to the Bank of Maldives (“the Bank”) through the plaintiffs’ local bank UCO Bank (“UCO”). Photocopies of the bills of lading would then be forwarded or posted to Murex so that the latter would know roughly when the goods would arrive at Male. Murex would pay the Bank to obtain the original bills of lading in order to take delivery of the goods. In turn the Bank would pay UCO who would ultimately pay the plaintiffs.

4       For the orders placed by Murex in 1991 comprising of general cargo including canned food and cigarettes (“the goods”), Darshan made four shipments, all on the vessel. The shipments were made on or about 1 October, 21 October and 11 November 1991 with the last shipment on 7 February 1992; the plaintiffs were issued 28 bills of lading (the bills of lading) all signed by Seaward As Agent Only. The plaintiffs handed the originals of the bills of lading to UCO who forwarded the same to the Bank at their Bazaar branch with instructions to release to Murex against payment for the goods.

5       From December 1991 onwards, UCO sent several reminders to the Bank to inquire about the status of payment from Murex. Darshan said the plaintiffs were not unduly concerned about not receiving payment as they were still being paid by Murex for earlier shipments. He was aware that there was a shortage of foreign currency in the Maldives and it was common for the plaintiffs to receive payments late (two to four months) from their customers for that reason. Darshan was also aware that some of the plaintiffs’ customers obtained delivery of cargo by furnishing a banker’s guarantee in lieu of presentation of original bills of lading; they would pay for the goods later. By March 1992, however, Darshan became concerned as Murex had stopped payment for earlier shipments. He chased Murex for payment by telephone calls; Murex promised to but did not pay.

6       Darshan requested UCO to make inquiries of the Bank. Eventually a reply from the Bank dated 20 April 1992 was received advising that the originals of the bills of lading were still with the Bank. Darshan suspected that Murex may have obtained delivery of the goods without the bills of lading; he called the chairman of Murex, Ali Abdullah (Ali), on 21 April 1992 upon his receipt of the Bank’s reply. Ali referred Darshan to Ahmed Arif (“Ahmed”) the director of trade for Murex who he indicated, would be visiting Singapore.

7       On 22 April 1992, Darshan met Ahmed in Singapore. On Darshan’s inquiry as to how Murex had managed to take delivery of the goods, Ahmed said Murex used a “close contact” in the Maldives Port Authority (“MPA”) to obtain release of the goods; Ahmed promised to make payment within ten days. At Darshan’s request, Ahmed wrote out a note stating that Murex would pay for the goods within ten days and that the goods still belonged to the plaintiffs. However, Murex failed to keep its promise and the plaintiffs were not paid at all.

8       Darshan then sent a telex dated 2 May 1992 to the MPA to inquire how Murex had managed to obtain delivery of the goods without presentation of the bills of lading. He also spoke to an officer of Male customs who was attending a course in Singapore; he was told that the originals of the bills of lading were with Male customs. That information prompted Darshan to send a telex to Male customs in the same terms as his telex to MPA.

9       Darshan received a reply from the Director of Customs dated 6 May 1992 stating that the department did not release the goods until they received the authorised bills of lading from MPA and suggested that the plaintiffs check with the latter. Darshan replied that MPA had informed him that the Male Customs held the originals of the bills of lading; Male Customs did not reply to his further telex inquiring whether they held the originals of the bills of lading.

10     As he was not receiving satisfactory answers to his inquiries, Darshan visited Male personally on 16 May 1992. When he met Ali and Latheef Abdullah (“Latheef”) one of the directors of Murex, they asked Darshan to refer to Ahmed how Murex had managed to clear the goods without the bills of lading; Ahmed was then not in Male. Although Darshan spoke to Ahmed on the telephone, the latter did not explain but merely promised to settle the plaintiffs’ invoices which promises were not fulfilled. While Darshan was still in the Maldives, the plaintiffs received a letter dated 6 May 1992 from Ali and Latheef claiming that Ahmed was not authorised to import the goods.

11     Darshan also made inquiries of the Bank and the MPA during his trip. The former told him they still had the originals of the bills of lading whilst the general manager (“Didi”) of the latter said the goods had been cleared on the presentation of the bills of lading. Darshan returned to the MPA on the following day and was shown by Didi three to four copies of the bills of lading which had been presented by Murex for release of the goods. Darshan compared those copies with the originals he had obtained from the Bank; he noted a number of discrepancies. When he raised the discrepancies with Didi, he was advised to settle the matter with Murex. When he returned again to the MPA a third time, Darshan was shown other (three to four) forged copies of the bills of lading. He was furnished copies of all the bills of lading he had seen.

12     Darshan went back to Male customs and showed the Director Mohamed Manik copies of the forged bills of lading he had obtained from MPA. The department confirmed that the goods had been released on the presentation of those bills of lading. Darshan then lodged a report with the Maldives police as which result Ali and Latheef were placed under arrest but were subsequently released.

13     On the eve (24 May 1992) of his departure from the Maldives, Darshan was requested to see the Minister of State for Customs, one Hussein Manikfan (“the Minister”). However, despite waiting for him the whole day, the Minister did not turn up. When they finally met the following morning (25 May 1992), Darshan pointed out to the Minister the discrepancies between the forged and the originals, of the bills of lading. Darshan noted that the invoices shown to him by the Minister also contained a number of discrepancies when compared with the plaintiffs’. The signatures on the forged bills of lading and invoices were not and were completely different from, Darshan’s.

14     Instead of assisting him, Darshan alleged that the customs department advised him not to leave the Maldives pending their investigations; they further retained photocopies of the forged bills of lading he had obtained from the MPA. The department also insisted that he sign a statement they had drafted before he could leave. Thinking he had no other alternative and that he would not be allowed to leave the Maldives if he refused, Darshan signed the statement which was dated 25 May 1992 (“the Statement”) together with a further statement (“the Further Statement”) later the same day, at the Minister’s request. On 26 May 1992, Darshan returned to Singapore.

15         Subsequently, the plaintiffs and their (previous) solicitors wrote (repeatedly) to the Male customs for copies of the forged bills of lading but to no avail. Instead, in a letter dated 21 April 1992 to the plaintiffs’ then solicitors, the department referred to the Statement and Further Statement given by Darshan and contended that it was the function of the MPA, not of customs, to release cargo to consignees. The duty of Male customs was only to levy duty when bills of lading were submitted. With regard to the goods, the department did not come across anything to indicate that [they] were not authentic documents.

16     Before and after his return from the Maldives, Darshan lodged claims with various authorities in the Maldives for the loss of the goods which he considered to have been stolen by Murex. These parties included: the President, the police and the Minister of Trade and Industries of the Maldives as well as the directors of, MPA, the charterers and customs. However, no action was taken by any of the parties to prosecute any person in, nor were any steps taken to recover the goods from, Murex. Instead, the Ministry of Trade and Industry advised the plaintiffs to refer the matter to the police and to the courts.

The claim

17     The plaintiffs commenced these proceedings in September 1992. In their (reamended) statement of claim, they asserted they were the shippers and or owners of the goods and or holders of the bills of lading. The plaintiffs alleged that the defendants were under a duty (as carriers for reward and or by reason of the contract of carriage contained in or evidenced by the bills of lading) to the plaintiffs to take reasonable care of and to deliver the goods at Male, in the same good order and condition as shipped. In breach of contract/duty and or negligently, the defendants failed to deliver the goods to the plaintiffs upon the vessel’s arrival at Male.

18     In the alternative, the plaintiffs averred that the defendants failed to discharge their duty as they, their servants or agents wrongfully and without authority, delivered the goods to third parties at Male without production of the bills of lading, thereby converting the goods. The plaintiffs claimed the loss they suffered which was, the total value of the goods amounting to USD385,765.50. At the trial, counsel for the plaintiffs informed the court that the plaintiffs had just received payment of USD20,900 from the Ministry of Defence And National Security of the Maldives. The payment had been made by Murex in accordance with a letter dated 18 February 1993 from the said ministry; no explanation was given as to why the ministry took six years to forward the money. Accordingly, the plaintiffs’ claim was reduced to USD364,865.50.

19     In the (re-re-amended) defence, the defendants contended that they had no privity of contract with the plaintiffs because the vessel was on time-charter. The containers (in which the goods were stuffed) were discharged into the care and custody of the charterers, their servants or agents, who issued the bills of lading relied upon by the plaintiffs. The defendants also relied on the jurisdiction clause in cl 3 of the bills of lading which states:

Any dispute arising under this bill of lading shall be decided in the country where the carrier has his principal place of business, and the law of such country shall apply except as provided elsewhere herein.

They contended that the claim was subject to Danish law as the defendants carried on business in Copenhagen, Denmark, at all material times. If they were found liable under Danish law, the defendants contended that they were entitled to limit their liability under the Hague-Visby Rules made applicable under Danish law.

20     If Singapore law applied (which was denied), the defendants contended that they were only under a duty to take reasonable care of the containers and to deliver the same at Male in the same good order and condition as when shipped which they did. Further, it was a custom and or practice at Male that delivery of the containers to the MPA constituted a discharge of the defendants’ obligations as to delivery. In the alternative, by virtue of cl 4 of the bills of lading, the defendants were not liable for the plaintiffs’ claim.

21     The defendants went on to allege that the plaintiffs had caused another set of the bills of lading to be issued, which set was tendered at Male for delivery of the containers by the receivers, Murex. The plaintiffs had, by reason of their practice and past custom (due to previous dealings with Murex), caused to be issued a second set of the bills of lading. In so doing, the defendants contended, the plaintiffs consented to/had knowledge of/colluded with/assisted Murex to tender the second set of original bills of lading for delivery of the goods without having to make payment to the bank to obtain the first set of the documents. By their acts, the plaintiffs divested themselves of their alleged title in the goods and were no longer entitled to sue. The defendants furnished several particulars of this allegation; they also alleged that the invoices for the goods and the bills of lading were issued to parties other than Murex.

22     In their reply, the plaintiffs contended that the identity of carrier clause (cl 17) of the bills of lading meant that only the defendants would be liable for any damage or loss due to breach or non-performance of any obligation arising out of the contract of carriage. The plaintiffs denied the modus operandi the defendants alleged the plaintiffs had with Murex; they contended that they only discovered in May 1992 that Murex had presented forged bills of lading to obtain the goods, after Murex had stopped paying the plaintiffs for previous orders. The plaintiffs averred they had no prior knowledge of and were not involved in, the fraud perpetrated by Murex. The reason the plaintiffs addressed their invoices to parties other than Murex was because Murex had informed the plaintiffs that for bill amounts in excess of USD15,000 the company would have to open letters of credit. To circumvent that requirement, Murex requested the plaintiffs to address their bills to third parties whose names were furnished by Murex, each in a sum below USD15,000.

23     At this juncture, I should point out that at an earlier stage in these proceedings, the plaintiffs applied to strike out para 4 of the defence which pleaded that the plaintiffs’ claim was time-barred under Danish law. The plaintiffs succeeded in their application on appeal to a judge in chambers and, the defence of time-bar was ordered to be struck out from the defence; this was done subsequently by the defendants.

24     The defendants had issued third party proceedings against the charterers and against Maldives Transport Services Pte Ltd (the second third party) in December 1996. They claimed an indemnity or contribution against the plaintiffs’ claim from the second third party, which is a Singapore company, alleging that the second third party caused to be issued a second set of the bills of lading and or conspired with the plaintiffs to issue the second set which set was used to fraudulently obtain delivery and possession of the goods. Service of the third party notice was never effected on the charterers. On 10 November 1998, the defendants discontinued their proceedings against the second third party and at the commencement of trial, I was informed by counsel for the parties that the defendants had settled their claim amicably with the second third party. On their part, the plaintiffs sued (in Suits Nos 352/95 and 353/95 respectively) the insurers of the goods, namely India International Insurance Pte Ltd and Federal Insurance Co, but the actions were subsequently discontinued without the plaintiffs receiving any payment for their loss.

The evidence

The plaintiffs’ case

25     The plaintiffs called two witnesses to support their claim, namely Darshan and an expert forensic scientist/chemist Siow Kwen Sia (“Siow”); I turn first to Siow’s evidence. Siow was instructed by counsel for the plaintiffs to determine the authenticity of Darshan’s signatures endorsed on the reverse of the second set of the bills of lading presented by Murex for the release of the goods.

26     Siow’s affidavit of evidence-in-chief exhibited (SKS-5) a report of his findings. In his report, Siow stated that he was handed 13 of the (original) bills of lading (which Darshan had retrieved from UCO) as well as 13 photocopies of the (forged) second set of the bills of lading. Apparently, despite the efforts of counsel as well as the attempts made by the plaintiffs’ previous solicitors, neither the plaintiffs nor the defendants received any originals of the second set of the bills of lading from either MPA or Male customs. Indeed my own request to counsel to inform the solicitors for the second third party of the need to borrow one original of the second set of the bills of lading, for purposes of this trial, was also not acceded to by the Maldivian authorities. Hence no originals of the second set of the bills of lading were made available for Siow’s scrutiny or were produced in court.

27     Besides the aforementioned documents, Siow stated that he was also handed the plaintiffs’ invoices containing Darshan’s specimen signatures but without overlapping text, unlike the originals and the second set, of the bills of lading. Siow used microscopes to magnify the various signatures which he later photographed for his analysis. He did a detailed comparison of the signatures on all three documents and concluded that the signatures on the 13 photocopied (second set) bills of lading were of a different authorship from the specimen signatures on the 13 originals.

28     The defendants did not call any comparable expert to rebut Siow’s testimony. Rather, their counsel questioned the conclusiveness of his findings since Siow did not have the benefit of looking at any originals of the second set of the bills of lading. Counsel’s cross-examination elicited the following evidence from Siow:

a       Siow could not tell whether the photocopied signatures had been traced by drawing over an original signature, and

b       Siow could not tell from the photocopies whether there were any indentations, pen pressures, pen stops or pen lifts which suggested that the signatory was forging another person’s signature.

But Siow pointed out that obvious pen stops could be determined from photocopied documents if the signature was a crude forgery done in haste. In this case, Siow said he could not detect any instances of crude forgeries. Siow agreed that a person can deliberately modify his own signature so as to make it look like another person’s signature; however, he pointed out that when a signatory deliberately disguises his signature by modifying it, there would still be similarities of features in the details. He opined that in this case, there were an overwhelming number (23) of different features in detail in the signatures. It was not possible to link the author of the specimen signatures on the original bills of lading to the signatures in the photocopied bills of lading; he was certain that the signatories were not one and the same person.

29     I refer next to Darshan’s testimony. In essence, his evidence-in-chief has already been set out in the facts outlined in paras 3 to 16 above; I therefore turn to the more salient aspects of his evidence adduced under cross-examination.

30     Counsel drew Darshan’s attention to the fact that although the plaintiff’s claim was premised on the goods having been sold to Murex, the invoices for the goods were also addressed to individuals and other companies such as Skerry Maldives Pte Ltd (Skerry), Zakariyaa Jameel, Mohamed Abdul Rahman, Abdul Rasheed Moosa, Moosa Maniku, Modern Traders and Redstar. Darshan explained that the sales were all made to Murex but, because of a Maldivian government regulation that all transactions above USD15,000 had to be done by way of letters of credit (L/Cs), Murex requested the plaintiffs to circumvent that requirement by issuing invoices below that amount to various parties/persons named by Murex. It was up to the plaintiffs to decide which name and what amount, should be inserted in each invoice; Murex remained responsible for payment of the goods. In the course of his investigations, Darshan ascertained that the companies whose names were given to him by Murex did exist. In support of his testimony, Darshan referred to a letter from Murex to the Bank dated 11 August 1991 (carbon-copied to the plaintiffs) wherein Murex advised the Bank that they accepted all D/P bills from the plaintiffs for goods which bore the markings of Skerry and the other names listed above. He testified that the USD15,000 requirement was in effect for 11/2 years and was discontinued thereafter. Darshan denied that in assisting Murex to avoid the requirement of issuing L/Cs, he had helped them to evade payment of import duty for the goods as Murex had alleged; import duty remained payable regardless of the amount stated in an invoice. He pointed out that the plaintiffs’ other customers at that time also requested the plaintiffs to use the same practice of invoicing them for lesser amounts than USD15,000; to-date, those customers did not issue L/Cs for their purchases from the plaintiffs. The forgery in this case was a one-off incident and he had never encountered similar problems with the plaintiffs’ other customers in the Maldives.

31     Darshan agreed that the customers had 14 days from the shipment dates in which to make payment to the plaintiffs, provided they received the original bills of lading from the Bank. On his part, he would either post or hand-deliver (through individuals going to Male) a second set of the bills of lading to Murex. There was normally a delay in the customers’ receipt of the original set of the bills of lading because of the time taken to send the same from UCO Bank to the Bank’s main branch at Male which would then forward the documents to its Bazaar branch where Murex maintained an account. For that reason, it was common practice for consignees to clear their goods by presenting bank guarantees issued by the Bank to the carrier; they would inform the plaintiffs they were doing so. Darshan saw no necessity to obtain copies of the guarantees as the plaintiffs felt that the bank furnishing the guarantee had taken over the responsibility of payment. This was to avoid demurrage and other charges imposed by the carrier for late submission of bills of lading. This method of clearing goods was also practised by the plaintiffs for their own imports into Singapore. Another reason for the delay in payment by the plaintiffs’ customers (some times three to four months) was because the Maldives lacked foreign currency; each company could only purchase USD500 from the country’s monetary authority and the customers had to scout for additional supplies of foreign (usually American) currency from such sources as hotels and resorts. Consequently, as the orders from Murex increased in value (from initial amounts of USD12,000–$15,000) the payments slowed down correspondingly but they continued until November 1991; hence, the plaintiffs had no reason to suspect anything was untoward at the material time.

32     Even so, Darshan said he instructed UCO Bank to chase the Bank when he did not receive payment from Murex by end March 1992. This was evidenced by correspondence commencing from 1 April 1992. Murex’s excuse for not paying was that they did not have enough foreign currency to do so, the local currency (Rufiya) of the Maldives being useless outside the country.

33     Counsel for the defendants drew Darshan’s attention to a letter dated 21 December 1993 from Murex to the plaintiffs (see DB181), signed by Ahmed. In that letter, Ahmed alleged that Latheef and a person called Seedhi had been forced to resign from Murex as they were instrumental in the bankruptcy of the company. The letter further alleged that the plaintiffs had previously consigned goods care of Hussein Jameel’s business and under-invoiced together with system of issue of double original bill of lading which modus operandi was no longer acceptable and would not be continued for future dealings between the plaintiffs and the defendants. Darshan denied receipt of the letter; he testified that he saw it for the first time after the plaintiffs had arrested the vessel and investigators for the defendants visited the Maldives. It was then that Ahmed produced and showed the letter to the investigators.

The defendants’ case

34     I now turn to the testimony of the defendants’ five witnesses. I begin with the evidence adduced from the managing-director of Elite Far East Pte Ltd (Elite) who are the defendants’ Singapore representative. Mogens Andersen (Andersen) confirmed the vessel’s time-charter to MNSL and, that the vessel traded between Male and Singapore on liner service under the orders of MNSL, who were responsible for cargo operation expenses at both loading and discharging ports; the master was obliged to and did sign bills of lading presented by MNSL. In this case, however, the bills of lading were not presented to the defendants/the master for signature — they were signed by Seaward who had no authority to sign for the defendants. There was therefore no privity of contract between the plaintiffs and the defendants.

35     According to Andersen (DW1), at both Singapore and Male, the containers on board the vessel were discharged into the care, custody and control of MNSL. He said the defendants did not deny shipping the plaintiffs’ goods in containers but they had no knowledge of the contents therein. Even so, the goods were discharged (in the same good order and condition as shipped) into the possession and custody of MNSL, according to the vessel’s deck logbook entries which relevant extracts were produced in court (but not the maker). Therefore, the defendants were not liable or responsible for the alleged delivery of the goods without production of the original bills of lading, once delivery was made to MNSL; in the alternative, Andersen relied on cl 4 of the bill of lading. He alleged that according to another witness (Nicholas Mallard), investigations in the Maldives revealed that there was a system in practice whereby consignees would be allowed to take delivery of their cargo without first making payment to the plaintiffs, as the original documents of title would be with a bank in Male.

36     Hassan Maniku (Maniku), the assistant manager of MNSL, confirmed Andersen’s testimony that: (i) the defendants were not involved with the vessel’s cargo operations and were not privy to any of the plaintiffs’ shipments; (ii) Seaward were agents, not of the defendants but of MNSL; (iii) Seaward were authorised by MNSL to sign bills of lading prepared in accordance with mates’ receipts for which purpose MNSL provided a rubber stamp to Seaward for use on bills of lading; (iv) the plaintiffs’ shipments were booked with MNSL through Seaward who issued the 28 bills of lading (in sets of three) in question to the plaintiffs; (v) MNSL did not itself make any endorsement on the bills of lading.

37     Maniku (DW2) testified that once the vessel arrived in Male and its cargo was discharged into the custody of the MPA, the responsibility of MNSL ceased. At the material time, the custom and practice of the port was that the consignee/ receiver will make an import declaration to Male customs and produce the original bills of lading to Male customs and or MPA. Once both authorities are satisfied with the documents produced, the cargo will be delivered to the consignee/ receiver. The system of delivery did not involve either the defendants or MNSL. As far as Maniku was aware from the investigations conducted by his company and according to letters dated 26 and 29 November 1992 from Male customs and MPA respectively, Murex took delivery of the plaintiffs’ goods by submitting the relevant import declaration and producing 28 sets of the (original) bills of lading; MNSL was not privy to the delivery. Maniku also relied on the Statement and Further Statement given by Darshan to Male customs (which copies had been extended to him) to say the authorities were not aware that the bills of lading presented for delivery of the goods were actually forged. It was only some time in 1992 that he became aware of this fact from communication with Darshan. His company commenced investigations after receiving the plaintiffs’ letter dated 22 April 1992 (see AB180) inquiring how and when their goods had been cleared.

38     Cross-examined, Maniku clarified that he had personally experienced taking delivery of cargo from the MPA in 1992, on behalf of friends and relatives. For the past three years, however, the system had been changed and MPA now required delivery orders to be issued to consignees in exchange for bills of lading. He confirmed that no bank guarantee was presented for clearance of the plaintiffs’ goods. If a bank guarantee was to be given in lieu of original bills of lading for release of the goods, Maniku said the sum guaranteed would be twice the value of the goods.

39     The testimony of another witness can be disposed of fairly quickly, that of Rahim Dastager (“Rahim”), the shipping manager of Seaward. Rahim confirmed that his company was the Singapore agent of MNSL, that he signed 23 of the bills of lading issued to the plaintiffs with the remaining five being signed by Yogendran (the accounts manager of Seaward at the material time) and that no draft bills of lading were forwarded to the plaintiffs. Rahim (DW3) said that the plaintiffs were handed the originals of the 28 bills of lading when they surrendered the original mates’ receipts issued for the shipment.

40     Cross-examined on the copies of the bills of lading exhibited in the agreed bundle, Rahim explained that where corrections/amendments were made on the bills of lading, his company would endorse its stamp against the correction/ amendment. Rahim clarified that the shipping details in the bills of lading were prepared by the plaintiffs; Seaward filled in the particulars relating to bill of lading numbers and freight charges. He could not positively identify the signatures in the bills of lading when his attention was drawn to the copies incorporated in the agreed bundle. All he could say was “Looks like mine” when questioned whether the signatures in those copies were his but he was unable to estimate in percentage terms the likelihood of the signatures being his. However, when counsel informed him those copies were from the supposedly forged bills of lading, Rahim immediately said the signatures were not his. Rahim confirmed that his company carried out investigations as to whether any person in the company had assisted in the issuance of the forged bills of lading, by checking with all the staff. However, no police report was lodged by his company in that regard.

41     The defendants also called the director of the International Chamber of Commerce-International Maritime Bureau (“the Bureau”) one Pottengel Mukundan (Mukudan) to testify. Mukundan (DW4) said the Bureau was instructed by the solicitors of India International Insurance Pte Ltd (one of the plaintiffs’ two cargo underwriters) in September 1996 to investigate the circumstances in which the goods under the 28 bills of lading were delivered to the consignees. He personally carried out the investigations for which purpose he visited the Maldives (from 4 to 10 January 1997) and prepared a report (the Report) dated 20 January 1997 thereafter (see exhibit PM1 in his affidavit filed 18 November 1998).

42     In the Report, Mukundan set out the events and documents as told or given to him by people he spoke to in the Maldives; these people were: Ali, Arif (whom he did not meet but spoke to on the telephone), Nasir one of the owners of Lily Store, Munnawar (the Attorney General), Shakur (the deputy Chief of Police), Ali Ahmed (from MPA) and B Ratnam (from the Bank).

43     Based on his investigations, Mukundan concluded that the goods were not stolen as the plaintiffs had claimed. The following paragraphs appeared in the conclusions section of the Report:

3.1         There were different receivers to the twenty three bills of lading, the subject of this investigation. The cargoes referred to in all the bills of lading were in fact imported by Murex who undertook to pay for the cargo on D/P basis through the Bank of Maldives, Male.

3.2         We were advised that Murex was effectively run by Mr Ahmed Arif who ran their relationship with JKT [the plaintiffs].

3.3    A signed statement and letters written by Mr Arif confirm that JKT supplied Murex with a second set of bills of lading enabling them to collect the cargoes from the vessel’s Male agents without paying for the documents lying at the Bank of Maldives. JKT therefore accepted that the cargoes would be collected by Murex without retiring the documents lying with the Bank of Maldives. JKT’s acceptance of this arrangement is evidenced by the fact that the documents sent to Bank of Maldives were retired many months after arrival of the documents there. Normally, JKT would have expected the documents to be retired within fifteen days ie before the discharge of the cargo in Male. This arrangement had been running successfully from 1988 to 1992 and ran into problems only when Murex ran into financial difficulty and was not able to repay the Bank of Maldives.

The dates of the Report and of his arrival in Male confirmed that Mukundan received the above information some four to five years after the events in question had transpired.

44     The last witness for the defendants was Nicholas Henry Mallard (Mallard), the Hong Kong-based solicitor who visited the Maldives in May 1996 and January 1977 to carry out investigations on their behalf. Like Mukundan (with whom he spoke), Mallard prepared a report after his investigations (see exhibit NM1). Similarly, Mallard’s report was based on ex-post facto information he received from various parties including Ahmed, Ali, the Attorney-General, Hussain Jameel (proprietor of HJ Traders), Ismail Saadiq (director of Dharuma Services Co Pte Ltd) and representatives of the Bank.

45     Cross-examined, Mallard testified he saw Ahmed (on two occasions) at Lily Stores, sitting down and using a typewriter there; this fact, however, was not stated in his affidavit evidence-in-chief. Mallard had attached to his report an ‘affirmation’ by Ahmed of how Murex traded with the plaintiffs. That affirmation, however, was not signed before a notary public and or legalised by the Singapore High Commission in the Maldives (if there is one). Neither was Ahmed nor his partners present in court to enable counsel for the plaintiffs the opportunity to cross-examine him on the allegations Ahmed and his partners had made to Mallard regarding the plaintiffs and or Darshan. Accordingly, similar to all the other hearsay evidence/information gathered by Mallard (and admitted as much by him under cross-examination), Ahmed’s allegations have little if any, probative value. Yet, under para (i) of his report, Mallard was able to and did conclude (from information and documents he had gathered from “a variety of sources”)

that they provide corroborative evidence to the initial affirmation of Mr Ahmed Arif and indicate the participation of JK Trading in fraud. The documents indicate that JK Trading participated in fraud upon the banks and fraud upon the Maldives Customs.

The findings

46     A preliminary observation I would make is that, apart from Darshan’s testimony, none of the defendants’ witnesses gave direct evidence of events which transpired at the material time. I had in the preceding two paragraphs already pointed out the almost totally hearsay nature of the testimony of Mukundan and Mallard. Consequently, the defendants were not in a position either to rebut or to contradict Darshan’s version of events as he saw or experienced them. The testimony adduced from the defendants’ aforesaid two witnesses offend ss 61 and 62 of the Evidence Act (Cap 97, 1997 Ed) which state:

61         All facts, except the contents of documents, may be proved by oral evidence.

62(1)         Oral evidence must in all cases whatever be direct —

(a)   if it refers to a fact which could be seen, it must be the evidence of a witness who says he saw that fact;

(b)   if it refers to a fact which could be heard, it must be the evidence of a witness who says he heard that fact;

(c)   if it refers to a fact which could be perceived by any other senses or in any other manner, it must be the evidence of a witness who says he perceived that fact by that sense or in that manner;

(d)   if it refers to an opinion or to grounds on which that opinion is held, it must be the evidence of the person who holds that opinion on those grounds.

47     On the meaning of hearsay or second-hand evidence, the learned authors of Ratanlal and Dhirajlal’s The Law of Evidence (18th ed, 1992) has this to say (at p 186):

The term hearsay is used with reference to what is done or written as well as what is spoken, and, in its legal sense, it denotes that kind of evidence which does not derive its value solely from the credit given to the witness himself, but which rests also, in part, on the veracity and competence of some other person. That this species of evidence is not given upon oath, that it cannot be tested by cross-examination, and that in many cases it supposes some better testimony which might be adduced in the particular case, are not the sole grounds for its exclusion. Its tendency to protract legal investigations to an embarrassing and dangerous length, its intrinsic weakness, its incompetency to satisfy the mind of the existence of the fact, and the frauds which may be practised with impunity under its cover, combine to support the rule that hearsay evidence is ‘inadmissible’. The word ‘hearsay’ is used in various senses. Sometimes it means whatever a person is heard to say; sometimes it means whatever a person declares on information given by some one else; sometimes it is treated as nearly synonymous with ‘irrelevant’.

Consequently, as was stated by counsel for the plaintiffs in his closing submissions, all the information (and documents) received by Mukundan and Mallard in their trips to the Maldives is inadmissible as evidence and their reports based on those sources cannot be accepted; their reports were also not contemporaneous. As counsel for the defendants did not address me on the exceptions to the hearsay rule found in s 32 of the Evidence Act, I need not consider them.

The issues

48     Apart from the above deficiency, the testimony of the defendants’ other two witnesses, namely Maniku and Rahim, was not helpful in determining the main issue which is: was the contract of carriage as evidenced by the bill of lading between the defendants and the plaintiffs? If not, the plaintiffs’ claim ends there and the other issues arising from delivery of the plaintiffs’ goods to Murex (without presentation of the original bills of lading held by the Bank) become academic. If there was privity of contract between the parties, the next issue which arises for determination is, whether the defendants are nevertheless discharged from responsibility for the alleged misdelivery of the goods by reason of cl 4 of the bill of lading; in that connection cl 17 of the bill of lading also has to be considered.

The decision

49     In order to determine the main issue, it is necessary to look at one of the bills of lading (see exhibit P1) issued by Seaward at the material time. The bill of lading was headed “Liner Bill of Lading” and was stamped with the chop of MNSL. As stated earlier, Seaward signed the same “As Agent only” under their own rubber stamp. There was no indication of the status or capacity of MNSL on the bill of lading. However, a reasonable and logical interpretation by anyone looking at the bill of lading is that Seaward must be the agent of MNSL although MNSL’s own status is not apparent. How then would MNSL be regarded by anyone who holds or is an endorsee of, the bill of lading? It would be natural for the holder/endorsee to look at the printed conditions on the reverse of the bill of lading for some guidance.

50     We start with cl 17 of the bill of lading which states:

Identity of carrier

The Contract evidenced by this bill of lading is between the Merchant and the Owner of the vessel named herein (or substitute) and it is therefore agreed that said Shipowner only shall be liable for any damage or loss due to any breach or non performance of any obligation arising out of the contract of carriage, whether or not relating to the vessel’s seaworthiness. If, despite the foregoing, it is adjudged that any other is the carrier and or bailee of the goods shipped hereunder, all limitations of and exonerations from, liability provided for by law or by this Bill of Lading shall be available to such other.

It is further understood and agreed that as the Line Company or Agents who has executed this Bill of Lading for and on behalf of the Master is not a principal in the transaction, said Line Company or Agents shall not be under any liability arising out of the contract of carriage nor as Carrier nor as bailee of the goods.

Under the definition section in the bill of lading, the word “Merchant” was deemed to include the shipper, the receiver, the consignee, the holder of the bill of lading and the owner of the cargo.

51     Before proceeding further, I wish to first revert to the particulars of the defendants’ allegation set out in para 21 above. In para 7 of the (re-re-amended) defence, the defendants alleged that it was the modus operandi between the plaintiffs and Murex that the former would cause a second set of original bills of lading to be issued to the latter although the first set had already been handed to the Bank. The second set would then be tendered to the carriers by Murex for delivery of the goods. By doing so, Murex was allowed to take delivery without having to make prior payment to the Bank for the first set of the bills of lading. The D/P terms of payment were never enforced by the plaintiffs who as a norm, allowed Murex time up to six months to effect payment. Further, in order to avoid any suspicion, Murex also instructed the plaintiffs in various transactions to address the invoices and bills of lading to other parties namely Moosa Maniku, Skerry Maldives Pte Ltd, Zakariya Jameel, Ibrahim Rasheed and Mohamed Abdul Rahman. The defendants alleged that for this particular shipment, Murex took delivery of the goods without payment as per past practice but Murex ran into financial difficulties and failed to make payment eventually. Accordingly, the defendants denied that the plaintiffs’ loss was caused by any act of the defendants, their servants or agents.

52     I had, in para 46, pointed out the inherent weakness in the defendants’ evidence. They did not or could not call direct testimony on the modus operandi of the dealings between the plaintiffs and Murex. Consequently, their allegation in para 7 of the defence (which was disputed by the plaintiffs in their rejoinder) was not substantiated. I go further to add that it was also effectively rebutted by the testimony of Darshan who I believe was a truthful witness.

53     I turn now to the crucial question, who did the plaintiffs contract with? Before that question can be answered, some of the authorities cited by the parties have to be looked at. I start with the most recent case namely The Flecha; Fetim BV v Oceanspeed Shipping Ltd [1999] 1 Lloyd’s Rep 612, which report was drawn to my attention by counsel for the plaintiffs after the parties had concluded their final submissions.

54     In that case, the bills of lading for a cargo of forest products shipped from Far Eastern ports to Rotterdam were issued by the charterers, Continental Pacific Shipping Ltd (“PSL”) who had time-chartered The Flecha (“the vessel”) from the shipowners (“the defendants”) for a trip from Indonesia to the United Kingdom and the Continent. Damage was caused to some parcels of the cargo during the voyage and the cargo-owners commenced proceedings in England against the vessel and effected service on the defendants’ solicitors. They then applied for and was granted leave to serve a concurrent writ out of the jurisdiction on the defendants in Cyprus and Greece. The defendants applied to set aside the order for service outside the jurisdiction. The issue for determination was whether as a matter of construction, the bills of lading were owners’ or charterers’ bills of lading. The three forms of signatures in the bills of lading (which were all in the same terms) are as follows:

(i)         Multiport Sdn Bhd … as agents for Continental Pacific Shipping as carriers;

(ii)         PT Pakarti Tata … as agents for the carrier Continental Pacific Shipping;

(iii)         Likas Shipping Sdn Bhd … as agent for the carrier Continental Pacific Shipping.

55     The following clauses in the bills of lading were considered of particular importance by Moore-Bick J:

Identity of carrier

33         The contract evidenced in this bill of lading is between the merchant and the owner of the vessel named therein (…) and it is therefore agreed that the said shipowner only shall be liable for any damage or loss due to any breach or non-performance of any obligations arising out of the contract of carriage whether or not relating to the vessel’s seaworthiness. If, despite the foregoing, it is adjudged that any other is the carrier or the bailee of the goods shipped hereunder, all limitations of and exonerations from liability provided for by law or by this bill of lading will be available to such other. It is further understood and agreed that the line, company or agent who has executed this bill of lading for and on behalf of the master is not a principal in the transaction. Said line or company or agent shall not be under any liability arising out of the contract of carriage, not as carrier or bailee of the goods.

35     If the ocean vessel 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 of carriage with owners or demise charterers as the case may be as principal made through the agency of the said company or line who act solely as agents and shall be under no personal liability whatsoever in respect thereof.

56     Moore-Bick J held that for purposes of service outside jurisdiction within the provisions of O 11 r 1(1)(d) of the Rules of the Supreme Court, the plaintiffs had established a good arguable case for the following reasons:

(1)         the bill of lading was on the form of Continental Pacific Shipping; it plainly contemplated that the contract would be a contract between the owner of the goods and the owner of the vessel; the forms of signature taken by themselves might well suggest that the time charterers were contracting as carriers; but if the contract was looked at as a whole and in its wider context it was plain that this was a case in which the contract as set out in the printed form was intended to be a contract between the owners of the vessel and the owners of the goods;

(2)         the charter-party gave the charterers the right to determine the form of the bills of lading and, if necessary, to sign them on behalf of the owners; it contemplated that the time charterers would bring into existence bills of lading contracts which bound the owners of the vessel and that was reflected in turn in the terms of the bills of lading; and the attestation clause contemplated that the Master would sign on behalf of his owners;

(3)         cl 33 stated that the contract evidenced by the bills of lading was between the merchant and the owner of the vessel and further stated that the company who had executed the bill for and on behalf of the master was not a principal in the transaction; cl 35 reinforced that; and in the circumstances it was plain that the terms of the bills of lading as a whole contemplated a contract of carriage between the owners of the vessel and the owners of the goods;

(4)    if it were the intention of the shipping line to undertake personal liability for the carriage of the goods in contradiction to what was stated in the bills of lading terms something far clearer would be required in order to bring that about; the forms of signature while they raised questions of describing Continental Pacific as carriers did not go far enough to make it clear that the parties intended that Continental Pacific were contracting in place of the owners contrary to all the terms of the bills of lading;

(5)         on the true construction of these bills of lading they contained or evidenced contracts between the plaintiffs the owners of the goods and the defendants the owners of the vessel; and the application to set aside the order giving leave to serve out of the jurisdiction failed.

The court in The Flecha had referred to another case cited by counsel for the plaintiffs in these proceedings and I turn to that case The Ines [1995] 2 Lloyd’s Rep 144 now.

57     The vessel The Ines owned by the first defendants had been time-chartered out to the second defendants. Containers of telephones shipped from Hong Kong by the plaintiffs to Antwerp and from there to St Petersburg, arrived at the latter port and were discharged by stevedores (“CSP”) employed by the charterers (“Maras Linja”). The master of the vessel had not insisted on the presentation of an original bill of lading before delivery took place and release of the consignment to the notify party (“Rusworld”) was without the plaintiffs’ consent. The bill of lading contained the printed words ‘Signed as agents for the carrier Maras Linja’ and the typed words “pp Eimskip – Rotterdam” “as agents only”. The plaintiffs claimed damages in respect of the alleged misdelivery of the telephones; they argued that there was a misdelivery in breach of the contract contained in or evidenced by the bills of lading and that they had suffered loss as a result.

58     The first defendants denied liability contending that the second defendants were the contractual carriers. They further sought to rely on cll 3,5 and 7 of the bills of lading contending that the effect of these clauses was that the responsibility of the carrier was to cease on discharge and that any loss caused by any event occurring thereafter was not recoverable, and the misdelivery occurred some days after discharge. The defendants submitted that the CSP were the agents of the plaintiffs and that any misdelivery was not effected on behalf of the carrier. The plaintiffs claimed against the charterers in bailment.

59     Clause 3 of the bill of lading headed “Period of Responsibility” was in terms similar to cl 4 of our bill of lading (infra). Other relevant clauses are as follows:

5         Forwarding, Substitute of vessel, through cargo and transshipment

… the Carrier to be at liberty to … store the goods … on shore … The responsibility of the carrier shall be limited to the part of the transport performed by him in a vessel under his management and no claim will be acknowledged by the carrier for damage or loss arising during any other part of the transport …

7         Reception of the goods

(a)         The Receiver … must be ready to take delivery of the goods as soon as the vessel is ready to unload …

(b)         Receiver cannot demand delivery of goods direct from ship without special agreement …

(c)         General local clause Landing … of the goods direct to be arranged by Carrier’s agents for the risk and expense of the Shipper whether delivery is taken overside or on the quay.

19         Responsibility when joint service

The contract evidenced by this bill of lading is between the Shipper and the Owner of the Ocean vessel named herein….and it is therefore agreed that the said shipowner only shall be liable for any loss, damage … arising or resulting …

Clause 9 of the charterparty provided:

… The Charterers to indemnify the Owners against all consequences or liabilities arising from the Master, Officers or Agents signing Bills of Lading … or otherwise complying with such orders.

60     On the issue who were the parties to the contract of carriage, Clarke J ruled that the contract was made on behalf of the shipowner by Eimskip as agents for Maras Linja the charterers; the charterers had authority to sign bills of lading on behalf of the shipowners under the charterparty, it being implicit in cl 9 that the charterers or their agents had such authority (citing The Berkshire [1974] 1 Lloyd’s Rep 185).

61     Clarke J inter alia held:

i         although the signature box itself was ambiguous a consideration of the other clauses and the documents as a whole led to the conclusion that the parties intended that the contract should be between the shippers and the shipowners; the parties to the contract of carriage contained in or evidenced by the bills of lading were the plaintiffs on the one hand and the owners on the other; the plaintiffs, their (Antwerp) agents Meyer and the charterers’ agents Eimskip initially intended that the contract should be with the owners; these were owners’ and not time charterers’ bills of lading;

ii         there was no misdelivery so long as CSP held the goods to the order of the owners or the charterers; the time when the presentation of an original bill of lading would be expected in the ordinary course of events was when the CSP released the goods; on the facts that occurred on Nov 9 when the cartons were released by CSP to Rusworld; the misdelivery occurred at that time;

iii         none of the words in any of the clauses relied on were sufficient to excuse misdelivery of the goods after discharge; cl 3 appeared to be concerned with loss of or damage to the goods and might well include the case where the goods were stolen but it was not concerned with misdelivery; the same was true of cl 5; and there was no hint in the wording of cl 7 that, whether delivery was taken direct from the ship or from the quay, the carrier was to be entitled to deliver otherwise than in return for the original bill of lading or even that he was not liable if he did so; although the plaintiffs were in breach of cl 7 because they were not ready to take delivery as soon as the vessel was ready to discharge, any loss suffered by them was not caused by that breach but by the delivery to Rusworld without presentation of an original bill of lading;

iv         the provisions in the contract (especially cl 3) should be construed as not excluding the responsibility of the shipowners where they or their agents misdelivered the goods regardless of whether they did so in deliberate and conscious disregard of the rights of the plaintiffs; the shipowners were not protected by any of the terms of the bill of lading relied on;

62     Both The Flecha and The Ines had referred to an earlier case The Berkshire [1974] 1 Lloyd’s Rep 185 which authority was also relied on by the plaintiffs. In that case, the shippers (the first plaintiffs) shipped bales of cotton from Houston to receivers (the second plaintiffs) at Massawa, Ethiopia. The goods were carried on the vessel Lancashire which was time-chartered by the shipowners (the defendants) to a Chicago company. The bill of lading issued by the charterers’ agent (and signed by the subagent) stated:

If the ship is not owned or chartered by demise to the company or line to whom the bill of lading is issued … the bill of lading shall take effect as a contract with the owner … 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.

Clause 1 of the bill of lading incorporated the provisions of the United States Carriage of Goods by Sea Act 1936 and continued:

… The carrier shall not be liable for any delay non-delivery or misdelivery or loss of or damage to the goods occurring while the goods are not in the actual custody of the carrier.

Clause 11 of the charterers’ bill of lading provided:

Whenever the goods are consigned to a point where the ship does not expect to discharge the carrier or master may without notice forward … the goods … by any vessel … whether operated by the carrier or others … This carrier in making arrangements for any transshipment … shall be considered solely the forwarding agent of the shippers and without any responsibility whatsoever …

63     The Lancashire left Houston for Massawa but on the charterers’ instructions, the goods were discharged at Jeddah and transhipped in another vessel (not owned by the defendants) for on-carriage to and delivery at, Massawa. On arrival at Massawa, the goods were found to be damaged by seawater and the second plaintiffs claimed damages for breach of contract. The defendants denied liability.

64     Brandon J awarded judgement to the second plaintiffs and held inter alia that the bill of lading contained or evidenced a contract between the shippers and the shipowners (as the time-charterers had authority to sign on behalf of the shipowners). Therefore, the second plaintiffs (as receivers) were entitled by virtue of s 1 of the Bills of Lading Act 1855 to sue the defendants under that contract.

65     The wording of our cll 3 and 17 is in pari materia with those found in the bills of lading in the cases cited above. Therefore, although I am not bound to follow their rulings, I find that the three authorities are highly persuasive. Reading our cl 17 with the definition of “merchant” in the bill of lading, it would mean that the contract of carriage was between the plaintiffs and the carrier. The question which then arises is, who is the carrier? The word is not defined in the bill of lading. Is it the defendants as the plaintiffs contended or, as the defendants contended, MNSL whose name (not the defendants) appears on the bill of lading? To answer that question, it is necessary to revert to the three cases cited.

66     I am mindful that the factual matrices in those cases differ from our case — in The Flecha Moore-Bick J had to determine whether the plaintiffs had established they had a good arguable case under RSC O 11 of the English Rules. Unlike The Ines and The Berkshire, there is no transhipment involved in our case. However, leaving aside the particular factual matrix of each case, the factor common to the cases and ours is, that the bills of lading in dispute were issued by or on behalf of charterers and signed by their agents (or sub-agents) notwithstanding which, the English courts held that the contracts of carriage were made between the shipper/consignee of the goods and the shipowners.

67     In our case cl 4 of the bill of lading states:

Period of Responsibility

The carrier or his agent shall not be liable for loss of or damage to the goods during the period before loading and after discharge from the vessel, however such loss or damage arises

The relevant portion of cl 8 of the bill of lading states:

Loading, Discharging and Delivery of the cargo shall be arranged by the Carrier’s agent unless otherwise agreed. Landing storing and delivery shall be for the Merchant’s account. Loading and discharging may commence without previous notice …

I have said (para 59) that the wording of our cl 4 is also in pari materia with that found in the three cases. Consequently, and unless some other provision(s) in the bill of lading exempt the defendants, I concur with the ruling of the English courts that cl 4 would not allow the shipowners to escape liability for the cargo-owners’ claim — the clause covers loss or damage to the goods after their proper discharge from a vessel and do not cover misdelivery of the goods to a party (Murex) who obviously did not tender the original bills of lading. My view is reinforced by cl 17 of the bill of lading which made it clear that regardless of who had issued or signed the bill of lading, … “said shipowner only shall be liable for any damage or loss due to any breach or non performance of any obligation arising out of the contract of carriage (emphasis added)”. Nothing could be plainer than that to say that the defendants not MNSL, should be liable for any claims arising out of the contract of carriage.

68     In his testimony, Andersen for the defendants had said that Seaward was not authorised to sign bills of lading on the shipowner’s behalf. That may well be the case but Andersen had also testified that under the terms of the charterparty (see cl 8), the master was obliged to sign bills of lading presented by the charterers. If the master, employed by the defendants was authorised to sign bills of lading for and behalf of MNSL which at law, would bind the defendants as the carrier, I can see no distinction between that and MNSL issuing and signing their own bills of lading or, authorising their agent (Seaward) or even sub-agent to sign the same — why should the defendants not be similarly bound in the latter scenario? In interpreting the exact same cl 8 in The Berkshire, Brandon J (at p 188) had arrived at the same conclusion. Andersen had also testified that the containers in which the plaintiffs’ goods were stuffed had been discharged into the care, custody and control of MNSL with which delivery the defendants were discharged from liability. I do not agree with his view as cl 8 of the bill of lading states “… discharging and delivery of the cargo shall be arranged by the Carrier’s agent (emphasis added)” which would mean that MNSL acted as the defendants’ agent in the discharge and delivery operation.

69     Maniku had testified that MNSL’s responsibility ceased once the goods were discharged from the vessel into the custody of the MPA (the Male Port Authority) from whom Murex took delivery to which MNSL was not privy. However, Maniku himself was not involved in either the discharge operation from the vessel or in the delivery operation of the goods to MPA. He claimed to speak from his personal experience in having taken delivery of cargo from the MPA in 1992, on behalf of friends and relatives. No documents were produced by MNSL to support Maniku’s testimony that the goods were discharged from the vessel into the custody of MPA. As for discharge from the vessel, although the deck log entries of the vessel relating to the operation were exhibited in his affidavit and the originals thereof produced in court during Andersen’s testimony, the crew members who supervised or did, the actual unloading of the containers were not called as witnesses. There was no direct evidence adduced by the defendants on how the containers with the (plaintiffs’) goods ended up with the MPA. Further, no one from the MPA or Male customs was called to testify. This was another telling omission as, from the correspondence in the agreed bundle, there appeared to be disagreement between the two authorities as to who had received the goods from MNSL and released the same to Murex, although the fact of the release was not disputed.

70     I am therefore of the view that on the evidence, the plaintiffs had proved, on a balance of probabilities, that MNSL wrongfully delivered their goods to Murex for which act the defendants are liable as, the contract of carriage was made with the latter. I should add that it is unlikely Murex would have been able to obtain delivery of the goods (against presentation of undoubtedly forged bills of lading) without the co-operation of either Male customs or the MPA. There is also the unanswered question of how Murex managed to procure Seaward’s rubber stamps on and, the second set of, the bills of lading in order to forge Darshan’s signatures thereon. In this regard I accept without hesitation Siow’s testimony that Darshan did not sign the second set of the bills of lading. The unanswered question, however, does not concern the plaintiffs who I am satisfied, were innocent   of anyfraudulent conduct despite allegations to that effect by Murex and the defendants’ various investigators. It bears mentioning that the defendants, pursuant to their rights under the charterparty, could have sought recourse against and an indemnity from MNSL for the plaintiffs’ claim in the third party proceedings they instituted; for their own reasons they chose not to pursue those rights.

71         Accordingly, I award the plaintiffs judgment on their claim in the agreed reduced amount of USD364,865.50 with interest thereon at 6% per annum from the date of the writ (28 September 1992) until judgment, and costs on a standard basis

Plaintiffs’ claim allowed.

Reported by Dawn Tan Ly-Ru