#5086 - The Indian Grace - Conflict of Laws BCL

The Indian Grace

Facts

The plaintiffs claim to be entitled to sue for damage suffered by a consignment of munitions carried on board the defendants' vessel Indian Grace on a voyage from Uddevala in Sweden to Cochin in India between 26 June and 4 September 1987. The munitions were loaded in No. 3 hold, above wood pulp destined for other consignees. On 1 July, a fire was discovered in No. 3 hold; this was extinguished with water. The vessel put in to Cherbourg for survey, and to repack and restow the cargo in No. 3 hold. At about this time a small number of artillery shells, probably 51, were jettisoned as damaged. In addition, compression damage to some of the boxes of munitions was noted. This was caused by the swelling of the wood pulp in the hold after it had been flooded with water.

The vessel resumed her voyage to India on 6 August 1987, arriving at Cochin in early September, and the cargo was cleared by 4 September. The plaintiffs contend that they have not only lost the shells jettisoned and those damaged by crushing in the hold, but that they have also lost the value of the remaining munitions because of the effect of radiant heat upon them. It is accordingly contended that the cargo was a total loss.

Claim in Cochin: On 1 September 1988, the Union of India as plaintiff represented by the Madras Commandant issued a plaint in the subordinate judge’s court in Cochin, India, seeking damages for the 51 shells which were not delivered. By paragraph 4 of the plaint the plaintiff purported to confine the suit to a claim for Rs. 189,508.67 in respect of the 51 shells only. No application was made to amend the pleadings to bring forward a larger claim. This suit came on for final hearing on 7 December 1989, and judgment was given on 16 December 1989 by the Principal Sub-Judge in the subordinate judge's court, Cochin. The plaintiff was awarded the full amount of its claim against the defendants. The defendants have appealed against this judgment, and the appeal is still pending in India.

Claim in England: The statement of claim was served on 25 May 1990. In its original form, it makes claim for the total loss of the munitions cargo, including the 51 shells and 10 charges which had been the subject of the action in Cochin. The defence was served on 16 August 1990 and, in its original form, it pleaded issue estoppel as a defence to the claim, upon the ground that the plaintiffs were capable of bringing the whole claim in Cochin but decided not to do so.

Holding

Lord Goff

Doctrine of Merger and Section 34

The principle, which is sometimes called the doctrine of merger in judgment, is that a person in whose favour an English judicial tribunal of competent jurisdiction has pronounced a final judgment . . . is precluded from afterwards recovering before any English tribunal a second judgment for the same civil relief in the same cause of action.

This is because, whereas it has been recognised that the judgment of a non-English court may give rise to a cause of action estoppel where the judgment is in favour of the defendant and more recently to an issue estoppel nevertheless such a judgment, in favour of the plaintiff, did not at common law constitute a bar against proceedings in England founded upon the same cause of action. This was because the principle of merger in judgment did not apply in the case of a non-English judgment. It was to remove this anomaly that section 34 of the Civil Jurisdiction and Judgments Act 1982 was enacted.

Was there identity of causes of action?

The argument advanced by the plaintiffs before your Lordships was that, for the purpose of ascertaining whether there was identity between the causes of action in the two sets of proceedings, a distinction had to be drawn between an action for damage to cargo (as in the present proceeding) and an action for short delivery (as in the Cochin proceedings). The submission was that, in accordance with the principle stated by Diplock L.J. in Letang v. Cooper [1965] 1 Q.B. 232, 243, a cause of action consists of the minimum facts which a plaintiff is required in law to plead and (if traversed) prove in order to obtain the relief which he claims. The minimum facts which, it was submitted, have to be proved in a damage to cargo claim are (1) the condition of goods on shipment and (2) their damaged condition on delivery; whereas in a short delivery claim they are (1) the quantity of the goods shipped and (2) the lesser quantity delivered. It follows, ran the submission, that there was no identity between the causes of action in the two sets of proceedings.

Now the difficulty with this argument is that it ignores the fact that the goods in question were shipped under a contract of carriage the terms of which (as set out in the Hague Rules or the Hague-Visby Rules) regulate the respective rights and obligations of the parties. In these circumstances, the mere fact that the pleader can, so to speak, get the case on its feet by alleging short delivery or delivery of the goods not in the like good order and condition as when shipped, does not in my opinion assist. For it is wholly unrealistic to regard the cause of action as being other than a cause of action arising under the contract, which provides for the relevant duties of the shipowners regarding the seaworthiness of the ship and the care of the goods. Even if attention is concentrated on the liability of the shipowner as bailee, the fact remains that he is a bailee for reward, and that accordingly his liability will be governed by the terms of the contract of carriage. In these circumstances, the case is very different from a simple action in negligence, as for example a running down action, where damage is of the essence of the claim in the sense that damage must be proved to establish the cause of action.

The present case is not concerned with the failure to construct a building in accordance with a certain specification, which can result in a whole series of defects which may nevertheless lead to a single breach of contract, i.e., the failure to hand over the building constructed in accordance with the terms of the contract. It is rather concerned with a single incident, i.e., the fire during transit which broke out in the cargo over which the plaintiffs' consignment of munitions was stowed, which resulted in the damage to that consignment and to loss (by jettison) of a small part of it. Furthermore, as appears from the pleadings, that loss or damage might have resulted from breach of more than one term of the contract, for example breach of the obligation to make the vessel seaworthy under article III, rule 1, of the Hague-Visby Rules, or breach of the obligation to load and stow, etc., the vessel carefully under article III, rule 2. However, for present purposes, there is no need to distinguish between the two breaches; because the factual basis relied upon by the plaintiffs as giving rise to the two breaches is the same, and indeed was referred to compendiously by the plaintiffs in the Cochin action as 'negligence.' In...