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In re Complaint of Singapore Navigation Co.

decided: July 15, 1976.

IN THE MATTER OF THE COMPLAINT OF SINGAPORE NAVIGATION COMPANY, S.A., AS OWNER OF THE STEAMSHIP SINGAPORE TRADER AND CHINA MARINE INVESTMENT CO., LTD. AND CHINA OVERSEAS NAVIGATION CO., LTD., PLAINTIFFS, FOR EXONERATION FROM OR LIMITATION OF LIABILITY. SINGAPORE NAVIGATION COMPANY, S.A., CHINA MARINE INVESTMENT CO., LTD., CHINA OVERSEAS NAVIGATION CO., LTD., PLAINTIFFS-APPELLANTS,
v.
MEGO CORP., ET AL., JOSEPH MARKOVITS, ET AL., UNITY SEWING SUPPLY CO., ET AL., INTERNATIONAL SEAWAY TRADING CORP., ET AL., KATONE CORP., ET AL., SPARTAN INDUSTRIES, ET AL., ALSTER IMPORT CO., LO-E MANUFACTURING CORP., CARGO CLAIMANTS-APPELLEES



Appeal from an order of the United States District Court for the Southern District of New York, Charles L. Brieant, Judge, holding the owner of the SINGAPORE TRADER liable for damages to cargo resulting from an unreasonable geographic deviation and denying exoneration from such liability or for general average contribution.

Moore, Oakes and Meskill, Circuit Judges. Oakes, Circuit Judge, dissenting.

Author: Moore

MOORE, Circuit Judge:

In early October, 1971, Singapore Navigation Company, S.A., (the Shipowner), owner of the steamship SINGAPORE TRADER (TRADER), was faced with a problem and a difficult decision. TRADER had sailed from Hong Kong on August 22, 1971, bound for New York, laden with a cargo of 74,641 paper cartons, consisting primarily of Christmas goods destined for the 1971 Christmas market in New York. This cargo was covered by 472 bills of lading. At the time of sailing, there was a possibility that a strike on the West Coast by the International Longshoremen's Association (ILA) might spread to the East. In anticipation of this contingency, a handstamp was superimposed on the front of each bill reading as follows:

"ALL U.S.A. CARGO WILL BE DISCHARGED AT THE NEAREST NON-U.S. PORT(s) IN EVENT OF THE LONGSHOREMEN STRIKE AT THE U.S. EAST COAST CONTINUES AND CARGO FROM SUCH DISCHARGING PORT(s) TO BILL OF LADING DESTINATIONS ARE AT THE COST AND RISK OF CARGO."

The TRADER arrived in New York (actually at a pier in Brooklyn) and commenced unloading its cargo on September 28, 1971. When only some 15-20% of the cargo had been unloaded, a strike possibility materialized and forced a cessation of work at midnight on September 30, 1971. At this point, the Shipowner had to look to the bills of lading which covered the cargo for its contract obligations. The handstamp read "All U.S.A. cargo will be discharged at the nearest non-U.S. ports" in event of a strike; the bill of lading (clause 5) in its printed form, read, in substance, that if discharge were impeded by a strike "the carrier and/or his agents and/or the master may (if in his or their uncontrolled discretion he or they think it advisable) at any time" alter or depart from the agreed route. Query: did the handstamp supplant clause "5"; did it merely give the Shipowner additional rights, namely to proceed to non-U.S. ports; and was it mandatory or discretionary?

The nearest non-U.S. ports were Canadian. The Shipowner's agent Gannet Freighting Inc. of New York, which, with the assistance of Colley Motorships Ltd. of Montreal, had canvassed the Canadian situation, advised the Shipowner that the ports of St. John, Halifax, Quebec and Montreal were ILA controlled and hence, would be unavailable for the discharge of cargo from a runaway ship*fn1 such as the TRADER. As a consequence, Gannet advised the Shipowner to proceed to Detroit, a non-ILA port, where adequate facilities existed for the immediate discharge and delivery of the cargo and where it had made appropriate arrangements for the TRADER. Gannet gave this recommendation on October 6, 1971, the Shipowner confirmed the Detroit arrangement on October 7, 1971, and the TRADER left New York for Detroit on October 8, 1971. Arrival after a stop in Montreal was estimated to be October 16, 1971.

All would have gone well, and the Christmas trees and decorations would have appeared in countless homes in the New York area at that festive season, but for the grounding of the TRADER in the early morning of October 15, 1971, while proceeding through the St. Lawrence Seaway en route to Detroit on a shoal outside of the channel and in the vicinity of Clayton, New York. The court's finding of negligent navigation is clearly supported by the evidence.

The other issues before the Court arise out of the claim of the cargo owners that in proceeding towards Detroit, the TRADER was guilty of an unreasonable deviation. Resolution of this question calls for answers to two questions: (1) was there a deviation and (2) if so, was it unreasonable?

(1) The voyage contemplated was from Hong Kong to New York, where the cargo normally would be discharged. However, the parties themselves provided for the contingency of a strike. If there were a strike, the printed clause 5 on the back of the bill gave the Owner and Master broad discretion to "abandon" or "suspend the voyage" or to depart from the customary route. Were there no other provisions our review would focus upon the exercise of that discretion. However, the parties endeavored to cover the strike contingency by creating a special clause superimposed on the bill by the handstamp. Even this clause presents a problem. Does "will" mean "must", as claimants argue, or is it merely permissive and but an extension to non-U.S. ports of the discretion given in clause 5, as the Shipowner argues. If "non-U.S. port[s]" was not mandatory, Detroit, ready, able and willing to receive the TRADER, should have been a satisfactory solution. In fact, the Court recognized that "discharge at Detroit fulfilled the ordinary condition of a bill of lading 'liberties clause' in that it was indeed among the best available safe and convenient ports ".

(2) Was the deviation unreasonable? Obviously, some deviation was necessary if the cargo were to be unloaded. "Nearest Non-U.S. port[s]" could only mean Canada. The trial concentrated almost entirely on where in Canada the TRADER could not have discharged its cargo. Knowledgable witnesses concurred that the ILA strike would have affected normally available ports such as Saint John, Halifax, Quebec and Montreal,*fn2 and that cargo could not have been discharged there. With this conclusion the trial court agreed and its findings are based upon adequate proof.

Towards the end of the trial and after four witnesses had testified and pre-trial testimony of five witnesses had been read, the testimony of the manager of Valleyfield Dock & Terminal Co., Ltd. was read. Valleyfield is a small Canadian non-ILA port a short distance from Montreal. It had the physical facilities to accommodate the TRADER, two sheds were avilable, one empty, the other substantially empty. Two general cargo ships could be handled. The labor force was adequate. Fifteen truck lines and two rail lines served the port.

However, Valleyfield was practically a forgotten port (at least by the parties here) until elevated out of its obscurity by the cargo claimants "motivated by retrospective vision and the infelicitous fact of stranding in asserting their rights to object to the deviation as unreasonable." (App. p. 117a) However, "hindsight" the progenitor of ...


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