The case of Chellaram and Sons (London) Ltd. v. Butlers Warehousing and Distribution Ltd. has come to judgment in the Court of Appeal.1 The facts of the case and the first instance judgment of Mr Justice Mocatta2 have already received comment in a previous issue of this journal.3 The reversal of that judgment by the Court of Appeal will be of interest to many in the fields of transport and warehousing.

The plaintiffs were an export house involved in buying goods in this country for export. In this case they were attempting to export certain of their goods to Nigeria and had made arrangements for their transportation with the African Container Line (AFCL), a firm of container operators. The defendants were owners of an Inland Clearance Depot (ICD) with whom AFCL had sub-contracted for the packing of the goods into containers ready for subsequent shipment by AFCL.

The normal arrangement was for the plaintiffs, through their forwarders—Alltransport Ltd.—to call forward goods from their sellers and have them sent to the ICD. The defendants at the ICD would then inform AFCL of the arrival and obtain instructions. AFCL had in this way handled a number of the plaintiffs’ shipments.4

The trouble which arose in this case originated with the congestion of the port of Lagos during 1975, the result of this congestion being that AFCL were unable to bring back to this country ships which they had chartered to carry cargoes to West Africa and, accordingly, goods which they had ordered here for shipment began to pile up at various places including the defendants’ ICD.

In the process AFCL had run up a debt to the defendants of £48,000. The defendants sought to exercise a right of general lien contained in their contract with AFCL. The operators went bankrupt and so the defendants sought to continue to exercise that lien against the plaintiffs’ goods which were in their possession.

They did not seek to recover the sole debt from the plaintiffs. They sought to require payment, first, of a sum related to the actual costs incurred in respect of the plaintiffs’ goods and over which they claimed a particular lien, and second, a proportion of AFCL’s debt based on the weight of the plaintiffs’ goods relative to other goods in the defendants’ possession through AFCL. It was over this sum that they claimed they were entitled to exercise a general lien. This they based on their contract with AFCL, the terms of which were set out in the General Conditions of Contract of the National Association of Warehousekeepers, in particular cl. 8 which provided for a

The plaintiffs’ claim was to recover money paid in respect of this general lien in order to release the goods. They made no claim in respect of money paid under the