MSC MEDITERRANEAN SHIPPING CO SA V GLENCORE INTERNATIONAL AG

[2017] EWCA Civ 365, Court Of Appeal (Civil Division), Lord Justice Lewison, Lord Justice Henderson and Sir Christopher Clarke, 24 May 2017

Bills of lading - Meaning of delivery - Delivery under electronic release system - Containers going missing at port of discharge - Whether carrier's obligations discharged by supplying an import PIN code permitting the recipient to take delivery - Whether delivery of the PIN code amounted to delivery of the goods - Obligations of carrier in delivering containers - Constructive delivery - Delivery order - Release note - Estoppel

Two out of three containers containing cobalt briquettes shipped under a bill of lading dated 21 May 2012 had gone missing. It was the 70th similar shipment, but the first to go missing. This was the claim of Glencore, the shipper, against MSC, the carrier, for damages for breach of contract, bailment and conversion. The cargo had been shipped from Fremantle to Antwerp on MSC Eugenia and transhipped to MSC Katrina. The bill of lading named Glencore as the shipper, and their agents, Steinweg, at Antwerp as notify parties. It was a negotiable bill, the consignee box being completed "to order". The bill of lading contained the clause: "If this is a negotiable (To order/of) Bill of Lading, one original Bill of Lading, duly endorsed must be surrendered by the Merchant to the Carrier ... in exchange for the Goods or a Delivery Order". At Antwerp, an electronic release system was in place and used by MSC. Under the system, the carrier did not issue paper delivery orders or release notes against bills of lading, but "import pin codes". Steinweg was accustomed to operating this system and billed Glencore accordingly under the item "delivery notes". The judge gave judgment for Glencore ([2015] 2 Lloyd's Rep 508). MSC appealed, relying on five grounds: (1) the issuing of the PIN code amounted to constructive delivery; (2) the PIN code was a delivery order; (3) the release note was a delivery order; and (4) Glencore was estopped by the delivery of the previous 69 cargoes from denying that PIN code delivery constituted contractual delivery. MSC also sought to amend its appeal to show that cyber security issues had given rise to a break in the chain of causation.