[1916] 1 KB 495.
Court of Appeal.
These notes were last updated 16 Apr 96.
Back to list of cases , Back to home page, International trade page
A bill of lading is good tender c.i.f. only if it evidences a 'subsisting' contract of carriage. There the further performance of the contract had become illegal as a result of the war, and the bill of lading was held not to be good tender.
At first instance Scrutton J. observed that:
"I am strongly of opinion that the key to many of the difficulties arising in c.i.f. contracts is to keep firmly in mind the cardinal distinction that a c.i.f. sale is not a sale of goods, but a sale of documents relating to goods." (Scrutton J. in Arnhold Karberg & Co. v. Blythe, Green, Jourdain & Co. [1915] 2 K.B. 379).
However, although his decision was affirmed in the C.A., doubt was cast upon this observation, Bankes L.J. and Warrington L.J. indicating their view that a c.i.f. contract is a contract for the sale of goods to be performed by the delivery of documents. In Manbre Saccharine, however, McCardie J. thought that "the difference is one of phrase only."
Note
In Cubazukar v. Iansa, Queen's Bench Division (Commercial Court), SJ/160/78, 29 February 1980, upheld C.A. in The Playa Larga (in respect of a c. & f. contract), Mustill J. concluded on The Marble Island cargo (in the light of cases such as Arnhold Karberg & Co. v. Blythe, Green, Jourdain & Co. [1915] 2 K.B. 379, [1916] 1 K.B. 495 and Manbre Saccharine Company Limited v. Corn Products Company Limited [1919] 1 K.B. 198):
(1) The seller is obliged to tender documents representing contracts which are valid and effective at the time of tender.
(2) This requirement does not however entail that the contracts must necessarily give the buyer enforceable rights against the carrier in relation to the future performance of the contract. Thus, the tender of a bill of lading representing a contract which has already been frustrated can, in appropriate circumstances, be a proper compliance with the contract of sale.
(3) Where the bill of lading contract has already ceased to confer enforceable rights as to future performance at the moment of tender, it is not clear on the cases how the line is to be drawn between those documents which are and those which are not a valid tender. There are three possible views as to the type of document which can properly be rejected: (a) Those relating to contracts of carriage which have become illegal under English law (as the lex fori); (b) Those relating to contracts whose performance has become illegal either by the lex fori or by the proper law of the contract; (c) Those relating to contracts which have been discharged by frustration on any ground, except the destruction of the goods themselves.
In my opinion, the authorities are best reconciled by holding that documents in category (b) are open to rejection.
In that case the contract of carriage had been frustrated by Cuban but not U.K. law. In the C.A. there was no discussion of this precise issue, but Ackner L.J. said:
We also agree with the learned Judge that the circumstances in which the change of destination was made resulted in the documents being defective at the moment of tender. They related to a contract of carriage to a destination which was not the one named in the contract of sale, and they were false in that they purported to represent a contract which had in fact been privately varied.
The actual decision in each case, however, was that the documents were otherwise discrepant and had been validly rejected on those grounds. See further The Playa Larga.
Back to start of case , Back to list of cases , Back to home page, International trade page
These notes were last updated on 15 Feb 98.
SLAPNT@cf.ac.uk