Bayer Polymers Co. Ltd. v. The Industrial and Commercial Bank of China, Hong Kong Branch
Read the full judgment text of HCCL 307/1998 on BabelCite. This HCCL judgment was delivered on 30 November 2000.
1. This is the trial of an action brought by the plaintiff ("Bayer") relating to a claim on an unpaid letter of credit opened by the defendant bank ("ICBC") under which Bayer was a beneficiary. This letter of credit remains unpaid, and by this action Bayer seeks to obtain payment under the credit, together with interest on such sum.
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HCCL000307B/1998 HCCL307/1998 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE COMMERCIAL ACTION NO.307 OF 1998 ---------------
---------------- Coram: Hon Stone J in Court Dates of Hearing: 10 and 11 October 2000 Date of Judgment: 30 November 2000 --------------------- J U D G M E N T --------------------- INTRODUCTION 1. This is the trial of an action brought by the plaintiff ("Bayer") relating to a claim on an unpaid letter of credit opened by the defendant bank ("ICBC") under which Bayer was a beneficiary. This letter of credit remains unpaid, and by this action Bayer seeks to obtain payment under the credit, together with interest on such sum. 2. This is a case in which there has been substantial interlocutory activity. By summons dated 25 January 1999, the defendant took out an application for a stay of these proceedings on the basis of forum non conveniens in favour of the court at Wuxi, PRC. That application failed, this court by its judgment dated 22 November 1999 dismissing this summons with costs. 3. Thereafter, the court heard an application by the plaintiff for summary judgment for the amount claimed in the Points of Claim, together with interest and costs. For the reasons given in its judgment dated 29 March 2000, this application also did not succeed, albeit the court granted unconditional leave to defend with little enthusiasm, and stated that it was concerned with "the absence of an immediate explanation as to precisely how Wuxi Joyray obtained the bill of lading, and thus ultimately possession of the goods absent payment". Unfortunately the trial of this action has failed to provide any direct explanation as to how this transpired, nor to render the precise factual situation a great deal clearer than had been the case at the interlocutory stage. I should, however, first set out the background to this somewhat unusual case. THE BACKGROUND FACTS 4. These can be shortly stated. There is no dispute as to the broad sequence of events. By a contract of sale dated 4 March 1997, Bayer agreed to sell to one Wuxi Joyray Import and Export (Group) Corporation ("Wuxi Joyray") 306 MTS of Lustran San 31-2060 at the unit price of US$900/MT. These, I understand, are plastics. It was a term of the contract that payment to Bayer was to be effected by drafts at 90 days sight drawn on the defendant bank under an irrevocable letter of credit opened with the defendant by Wuxi Joyray. 5. By a telex dated 18 April 1997, the defendant informed the Thai Farmers Bank, as agents of the plaintiff, that an irrevocable letter of credit, No.LC3210297089, had been opened with them in favour of the plaintiff for the amount of US$275,400 available by drafts drawn on the defendant, accompanied by a specified set of shipping documents. 6. It was an express term of the credit that the plaintiff would courier 1/3 of the set of bills of lading to the defendant within four days of the departure of the vessel carrying the goods the subject of the underlying sale contract. 7. Bayer duly shipped the relevant goods on board the vessel 'N Asia V.6157', and a bill of lading was issued (in a set of three) on 25 April 1997. On 29 April 1997, one original bill of lading is said to have been couriered to the defendant ("ICBC") by Bayer through a courier company named Airborne Express. 8. The remaining documents necessary for the negotiation of the letter of credit (including the draft and the two other originals of the bill of lading) were subsequently sent, via Bangkok Bank, to ICBC. There is no dispute that these latter documents in fact arrived at ICBC, albeit it is said that they were presented late. 9. The crux of this case, however, is what happened to the initial bill of lading, which was 1/3 of the set. In this regard, Bayer alleges that at 9 am on 7 May 1997 the bill of lading was delivered to ICBC, its basis for so asserting being documentation received from its freight forwarder, Airborne Express. 10. It also appears that later that day, that is 7 May 1997, Wuxi Joyray took delivery of the cargo from the carrier, P & O Nedlloyd's local agent, upon presentation of this bill of lading. 11. On or around 15 May 1997, ICBC advised Bangkok Bank of its refusal of documents actually presented under the credit, and on 23 March 1998 all the documents which had been sent to ICBC, less the original bill of lading, were returned by ICBC to Bangkok Bank. 12. The situation, therefore, from Bayer's standpoint was most unhappy : it had neither received payment for the goods from its buyer, Wuxi Joyray, nor had it received payment from ICBC under the letter of credit. As a result, Bayer commenced this action against ICBC by writ issued on 29 December 1998, asserting that ICBC had acted contrary to the provisions of the UCP 500 in declining to honour its obligations under the credit, notwithstanding due presentation of the requisite documentation thereunder. THE EVIDENCE 13. The plaintiff called three witnesses to give viva voce evidence, and adduced a further witness statement under the relevant hearsay provisions. 14. The evidence of Miss Chutima Sangkiew, who was the Sales Service Manager for Bayer in its Thailand Office, concerned Bayer's business and general sales activities, and described the sequence of events concerning the purchase order in question from Wuxi Joyray. In her statement, which was adopted as her evidence-in-chief, and which was not the subject of any dispute, she said that she had received three original bills of lading from P & O Nedlloyd by hand, and in compliance with the letter of credit requirements, immediately arranged to courier one bill directly to ICBC. The courier company that she used to perform this task was Airborne Express Company Limited, whose airway bill number for the courier package was No.7098488482. She further described her request, at the end of August 1997, to 'chase' for payment for the goods and to make inquiries with ICBC as to the status of these matters, asserting that she had never received information that ICBC in fact had not received the 1/3 bill of lading. 15. Miss Wanisa Chaichana, a colleague of Miss Sangkiew and the General Accounting Manager of Bayer, Thailand, was the plaintiff's second witness. Her evidence, which again was largely undisputed, was that her department was responsible for gathering and checking the "L/C presentation documents" and delivering these documents to Bangkok Bank on 2 May 1997 for onward delivery to ICBC. On or around 15 May 1997 she was informed by Bangkok Bank that it had received a telex from ICBC dated 14 May 1997 as to ICBC's rejection of the L/C presentation documents (which did not include the 1/3 bill of lading earlier couriered) on the ground of late presentation, albeit there was no mention by ICBC that it had not received the couriered bill of lading. Her evidence described her mounting concern as the 90 day period for payment under the draft (which expired on 11 August 1997) came due, being concerned that she "still had not received any response from ICBC". She also contacted P & O Nedlloyd to check on the status of the shipment of the goods, and was informed by P & O that the goods had been discharged from the vessel on 7 May 1997, and that the customer had taken delivery of them. In this regard, a subsequent fax of 18 September 1997 from P & O Nedlloyd stated that "according to records from our ship's agent" the cargo had been released to the consignee against the original bill of lading duly endorsed on the back thereof by both Wuxi Joyray and Bayer. 16. Her evidence continued that ICBC had not responded to any of Bayer's inquiries made through Bangkok Bank, and noted that it was not until Bangkok Bank's written request for the return of the documents that on 23 March 1998 ICBC had returned the "L/C presentation documents" to Bangkok Bank. 17. Miss Chaichana further described her inquiries with Airborne Express regarding the delivery status of the 1/3 bill of lading so couriered to ICBC, and produced a copy of the Airborne Express Customer Report Card from its computer system which purported to confirm that the original bill of lading under AWB No.709848842 was indicated as having been delivered to ICBC at 9.00 am on 7 May 1997. 18. The final witness to give evidence for the plaintiff was Mr Tom Yu Kai, who was in the Plastics Department of Bayer's Shanghai Representative Office. His evidence described the background to the negotiations for the sale contract, wherein he himself had acted as 'go between' for the sale between Bayer and the ultimate customer, one Wang Guoxing of Yi Xing Xin Cai Company, albeit the goods had first to be purchased by Wuxi Joyray (a subsidiary of the Wuxi Foreign Economic and Trade Commission) which possessed the requisite China import rights. 19. Mr Yu was asked to follow up by the Bangkok office upon Bayer's non-payment of the price of the goods. Inquiries of Wuxi Joyray led to the information that a gentleman known as "Manager Tie" of Wuxi Joyray was missing, and that Wang Guoxing of the designated end buyer Yi Xing "would not be able to pay the purchase price as his business had failed". 20. Mr Yu also said that he telephoned Mr Qian Ming of ICBC's Wuxi branch on two occasions at the end of August and early September 1997 "to inquire as to the circumstances surrounding ICBC's refusal to make payment". He said that he was told that payment had been refused because of late presentation of documents, and in response to specific queries relating to the receipt of the couriered bill of lading, he was told that ICBC "could not find" this bill of lading. In this connection, however, Mr Yu firmly denied that Mr Qian Ming had ever informed him that ICBC had never received the couriered bill of lading. 21. Mr Yu's evidence was further to the effect that later he had learned that the goods the subject of this unpaid shipment were "circulating in the market", and that one of the sellers, a Lu Jianmin, had told him that "the goods had been entrusted to him by Wang Guoxing for sale on the latter's behalf". 22. As to evidence from Airborne Express itself, a statement of Ms Simmi Bhatia, Quality Assurance Manager for Airborne Co. Ltd, was put in under the hearsay provisions. In the statement, the delivery and control mechanisms used by Airborne Express and its agents are described, the general procedure being thus : upon collection of a package from a customer requiring international delivery, an international express airbill is completed. Each airbill has four copies, one top copy and three carbons. The top copy is the "tracking copy" and is the only copy of the airbill with an identification bar code printed upon it. This copy accompanies the shipment to its final destination, and is the copy that, in most cases, the recipient of the shipment will sign. Of the other copies, one is kept by Airborne Express for accounting purposes, one is for customs and the other, the "sender's copy", is the copy given to the customer. 23. Prior to any package making the outbound journey from Bangkok, the shipment is "alerted" on the online system using the airbill numbers. So that, for a package intended for China, it would first be sent to the Hong Kong hub. The monitoring system is that Airborne Express in Bangkok monitors the status of each shipment on the system awaiting details of proof of delivery from the final delivery agent. If such proof of delivery is not received within a week, staff begin to track the status of the shipment and to make inquiries with the relevant agent. Once proof of delivery is entered into the online computer by the final delivery agent, the information is displayed for one month or so and is subsequently downloaded into the local Bangkok system for longer retention. This secondary record can be downloaded to produce a "Customer Card Delivery Report". 24. In her statement Ms Bhatia emphasized that such a record could not be produced unless the final delivery agent had entered the proof of delivery information into the system. In other words, that such information could not be generated in Bangkok, and in this particular case could only have been generated and entered by the agent in Wuxi. Ms Bhatia further dealt with the steps taken by her once inquiries had been made by Bayer. Those steps included the production of a Customer Card Delivery Report, evidencing proof of delivery at the time and date specified upon it. She also stated that she was unable to understand the documents produced by the then local agent (that agency having since been terminated), so that she was unable to comment, save to say that the codes and references therein used were internal, and did not correspond with the references and codes of Airborne Express Bangkok. 25. Two witnesses gave evidence on behalf of the defendant. 26. The first was a bank officer, Mr Qian Ming, who holds the post of Person in Charge of the International Clearing Department of the Wuxi branch of ICBC, a state-owned bank carrying on business in various parts of the PRC, including Hong Kong. The thrust of Mr Qian's evidence was that he had not received one of the three bills of lading which the plaintiff asserted had been couriered to his branch on 7 May 1997 at 9 am. Had it been so received, he said, the 1/3 bill of lading would have been passed to, and received by him, for further handling. This had not occurred. Moreover, he asserted, the sole agent of Airborne Express in Wuxi, the state-owned Wuxi Post Office Express Mail Services ("EMS") had confirmed that they had not delivered the bill of lading in question. 27. With regard to the remaining two in the set of three bills of lading, these documents had not been presented until 5 May 1997, he said, which was in breach of the terms of the credit, with the result that on 14 May 1997 the Wuxi branch of ICBC had informed the plaintiff's bank, Bangkok Bank, by SWIFT message that payment had been rejected by reason of late presentation, and all the commercial documents which had been received pursuant to the credit "including the 2/3 bills of lading" had been returned to Bangkok Bank on 23 March 1998. 28. Mr Qian agreed that in August 1997 indeed he had had two telephone calls from Mr Yu Kai of the plaintiff's Shanghai office, wherein Mr Yu had inquired why the Wuxi branch of the bank had refused payment. In this connection Mr Yu had asked whether the Wuxi branch had received the 1/3 bill of lading, and in response Mr Qian said that he had informed Mr Yu Kai "in no uncertain terms" on both occasions that his branch had not received this bill. Mr Qian further disputed ever having told Mr Yu that he "could not find the bill of lading". Accordingly, it was for these reasons, asserted Mr Qian, that the plaintiff was not entitled to claim against the defendant under the credit. 29. The second witness called by the defendant was a Madam Chan Xiao Hui, currently the Manager of the Business Department of EMS. Madam Chan stated that in 1997 EMS was the sole business agent in Wuxi of Airborne Express, such that all deliveries to the Wuxi area by Airborne Express would have been received and delivered through EMS. The system was that when EMS effected deliveries, the recipient would be requested to affix its company chop upon an acknowledgement of receipt, which in turn would be kept in a delivery file. 30. Madam Chan said that she recalled this particular case because she had been contacted by Mr Qian on 7 January 1999 to inquire whether "on 7 May 1997 at 9 am EMS had delivered an express delivery No.7098488482" which had been sent from Thailand. She had checked her records and had informed Mr Qian that no such express delivery had taken place, and further had so informed Mr Qian on the following day when he and a colleague had visited her office in person. She said that on 25 November 1999 the Wuxi branch of the bank had written to her company requesting assistance in the matter of this purported delivery, and that pursuant to this request her company had issued two certificates on 25 November 1999 confirming that EMS was the sole agent of Airborne Express in that period, in addition to making photocopies of a delivery list for 7 May 1997 which, in her words, "proves that on 7 May 1997, EMS received a total of 1,106 express deliveries and that none of these was an Airborne Express Delivery No.70988488482". THE CORE ISSUE 31. Rarely does a commercial case arise, as both counsel here accept, wherein resolution of the single issue is dispositive of the entire proceedings : Was the first of the three original bills of lading delivered to ICBC's Wuxi branch, and, by extension, was that bill released to the buyer, Wuxi Joyray, to enable delivery to the latter of the goods so shipped by the plaintiff? 32. For his part, Mr Yuen for the defendant asserted that his client had never received that bill of lading, and thus could not have released it. He submitted that the burden of proof in this regard lay firmly on the plaintiff, and that the plaintiff had failed to discharge this burden. At the forefront of this submission was the absence of an independent document indicating receipt by ICBC, there being, at best, but secondary (and, said Mr Yuen, unsatisfactory) evidence from the carrier, Airborne Express. Taken together, the evidence of EMS, and that of the bank itself, said Mr Yuen, resulted in the failure of the plaintiff's case. 33. On behalf of the plaintiff, the vendor of these goods, Mr Coleman took an equally robust, and diametrically opposed position. He accepted that the burden in this case fell upon him, but submitted that the facts, as they were known, compelled an answer which fell squarely upon his client's side of the line. On the facts as established, the conclusion, he submitted, was inescapable. ICBC had indeed received the disputed bill of lading, and in breach of its obligations it had wrongly failed to pay under the letter of credit. 34. In terms of the evidence led, and save for one relatively minor issue, I accept the plaintiff's evidence. That which was forthcoming from Miss Sangkiew and Miss Chaichana was unexceptional, and accorded with the surrounding documentary evidence. I am further inclined to believe Mr Tom Yu's version of events in substantial part, although in one instance I believe that his memory failed him, and I do not accept that in the second of the two telephone calls he had had with Mr Qian that he had confronted Mr Qian and actually suggested that ICBC had released the 1/3 bill of lading to Wuxi Joyray. This particular assertion, which arose in cross-examination, found no place in Mr Yu's witness statement, and in so asserting I believe he allowed himself to overstate the case in the heat of the moment. I did, however, believe Mr Yu's evidence that in both of these telephone conversations Mr Qian indeed had told him that the bank could not find the 1/3 bill of lading, that Mr Yu had pressed for payment on behalf of his company, the plaintiff herein, and also that Mr Qian had suggested that Mr Yu should approach Wuxi Joyray and make inquiries. 35. Miss Bhatia's evidence was, unsurprisingly, subjected to the criticism from Mr Yuen that it was untested by cross-examination. However, the methodology described in her statement is unremarkable, and I accept it as far as it goes, including the fact that there was downloaded from the Airborne Express computer system the hard-copy document described as the "Customer Card Delivery Report", and that this electronic record could not have been produced unless such delivery information had been entered into the Airborne Express computer system at the "delivery end". 36. I did not regard the evidence on behalf of the defendant in the same light. To the contrary. I had considerable difficulty in believing a good deal of it. 37. Mr Qian, who gave evidence for ICBC, was not an impressive witness, although it may be that his obvious irritation at particular questions and uncomfortable and at times abrupt demeanour may have been the result of finding himself under some pressure, given that the bill of lading allegedly couriered to his department at his bank appears immediately to have found its way to the purchaser of the goods, which then had used it to obtain a delivery order and to obtain release of those same goods absent payment. Subject to the qualification earlier adverted to, I prefer Mr Yu's account of their two telephone conversations, whilst certain aspects of Mr Qian's evidence were difficult to accept at face value; in particular I have in mind Mr Qian's insistence that all items of post would without exception be delivered to him personally at all times, so that, on his evidence, he functioned equally as Head of Department and, in effect, as office postboy. Moreover, his answers to questions about the revolving credit line allegedly enjoyed by Wuxi Joyray struck me as less than frank, if not positively evasive, albeit he did accept Mr Coleman's suggestion that the 90-day credit structure built into the credit prior to the draft maturity date would have sufficed to enable Joyray to have sold the goods, and thereafter to have placed the bank in funds prior to payment of the draft drawn under that credit. In reviewing his evidence as a whole, I gained the firm impression that the court was not being told the whole story, and I have no doubt that with regard to this particular incident Mr Qian was being less than frank about that which had occurred. I would add further that, in terms of the present issue, I attached little probative value to the extract from the defendant's ledger produced during Mr Qian's evidence, given that there is no dispute that the other documents under the credit were indeed received by the bank. 38. Nor did Miss Chan Xiao Hui from EMS make a favourable impression. Given her place within the general scheme of things it may have been thought that she would not have had any axe to grind. Nevertheless, I formed the view that this was not so, and that she was particularly defensive under cross-examination. I regarded as straining credibility her bland assertion that the fact of delivery of such a couriered item would not have been reported to the entity on behalf of whom EMS was so acting : this was "not necessary, what we would do is just deliver". Nor, in the circumstances, did I find convincing her apparent ignorance, as Manager of the Business Department of Wuxi EMS, of any computer link or other method of contact with Airborne Express, particularly in light of the fact that EMS acted as exclusive agent in Wuxi for this courier company. I further was far from satisfied with her explanations regarding the computer generated list of mail allegedly delivered, in particular with what seemed to be her inconsistent evidence as to the manner in which the delivery of non-EMS packages would be recorded, Miss Chan first suggesting (on two occasions) that the airbill number would not appear upon the EMS printout, and thereafter appearing to recant and to say that it would. Perhaps the only true and reliable record lay in the "delivery file", to which reference is later made in this judgment. 39. In the particular circumstances this is not a straightforward matter to resolve, not least because of the absence from the evidence of two documents, namely the actual delivery receipt ostensibly bearing the ICBC "stamp", the existence of which is recorded on the Customer Card Report, and second, the copy of the 1/3 bill of lading itself, so that there has been no opportunity to inspect the endorsements thereon. Both original documents have apparently been destroyed, by Airborne Express and P & O Nedlloyd respectively. 40. This case has occasioned considerable reflection. At the end of the day, however, and with some reluctance, I have been driven to the conclusion, unpalatable though it may be, that on the balance of probabilities this 1/3 bill of lading was indeed delivered to ICBC on 7 May 1997, as alleged, and that on the same day it found its way from ICBC into the possession of Wuxi Joyray. This conclusion seems to me necessarily to follow when the entirety of the available evidence is considered. 41. Two of the three original bills of lading were always in the hands of Bayer, or within the banking system. The only other original is that which left Bayer in the package taken by Airborne Express for courier service to ICBC in Wuxi. No suggestion has been made that this package was not in fact sent by Airborne Express, nor that it was returned undelivered. To the contrary. The evidence, albeit secondary, from Airborne Express is that it was so delivered. I further accept, and so find, that on the same day as the alleged delivery, 7 May 1997, that Wuxi Joyray took delivery of the cargo using an original bill of lading. This can only have been, in the circumstances prevailing, this 1/3 bill of lading which had been so couriered. I am much influenced by this. Delivery of these goods via a delivery order obtained against production of an original bill of lading is the natural and correct sequence of events, and in this context I do not accept Mr Yuen's submission that it could have been the shipping agent of P & O Nedlloyd that was at fault in making delivery other than against an original bill, and then asserting to the contrary in order to protect its own position. Absent anything to indicate that this may have occurred, this is simply speculation, and is rejected. 42. As Mr Coleman pointed out, this bill of lading can only have come into the hands of Wuxi Joyray from three other possible sources; ICBC aside, these are Airborne Express Bangkok, or its Hong Kong hub, and EMS itself. There has been no suggestion that Airborne Express was responsible, nor that it came to Wuxi Joyray directly from EMS. ICBC, therefore, remains the overwhelmingly probable source. In so concluding, there is no need to go so far as to identify Mr Qian as the person who was personally responsible for that which occurred, and I do not do so; whether the bill was handed over by a member of the bank's staff, and whether in accordance with the bank's wishes or consequent upon some other arrangement, does not seem to me greatly to matter. Receipt of the bill, as per the terms of the credit, would render ICBC liable to the plaintiff, absent other discrepancies in the documents submitted; indeed, Mr Yuen for the defendant did not dispute this proposition. 43. Nor does it strike me as inherently improbable, in the circumstances prevailing, that someone in ICBC would have permitted the bill of lading as so delivered to go to Wuxi Joyray, given Mr Qian's acceptance in cross-examination that the 90-day sight period was such as to permit the customer to onsell the goods, and thus place the bank in funds prior to the maturity of the draft and the crystallisation of the obligation to pay. On this hypothesis it may perhaps have been that "Manager Tie's" disappearance upset the apple cart, in that funds from the onsale of this cargo of plastics were not forthcoming from Wuxi Joyray as anticipated, and that accordingly the bank was left exposed to its obligations enuring under the credit. Whilst for present purposes I do not need to go this far, it was in this context that I found Mr Qian's responses to questions about Wuxi Joyray's credit facilities unsatisfactory and unhelpful, and the possibility to which I have alluded is one which, at the least, is consistent with the conclusion that the 1/3 bill of lading in fact was released to the customer prior to the bank being placed in funds. 44. In coming to the view, as I reluctantly have, that ICBC indeed took delivery of this bill of lading, I have also borne in mind three additional factors. 45. First, in terms of the evidence from EMS, in my view it is fair comment on Mr Coleman's part that the assertion, via Miss Chan Xiao Hui, that EMS had never received the bill of lading, and thus could not have delivered it, is not fully underpinned by the documentary material produced, which patently is incomplete. In this regard Mr Coleman asserted that EMS had produced "only what they wanted to produce", namely a print-out relevant to EMS deliveries, and not to Airborne Express deliveries by EMS as agent. In particular the "delivery file", to which Miss Chan had made reference in evidence, and which apparently contained the relevant documentation showing delivery and receipts, pointedly had not been forthcoming, nor had Miss Chan's evidence that she had checked that file been persuasive. I agree. 46. Second, I have borne in mind that the defence that ICBC had not received the first original bill of lading in May 1997 came but late in the day, a circumstance which caused Mr Coleman to castigate such defence as a "very late invention". This was clearly not a matter known to ICBC's counsel, Mr Yuen, at the time of the defendant's application for a stay of these proceedings on the basis of forum non conveniens at the hearing which took place on 22 November 1999, and this in the context of an application in which this court considered the observations of Clarke J (as he then was) in Standard Chartered Bank v. Pakistan National Shipping Corp. & Others, [1995] 2 Ll LR 365 at 378 (no arguable defence on liability and quantum providing strong reason to refuse a stay) and specifically noted, at page 4, lines K-P :
47. In this context Mr Yuen stoutly defended his client's position, submitting that in light of the "independent evidence from EMS" no adverse inference now could be drawn as to the delay in raising this defence, the only reasonable inference being "that the defendant somehow failed to realize the need to raise its defence at the earliest moment", and that the earlier failure to mention this point was essentially non-sinister. In the circumstances, however, I do not consider that this issue can thus so easily be dismissed. The non-receipt of the 1/3 bill of lading is at the very heart of this case, and I find it difficult to believe that its significance was not earlier appreciated. Mr Coleman's submission that the letter of inquiry from the bank to EMS, and the Certificate produced in response, are dated from late November 1999, that is, after the hearing of the stay application, and that it was only then that there was any attempt to obtain evidence to put up the defence as is now run, in my view possesses considerable force. I further accept his submission that Mr Qian could not be correct in his assertion that he first made inquiries of EMS in January 1999, apparently being prompted so to do by the information contained in the writ, in light of the fact that this document, which was the only court document then in existence, makes mention neither of Airborne Express nor of the relevant airbill number. 48. This latter aspect leads me to the third factor to which I have attached weight. In a case of this type attention naturally is paid to contemporaneous documentation which came into existence before issue was joined between the parties. And in terms of the non-payment under the credit, and the reasons therefor, little appears to have emanated from the defendant bank. Detailed perusal of the available documentation reveals a telexed Advice of Refusal dated 14 May 1997, which is said by the defendant to constitute "our refusal of the documents and is sent in accordance with Article 14 of UCB 500". This merely refers to "discrepancies and late presentation", and concludes that the documents are being held at the disposal of the Bangkok Bank, and that the discrepancies have been "referred to the applicant for their consideration and shall revert". There is pointedly no mention anywhere, at least so far as I have been able to identify, of the non-receipt of the first bill of lading, nor is the issue of the alleged 'discrepancies' further canvassed; indeed, unless lateness in itself constitutes the 'discrepancy' purportedly relied upon, such 'discrepancies' are nowhere identified, and there has been no discovery of any correspondence which reasonably may be thought to have come into existence between the bank and its customer, Wuxi Joyray. So that, when viewed in the round, the prime defence point as to non-receipt of the original bill does not seem to have found a place in the contemporary correspondence. 49. The result of the foregoing, therefore, is that on the core issue in this case I find in favour of the plaintiff on the basis that ICBC indeed received the original bill of lading, and that it caused or permitted this bill to find its way to its customer. As counsel agree, this is sufficient in itself to decide this action. It follows therefore, as Mr Coleman submitted, that there can be no middle ground, and that the 'second issue' purportedly raised by the defendant, namely as to late presentation of the 2/3 bills of lading, necessarily falls away on the basis both of this primary fact as found, and upon the application of the principles of the UCP 500. ORDER 50. There is to be judgment in favour of the plaintiff against the defendant in the sum of US$275,400.00. 51. I make an order nisi that interest on the said sum is to run at the rate of 8% per annum from the date of the writ until the date of judgment herein, and thereafter at the judgment rate from time to time prevailing until payment. 52. As to costs, I make an order nisi that the costs of this action be to the plaintiff, to be taxed if not agreed.
Representation: Mr Russell Coleman, instructed by Messrs Clifford Chance, for the Plaintiff Mr Rimsky Yuen, instructed by Messrs Livasiri & Co., for the Defendant |
Further hearings and rulings under HCCL 307/1998