KAMPALA INTERNATIONAL UNIVERSITY

SCHOOL OF LAW
COURSE UNIT: INTERNATIONAL TRADE AND BUSINESS LAW &
PRACTICE
LECTEURER: COUNSEL KUSHABA KENEDY
GROUP: FOUR

NO. NAME REG NO. SIGNATURE

1 NAMAGANDA LINDA 2020-08-02006

CHRISTO
2 SSENTAMU JULIUS 2021-01-02814

3 ATUGONZA PROSSY 2021-01-02897

4 LUWALO JEREMIAH 2021-01-02636

QUESTION; Under International Trade, Supposing the Seller
Tenders an Insurance Certificate. Is The Buyer Under Any
Obligation To Receive That As Valid Tender? Your Submission
Should Focus On the Decision in Diamond Alkali Export
Corporation versus Bourgeois [1921] 3 Kbd 443

Brief facts

Diamond Alkali Export Corporation of New York agreed to sell to

Bourgeois of great St Helens in the city of London 50 tons of soda ash,
at $4.70 per hundred pounds, terms of payment were cash. The contract
contained conditions (clauses exclusive). The seller not to be liable for
failure or delay in delivery which was beyond the seller’s control.

Note; the seller arranged for the goods to be carried in the Swedish
steamship.

The ship was originally scheduled to leave Philadelphia to Gothenburg

on October 13th [1920] but it delayed because it had to obtain necessary
permit for shipment from the Traffic control manager in New York.

Note; one of the excluded liability was, delays in delivery, stoppage in

navigation.

Under the contract the date of the Bill of Lading was to be considered
and date of shipment (agreed terms) which was 8th /November/ 1920.
However delay arose from causes which were, as the arbitrator found
beyond the seller’s control.

The original documents were tendered in London with an invoice for the
goods to the buyer on [24th/Nov.1920] the buyer rejected the documents
and payments was refused on grounds

1 that the seller did not ship the goods until 8th and 9th Nov.

2. That the proper bill of lading was not presented

3. Proper policy of insurance was not presented to them but a document

described as a certificate of insurance.

Issues which were raised by court

1. Whether the strike clause apply

2. Whether under contract and according to the law of England the
documents presented by seller; namely
(a) The Bill of Lading
(b) Certificate of insurance together with the invoice for goods
valid and sufficient to entitle sellers to payment of the price.

Issue one;

Court stated the effect of strike clause,

(a) It enable the seller to ship at a later date, saves the vendor from
liability for delay cause by circumstances with the clause.
(b) It enables the seller, as a matter of right, to ship as soon as possible
after the cause of delay has been ceased to operate.

C) It gives power to the seller to cancel.

(d) It gives no likely power to the buyer

In conclusion, court stated that an express clause of the bargain enables

the sellers as a matter of right to ship at a later date than that expressed
in the earlier part to ship at a later date than that expressed in the earlier
part of the contract of sale.

Issue two

The bill of lading contained

1. Received in apparent good order and condition from DA

2. Haron to be transported by the S.S Anglia
3. 280 bags of Dense soda

Court stated that the bill of lading was mutually agreed that shipment
was subjected to all the terms and provisions of all the exemptions from
liability contained in the Act of congress of the United States1

Section 4 of congress of United States provided that it shall be the duty

of the owner or owners, master or masters or agent of any vessel
transporting merchandise or property from or between ports of the
united states and foreign ports to issue to shippers of any lawful

1
[1893]
merchandise a bill of lading or shipping document stating… marks
necessary for identification.

(a) Number of packages or quantity

(b) Stating whether it be the carrier or shippers’ weight
(c) Apparent order or condition of such merchandise or property
delivered to and received by the owner master or agent of the
vessel for transportation,

Such document shall be prima facie evidence of the receipt of the

merchandise.

Bid-dell Brothers vs. E cement Horst co.2 Hamilton J stated that

against tender of these documents, the bill of lading, invoice and
policy of insurance, which completes delivery in accordance with that
agreement, the buyer must be ready and willing to pay the price.

Kennedy L.J stated (in the same case)

Bill of lading accompanied, in case the goods have been lost in

transits by the policy of insurance, the Bill of lading in law and fact
represents the goods.

Article 3 of Scrutton on charter parties 3 defines bill of lading as a

receipt for goods shipped on board of a ship signed by the person who

2
[1911] 1 K.B214
3
10th edition
 contracts to carry them or his agent and stating the terms on which the
goods were delivered to and received by the ship.

The custom in the cause lick barrow vs. mason4 ;stated that the
goods in respect of which bills of lading purport to be signed have not
been laden on board’’

Court cited section 35 , which states that every bill of lading in the
hands of a consignee or endorse for valuable consideration
representing goods to have been shipped on board a vessel shall be
conclusive evidence of such shipment as against the master or other
persons signing the same.

In Benjamin on sale 6 provides that ‘when delivery is to be made by

a bill of lading the rule is that the seller makes a good delivery if he
forward to the buyer, as soon as he reasonably can after the shipment,
a bill of lading where under the buyer can obtain delivery, duly
indorsed and effectual to pass the property in the goods, made out in
terms consistent with the contract of sale and purporting to represent
goods in accordance there with.

Therefore court stated that the document was not bill of lading within
CIF Contract;

4
[1794] T.R 683-685
5
Bill of Lading Act 1855
6 th
6 Edition page 846
 It does not acknowledge the goods to be on board a specific ship.

It does not acknowledge a shipment on board at all, because it left it

uncertain as to whether the goods will come by the Anglia or some
following ship

MC Cardie J. stated that the document seemed to be (in substance)

or a mere receipt for goods which at some future time and by some
uncertain vessel are to be shipped

Certificate of insurance

The bags (280 bags) or dense soda ash were insured and it was
understood and agreed that in case of loss, such loss is payable to the
order of the assured on surrender of this certificate. (Certificate
represented and takes the place of the policy and conveys all the
rights of the original policy holder)

Purpose was to collect any loss or claims

To conform with revenue laws of Great Britain in order to collect a

claim under this certificate it must be stamped within 10 days after its
receipt in the United Kingdom.

Judge Mccardie cited Burstall Vs Grimsdale 7It was expressly

provided by the contract that certificate of insurance might be an
alternative for an actual policy.

7
[1906] com.case.280
 Court stated a mere written statement by the seller that they hold the
buyers covered by insurance in respect of a specified policy of
insurance is not itself a policy of insurance within a CIF Contract.

Manbre Saccharine8 it was stated that it seemed plain that a

broker’s cover note or an ordinary certificate of insurance are not
adequate agreements with a contract.

Note; American Certificate of insurance are equivalent to policies and

Sweden it was accepted as policy.

The document (which was not stamped) was given under a floating
policy issued by the insurance company. That certificate is not a
policy. It had incorporated terms of the policy which the buyer did
not know.

The certificate does not show whether that policy was in a recognized
or usual form or not.

It did not contain all the terms of their insurance.

The terms have to be sought for in two document the original policy
and the certificate.

Wilson, Holgate & Co.’s case 9it was stated that ‘buyer cannot be
compelled to take a document which is something like that which he
has agreed to take. He is entitled to have a document of the very kind

8
[1919]1KB 198
9
[1920] 2 K.B 19
 which he has agreed to take, or at least one which doesn’t differ from
it in any material respect.

Court stated that the buyer could know whether the document he got
was of a proper character unless he saw the original policy and
examined its conditions (then is bound to accept)

Certificate is an ambiguous thing, it is unclassified and undefined by

law not even marine insurance.

Note; would the buyer sue upon the certificate or upon original
policy? Before the buyer could sue at all he would have to that he was
the assignee of the certificate.

If the certificate does not fall with Marine insurance Act.

Section 22(1)10 . The general rule is subject to any written law, a

contact of marine insurance is inadmissible in evidence unless it is
embodied in a policy in accordance with this Act.

Section 23 11 provides that policy must specify

(a) The name of the assured, or of some person who effects the
insurance on his or her behalf,
(b) The subject-matter insured and the risk insured against,
(c) The voyage, or period of time, or both, as the case may be,
covered by the insurance

10
Marine Insurance Act 2017
11
Marine Insurance Act 2017
 (d) The sum or sums insured, and;
(e) The name or names of the insurers
Therefore the buyers were entitle to reject the documents upon
the ground that no proper bill of lading and no proper policy of
insurance were tendered by the sellers in conformity with CIF
Contract.

In Suffish International food processors Uganda limited &

another Vs Egypt Air corporation.12
The first appellant entered into a contract with the respondent to
air freight a consignment of chilled fish from Uganda to
Brussels. On arrival at the destination it was unfit for entry into
the European economic C. it was rejected and destroyed.
The 2nd appellant indemnified the first appellant as its insured
for the loss in the sum $48.100 on an alleged insurance cover.
The 1st appellant instituted a suit against the respondent for the
benefit of the second appellant under the doctrine subrogation to
recover the $48,100 which the latter had paid to the former.
Held at the Supreme Court, (justice Kanyeihamba)
No contract or its terms were shown or proved in the court. The
submissions before the court reveal that the alleged contract of
insurance was effected, if at all, after the cargo to be insured had
been damaged and the damage reported. In other word, the
12
[1999] civil App. No. 2
insurance policy, if any would have been entered into and
intended to cover a situation and events which had passed. Such
proposed insurance contract could not only be voidable but
should be void.
The mere testimony that parties had negotiated for a contract
does not magically concretize those negotiations into a contract
when the terms of the contract are not known and when events
which were contemplated to be covered by the anticipated
contract occur subsequently.
The fact that one is in possession of a marine certificate of
insurance and produces it in court is not proof that the certificate
covered the goods affected or any other goods for that matter.
The terms and conditions for marine insurance of carriage of
goods differ from one type of cargo to another. One party may
wish to transport corn, animals, ice cream, perishable or non-
perishable.
(a)Each of these species of goods will have its own terms and
(b) Conditions of insurance and delivery agreed upon between
the parties and;
(C) Written down
(d) Each of the parties may have and is entitled to have a marine
certificate of insurance couched in general terms.
Therefore the doctrine of subrogation didn’t succeed.