This is an appeal by Cosco Container Lines Co Ltd and Chung Chiao Shipping Sdn Bhd (the appellants) against the judgment of the Kuala Lumpur High Court dated 8 January 2009 in favour of Trengganu Forest Products Sdn Bhd (CMI1429). On 4 March 1994 Trengganu Forest Products Sdn Bhd (Trengganu) entered a contract with Hebei Metals & Minerals Import & Export Corporation (the buyer) to supply 56 containers of plywood. The contract terms included the requirements that:

• the shipment must be made before 30 April 1994;
• the cargo must be loaded at a Malaysian port;
• the cargo must be discharged at Xingang Port, China; and
• payment must be made by irrevocable letter of credit.

Trengganu entered a contract of carriage with Cosco Container Lines Co Ltd to deliver the cargo. The defendant issued a bill of lading on 30 April 1994 with the cargo shipped on board the Tuo He V.103 at Port Klang. Trengganu submitted the documents, including the bill of lading, to the negotiating bank for payment under the letter of credit. On 27 May 1994, the cargo arrived in Xingang and the cargo was discharged at the disposal of the buyer. Subsequently, the buyer rejected the cargo, rescinded the sale and obtained an injunction to stop the Bank of China from releasing funds pursuant to the letter of credit.

Trengganu claimed against the appellants in respect of loss and damage suffered as a result of the fraudulent misrepresentation in the bill of lading by the appellants, which Trengganu claimed had breached the implied terms of the contract of carriage. It was subsequently discovered that the cargo was not 'shipped on board' on 30 April 1994 as represented by the bill of lading and the cargo was in fact discharged at Hong Kong before being transhipped on another vessel to Xingang.

In the arbitration between the buyer and Trengganu before the China International Economic and Trade Arbitration Commission, Beijing (CIETAC) in relation to the dispute concerning the contract of sale, CIETAC granted an award in favour of the buyer. Pursuant to the award, Trengganu made payment to the buyer.

Trengganu then sought compensation from the appellants. The trial Judge held that Trengganu had established beyond reasonable doubt that the appellants were liable for the tort of deceit in making fraudulent misrepresentation in the bill of lading; that the appellants had failed to discharge the onus of proving fraud on the part of Trengganu in instructing the appellants to make the representation in the bill of lading and thus the appellants' defence of ex turpi causa non oritur actio must fail; and that Trengganu had proven beyond reasonable doubt that the appellants had caused loss and damage to Trengganu as a result of the fraudulent misrepresentation made by the appellants in the bill of lading.

Two issues were raised on appeal. First, does the limitation period of one year (under the Carriage of Goods By Sea Act 1950 (which incorporates the Hague Rules)) apply? Secondly, did the trial Judge carefully and judicially evaluate and appreciate the facts, the evidence and the documents?

Held: Appeal allowed.

As regards the first issue of art 3.6 of the Rules in the First Schedule of COGSA (the Hague Rules), this action apparently was filed in the High Court on 28 July 1997, more than one year after the goods were delivered to the consignee. Trengganu argued that the matter has been exhaustively canvassed and argued before the Senior Assistant Registrar, on appeal before the Judge in chambers and finally before the Court of Appeal. What transpired in the Court below was that the issue of limitation was ventilated before the Senior Assistant Registrar in the appellants' application to strike out Trengganu's claim. It was dismissed. The decision was taken on appeal before the Judge in chambers and was allowed and Trengganu's suit was struck out (see CMI464). Trengganu appealed to the Court of Appeal and it was ordered that the suit be reinstated and the matter be sent back for trial in the High Court. There was no appeal against this order at the Court of Appeal.

The issue of estoppel based on limitation has been raised and argued before three forums, ie the Senior Assistant Registrar, the Judge in chambers and finally the Court of Appeal. The finality is that, since there was no further appeal the issue of limitation had been determined in Trengganu's favour. On that basis, the appellants fail on the first ground.

As to the second issue, it is apparent that the trial Judge did not address his mind to the significance and prominence of the documentary evidence which provided cogent evidence that it was Trengganu who had masterminded the manipulation of the all-important document ie, the bill of lading. The submission of Trengganu that the manipulation of the bill of lading was the result of the appellants' misrepresentation, is unsupported by evidence.