Indian Ocean Fertilisers (Pty) Ltd (Indian Ocean) was the owner of a cargo of bulk sulphur. On 11 March 1988 Indian Ocean entered into a contract of affreightment with South African Marine Corp (Pty) Ltd (Safmarine) to carry the sulphur from Vancouver or Port Moody in Canada to Richards Bay, South Africa. The owners of the MV Menalon and Naves Galates Navegacion SA (Naves), acting as agents for Safmarine, entered into a charterparty on the NYPE form with amendments.

Indian Ocean's sulphur was loaded onto the Menalon at Vancouver. As a result, the provisions of the Canadian Carriage of Goods by Water Act 1936 (the Canadian Act) became compulsorily applicable to this cargo. The Canadian Act, which gives effect to the Hague-Visby Rules in Canada with amendments, provides in art 4.2.g of its Schedule that: 'Neither the carrier nor the ship shall be responsible for loss or damage resulting from: ... arrest or restraint of princes, rulers or people, or seizure under legal process.'

While the Menalon was loading at Vancouver it was arrested on 6 July 1988 at the suit of Ferruzi USA Inc by order of the Federal Court of Canada. The Menalon was released from arrest on 5 August 1988. On the same day the Menalon sailed for Richards Bay and arrived on 20 September 1988, when it proceeded to discharge the cargo. Indian Ocean sued for damages for the delay.

There were two questions for the Court:

1. Whether the cargo was carried under contracts of carriage 'evidenced' by the bills of lading;
2. Whether the arrest of the Menalon fell within the ambit of the Canadian Act; more particularly, whether such an arrest fell within the ambit of the expression 'seizure under legal process'.

Held:

1. The first question is answered in favour of the plaintiff;
2. The second question is answered in favour of the defendant.

On the first question, this was a case of a time charter which was concluded after the contract of affreightment. On the face of the bill of lading, Safmarine was not the charterer of the Menalon. The terms contained in the bills of lading, on a literal reading and within the framework of the Hague-Visby Rules and the Canadian Act which apply to them, evidence and regulate a contract of carriage between the plaintiff and the defendant, rather than an incorporation of the contract of affreightment which would result in the bills being regarded as receipts only. The first question is therefore answered in favour of the plaintiff.

On the second question, there seems little doubt that under English and South African law, the 'restraint of princes' clause would not be interpreted as covering a loss consequent upon legal process, whether due to 'arrest', 'restraint' or 'seizure'. Is the Canadian Act to be interpreted as an unshackling of the traditional fetters placed on the 'restraint of princes' clause, or is its phrase 'seizure under legal process' to be regarded simply as an extension sui generis of the words that preceded it? One must have regard to the ordinary meaning of the words in question seen in the context of the whole provision, and only if ambiguity arises, would it be relevant to look further afield into the presumed object underlying the enactment.

Article 4.2.g, as restated in the Canadian Act, contemplates two situations: an 'arrest or restraint of princes, rulers or people' or 'seizure under legal process'. Each is separated by a comma, which would demarcate their separate entities, and which effectively removes the word 'arrest' in the first situation from any application to the second. While by this test 'seizure under legal process' stands to be interpreted independently, its conjunction with what precedes it may nevertheless cast a light on what was meant by 'seized'. So far as the phrase in its entirety is concerned, it finds a counterpart in the US Harper Act of 1913 [sic: the US Harter Act 1893]. The distinction being made is clear. On the one side is the executive or administrative act which characterises the concept of 'restraint by princes', and on the other the judicial process which, by another route, also results in a seizure of the vessel or its cargo.

Tautology is not to be inferred from the wording of the Canadian Act. Article 4.2.g in the Canadian Act introduces an additional factor for excluding liability. If 'seizure under legal process' was to be regarded as that type of seizure which characterises a 'restraint by princes', there would be scant reason to spell it out again. The phrase under discussion must be interpreted as dealing with aspects not contained in what goes before.

In view of this conclusion, it is unnecessary to decide what may have prompted the US and Canadian legislatures to depart from the hitherto accepted view of 'restraint of princes'. Whatever the reason, it would be doing a disservice to the ordinary rules of interpretation to hold that the additional words were not intended to have additional meaning. Their juxtaposition with the concept of forcible dispossession which characterises the restraint by princes, rulers, pirates, rovers and the like, points out irresistibly that any similar deprivation brought about by legal process will fall within the exception. That came about with the vessel's arrest at the instance of Ferruzi USA Inc.