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Malik Co v Central European Trading Agency [1974] 2 Lloyd's Rep. 279

Malik Co v Central European Trading Agency [1974] 2 Lloyd's Rep. 279

Malik Co v Central European Trading Agency

Queen's Bench Division (Commercial Court)

Mr. Justice Kerr

Apr. 4, 1973; May 14, 1974

Sale of goods (c.i.f.) — Export licence — Licence required for export of seeds from the Sudan — Duty of seller to take reasonable steps to obtain licence — Licence refused by Sudanese Ministry of Economics — Goods never shipped — Whether sellers could plead "prohibition of export" clause to relieve them from liability — Whether sellers had taken reasonable steps to obtain licence — Incorporated Oil Seed Association contract no. 67.

By a contract dated Nov. 10, 1969, Malik agreed to sell to Central European Trading Agency Ltd. ("CETACO") 500 tons (5 per cent. more or less at sellers' option) of Sudanese Sesame seed at £94 per ton c.i.f. Ancona. Shipment was to be made from the Sudan in January/February, 1970. The contract incorporated the terms and conditions of the Incorporated Oil Seed Association contract no. 67 , and contained (inter alia) the following clause: 12.

Cancellation. This contract is to be void if shipment be prevented by hostilities, prohibition of export or blockade, or by any executiveor legislative act done by or on behalf of the Government of the territory where the Port Of Shipment named herein is situate.

On the same day CETACO agreed to sell to Industrie Chimiche Italia Centrale S.P.A. ("ICIC") the same quantity under similar terms except that the price was £94 10s. per ton.

When the contract was concluded, Malik did not know that an export licence was needed, and did not discover this until the third week of February, 1970. Malik then applied to the Sudanese Ministry of Economics, Trade and Supply for a licence, but this was refused. No shipment was made by the end of February, and CETACO agreed to extend the period to Mar. 31, and on being informed about the licence difficulties, extended it further to Apr. 30. In March Malik made two appeals against the Ministry's decision but both were unsuccessful. In April Malik made an approach to the Under-Secretary of the Ministry to secure a reversal of the decision, but this was also unsuccessful. No goods were shipped under either contract. There was no evidence that if the application for a licence had been made in November and December, 1969, it would have been refused. Malik pleaded that due to their inability to obtain the licence they were excused from liability under cl. 12. CETACO in their turn relied on the same ground as a defence for nonperformance vis-à-vis ICIC. The matter was referred to arbitration and an umpire awarded damages against Malik and CETACO respectively. An appeal was made to the Board of Appeal of the Incorporated Oil Seed Association which made its awards in the form of special cases and affirmed the umpire's award the question of law for the Court being

Whether Malik and CETACO are liable in damages for their failure to perform the respective contracts.

by Q.B.D. (Com. Ct.) ( Kerr, J. ), that (1) Malik were the parties responsible for obtaining the export licence and were under aduty to use their best endeavours to obtain one ( see p. 283, col. 2 ); 

— Anglo Russian Merchant Traders Ltd. v. Batt (John) & Co. (London) Ltd., [1917] 2 K.B. 679, applied . (2)

On the evidence, Malik had not used their best endeavours to obtain a licence ( see p. 283, col. 2; p. 284, col. 1 ); 

— Societe D'Avances Commerciales (London) Ltd. v. Besse (A.) & Co. (London) Ltd., [1952] 1 Lloyd's Rep. 242 , and Brauer & Co. (Great Britain) Ltd. v. Clark (James) (Brush Materials) Ltd., [1952] 2 Lloyd's Rep. 147, considered . (3)

The answers to the questions of law in both special cases were "Yes" ( see p. 285, cols. 1 and 2 ).

Awards upheld.

The following cases were referred to in the judgment:

Anglo-Russion Merchant Traders Ltd. v. Batt (John) & Co. (London) Ltd., (C.A.) [1917] 2 K.B. 679 ; 

Brauer & Co. (Great Britain) Ltd. v. Clark (James) (Brush Materials) Ltd., (C.A.) [1952] W.N. 422; [1952] 2 Lloyd's Rep. 147 ; 

Smyth (Ross T.) & Co. (Liverpool) Ltd. v. Lindsay (W. N.) (Leith) Ltd., [1953] 1 W.L.R. 1280; [1953] 2 Lloyd's Rep. 378 ; 

Societe D'Avances Commerciales (London) Ltd. v. Besse (A.) & Co. (London) Ltd., [1952] 1 T.L.R. 644; [1952] 1 Lloyd's Rep. 242 ; 

Windschuegl (Charles H.) Ltd. v. Pickering (Alexander) & Co. Ltd., (1950) 84 Ll.L.Rep. 89

These were awards in the form of special cases stated by the Board of Appeal of the Incorporated Oil Seeds Association in disputes arising between 

(i) Malik Co. and Central European Trading Agency, and 

(ii) Central280 European Trading Agency and Industrie Chimiche Italia Centrale S.P.A., concerning contracts for the sale of quantities of Sudanese Sesame seed c.i.f. Ancona, the question being whether the contracts were void because an export licence to export the goods from the Sudan was not obtained. Mr. Basil Eckersley (instructed by Messrs. Richards, Butler & Co. ) for Malik Co.; Mr. Nicholas Legh-Jones (instructed by Messrs. Ingledew, Brown, Bennison & Garrett ) for Central European Trading Agency; Mr. A. B. R. Hallgarten (instructed by Messrs. Crawley de Reya ) for Industrie Chimiche Italia Centrale S.P.A. 

The facts are stated in the judgment of Mr. Justice Kerr.

Judgment was reserved.

Wednesday, May 14, 1974JUDGMENT Mr. Justice KERR:

I have before me two awards in the form of special cases stated by the Board of Appeal of the Incorporated Oil Seed Association. It is convenient to deal with them together in the same way as at the hearing since they both arise out of what is in effect a "string" contract and since the main, and to my mind decisive, issue is common to both. I will refer to the parties for convenience as "Malik" and "CETACO" and "ICIC", the latter being the initials of the other two parties. All three were at all material times dealers in oil-seeds, Malik carrying on business in Khartoum in the Sudan, CETACO in Geneva, Switzerland, and ICIC in Italy.

By a contract dated Nov. 10, 1969, Malik agreed to sell to CETACO 500 tons (5 per cent. more or less at seller's option) of Sudanese Sesame seed at a price of £94 per ton c.i.f. Ancona. Shipment was to be made "from origin", i.e., from the Sudan, during January/February, 1970. The contract incorporated the terms and conditions of I.O.S.A. contract no. 67 . The only provision which it is necessary to cite from this is cl. 12 headed "Cancellation":

This Contract is to be void if shipment be prevented by hostilities, prohibition of export or blockade, or by any executive or legislative act done by or on behalf of the Government of the territory where the Port of Shipment named herein is situate. On the same date CETACO entered into a contract of sale to ICIC on the same terms, at any rate so far as material for present purposes, except that the price per ton was £94 10s.

In the event no goods were shipped and no documents tendered under either contract. Malik contended that due to their inability to obtain the necessary export licence they were relieved from their obligations under their contract by virtue of cl. 12 or alternatively by the doctrine of frustration. The consequent dispute between Malik and CETACO was referred to arbitration under the arbitration rules of the I.O.S.A. CETACO, while denying that Malik had any defence to a claim for damages for non-shipment, in their turn then relied on the same grounds as a defence for nonperformance vis-à-vis ICIC, and the latter dispute was similarly referred to arbitration. In both cases Mr. A. J. Juster was appointed as umpire and awarded damages against the sellers, Malik and CETACO respectively. He awarded £16,377.10s. as damages against Malik in favour of CETACO, and £15,679.3s. against CETACO in favour of ICIC. In both cases there was then an appeal to the Board of Appeal of I.O.S.A. The Board made its awards in the form of the special cases now before me and in both cases affirmed the Umpire's award subject to the opinion of the Court on the question of law whether Malik and CETACO are liable in damages for their failure to perform the respective contracts of sale. Nothing now turns on the amounts awarded. 

It was conceded on behalf of CETACO that if Malik have no defence on the ground that they were unable to obtain an export licence, then CETACO equally have no defence as against ICIC since CETACO themselves did not take any steps to obtain an export licence under their contract of sale but in effect relied on Malik for this purpose. This issue is therefore common to both special cases and the facts found which are relevant to this issue are to all intents identical. It is therefore convenient to deal with this issue on the basis of the special case stated as between CETACO and Malik. But ICIC also contend that there are additional grounds on which they could succeed against CETACO even if Malik have a good defence against CETACO. I will mention these later, but they were not argued before me since I agreed with Counsel for all three parties that these issues should be left over for the time being if Malik and CETACO fail on the main issue.

I must now summarize or quote the material passages from the special case stated between CETACO and Malik. Since 1968 the export of Sesame seeds (a type of oil seed) from the Sudan was permissible only under licence issued by the Sudanese Ministry of Economics, Trade and Supply. An exporter first had to register the contract of sale with the Bank of Sudan and then to make an application for an export281 licence. These were separate steps, and it did not follow automatically that the licence would be granted if the contract had been registered. Without a licence it would have been unlawful and impossible for Malik to have shipped goods of the contract description from a Sudanese port. The Board concluded, and I agree, that in the absence of any express term in the contract, Malik were in the circumstances the party responsible for obtaining the export licence and that the measure of their obligation was that laid down in Anglo-Russian Merchant Traders Ltd. v. John Batt & Co. (London) Ltd., [1917] 2 K.B. 679 and many subsequent cases. This is that they were obliged to use their best endeavours (per Lord Reading at p. 685) or reasonable diligence (per Lord Justice Scrutton at p. 689) to obtain the necessary licence. The precise form of words does not matter, and it is in each case a question of fact whether the party responsible could and should in all the circumstances have done more than he did.

Prior to this contract Malik had exported other products from the Sudan but not Sesame Seeds. When the contract was concluded no-one in Malik realized that an export licence was needed, and nor did anyone take any steps to see if one was needed. Immediately after the conclusion of the contract Malik procured its registration with the Bank of Sudan as required. But until about the third week of February, 1970, i.e., only two weeks or less from the end of the shipping period, Malik remained ignorant of the fact that an export licence was required. The case finds that they had the necessary goods available for shipment "during the month of February and throughout March and April, 1970". 

In the third week of February, Malik made an application for an export licence to the Ministry, but this was refused without any reason being given. No shipment having been made by the end of February, CETACO agreed to extend the shipment period until Mar. 31. When they were later informed about the licence difficulties they extended this period further until Apr. 30.

I must now set out six paragraphs from the special case as follows: 

17. Although Malik's application for the Export Licence was not made until the third week of February, 1970 it was at the relevant time not unusual for a Sudanese exporter to defer application for such Licence until he had goods actually available for shipment. Applications for Export Licences were in the ordinary course dealt with by the Ministry promptly, i.e. within a day or so.

18. From the somewhat sparse evidence adduced before us we conclude that the predominant concern of the Ministry was to check the price in the contract. If the contract price was not in the region of the market price, the Licence would most likely be refused. In the 1969-70 Sesame Seed season the price of the commodity rose considerably during the period December 1969-April 1970.

19. No time limit was imposed by the regulations of the Ministry current between November 1969 and April 1970 for the approval of Export Licences and, as a matter of practice, exporters used to apply for Licences at any time before shipment.

20. Be that as it may, we do not consider that, in so far as it is a question of fact, an application to the Ministry for an Export Licence on an unspecified date in the third week of February, 1970, within one week or so from the end of the original contractualperiod of shipment under a contract made on 10th November, 1969, constituted the exercise of due diligence to obtain such a Licence since, within the remaining period available before the time for shipment lapsed there would be inadequate opportunity to appeal against any rejection by the Ministry of such application and to effect shipment if such an appeal was granted. 

21. There was in operation at all material times a procedure whereby an exporter who was refused a Licence could appeal to higher officials in the Ministry for a fresh determination to be made. Malik made two such appeals in March, 1970 but both were unsuccessful.

22. No evidence was produced by Malik to establish that, if the application for a Licence had been made in November or December 1969 it would nevertheless have been refused. The only other fact which it is necessary to mention is that in about the third week of April, Mr. H. Malik, the proprietor of Malik, made a personal approach to the Under-Secretary of the Ministry in an attempt to secure a reversal of the refusal of the application for an export licence, but this was also unsuccessful. After some inconclusive communications between the parties the matter was then referred to arbitration. The issue was whether Malik's failure to obtain an export licence excused them from performance by virtue of cl. 12 on the ground that shipment was prevented by an executive act done by or on behalf of the Sudanese Government. Malik also alternatively relied on the doctrine of frustration, but it is unnecessary to deal with this separately. It was common ground that if Malik could show on the facts found in the special case that they had used their best endeavours to obtain the necessary export licence, then they were protected by cl. 12. It was also common ground that Malik's ignorance of the legal requirement for an export licence until282 about the third week of February was not a point on which they could rely and that the case must be judged as though they had known of this requirement when the contract was made.

In my judgment the short answer to this case is that in order to avoid liability for non-shipment Malik needed to obtain a finding to the effect that they had used their best endeavours but had nevertheless failed to obtain a licence, or alternatively that a licence was in any event unobtainable, whereas in the result Malik have not only failed to obtain either of such findings but are in fact faced with findings in the opposite sense in pars. 20 and 22 of the special case. The law is clear and the case illustrates the great difficulty which faces sellers who seek to avoid liability for non-shipment due to a failure to obtain the necessary licence. I need only refer to two passages which summarize the position in such cases. 

In Societe D'Advances Commerciales (London) Ltd. v. A. Besse & Company (London) Ltd., [1952] 1 T.L.R. 644 at p. 646 Mr. Justice Sellers (as he then was) said this:

The umpire has found that it was the sellers' duty to take all reasonable steps to obtain the export licences for the export of the goods of the contractual description, and that duty is not disputed, and is, indeed, clear. He has also found that the sellers failed to take all necessary steps to obtain such licences. That is a finding of fact. It cannot be, and has not been, suggested that there was not evidence on which the umpire could come to that conclusion, and subject to a submission made by counsel on behalf of the sellers, that would justify entirely the conclusion to which the umpire came that the sellers were in default on both contracts. 

I was referred to an apt passage in the judgment of Mr. Justice Devlin in Charles H. Windschuegl Ltd. v. Alexander Pickering & Co. Ltd. where, dealing with a similar position which arose in that case, he said:

Consequently, what they have to do in order to set up a defence on this part of the case is to say, in effect, that even if they did not take any steps they were clear, because no licence would have been granted. That is always a difficult burden for a party to assume. He has to say, in effect, "I did not do what I ought to have done, because if I had done that which I ought to have done it would have made no difference". It means entering into the realm of hypothesis, and it places a heavy burden on a party who desires to sustain his case by that means. I think that before I accepted it I should have to be satisfied that it was quite clear that if a further application had been made for a licence for October shipment it would not have been granted. The evidence, in my view, falls far short of that. 

And in another passage the learned Judge, a little later, said, after reviewing the evidence: 

That is enough to destroy the defendants' case. It is not for the plaintiffs to prove that it would have been granted in sufficient time; it is for the defendants to satisfy me that it was no use their attempting really to make the application, because it was foredoomed to failure. 

Then Mr. Justice Sellers goes on: 

That is a clear statement of the position which arises where you get a finding that sellers have not taken all reasonable and necessary steps to obtain the export licence, and the sellers must discharge that high burden . . .

I also turn shortly to a passage from the judgment of Lord Justice Denning (as he then was) in Brauer & Co. v. James Clark, [1952] 2 All E.R. 496 at p. 501, where he said this, after referring to a clause which made performance of the contract subject to the obtaining of an export licence: 

This still leaves many questions unanswered. Whose duty is it, for instance, to apply for the licence? and what is the extent of the duty? The parties have not themselves provided the answers, and it is for the court to find them. It is, I think, clearly the duty of the sellers to apply for an export licence and to use due diligence and take all reasonable steps to get it [—and then he referred to the Windschuegel case and the Besse case to which I have referred, and he went on:—] If a licence is granted, no trouble arises. The sellers must ship the goods. But, if it is refused, conditionally or unconditionally, many questions may arise. How far is it the duty of the sellers to overcome the difficulties thus presented? Must they fulfil the conditions prescribed by he licensing authorities in order to get a licence? Must they make another application if the first one fails? Ought they to have applied earlier? and so forth. The answer to all these questions is, I think, that this clause is a special exemption inserted in favour of the sellers. In order to enable them to take advantage of it they must show that, notwithstanding that all reasonable steps were taken by them, they could not obtain a licence to export during any part of the shipment period, or, alternatively, that it was useless for them to take any such steps, or any further steps, because it was quite impossible for them to obtain a licence.


Mr. Eckersley strove valiantly to overcome these diflculties on behalf of Malik. There appears to be no reported case in which a seller in the position of Malik has succeeded in satisfying a Court that he is entitled to avoid liability because of the impossibility of obtaining the necessary export licence. Mr. Eckersley countered this by pointing out that the difference between this case and other reported cases is that Malik in fact made the necessary application and in effect appealed three times against its refusal, whereas in the other cases it was clear that some necessary step by the exporter had been omitted or that he had done nothing at all. This may well make the result of the present case harsher as a matter of degree, but it cannot distinguish it as a matter of principle. It is to be noted, for instance, that in the passage from Brauer v. Clark , which I have just read one of the questions posed is whether the sellers ought to have applied for a licence earlier than they did. In this connection Mr. Eckersley strongly criticized the finding in par. 20 which I have set out and also a later comment in the special case in which the Board of Appeal expressed itself as follows:

We do not consider that the initial failure by Malik to exercise due diligence in applying for an Export Licence was in any way absolved by the grant of extensions of time for shipment by CETACO before the end of February, 1970 and on 26th March, 1970. Mr. Eckersley criticized these passages on two main grounds. First, he submitted that the Board had been guilty of what he called a "startling fallacy" in relation to causation. His argument was that since the time for shipment was in fact extended to enable all possible appeals to be made, and since these were in fact made, but without success, it followed that Malik's failure to apply earlier was ultimately non-causative. Since in par. 20 Malik were only criticized for having delayed their application on the ground that this left them an inadequate opportunity to appeal before the end of the shipment period, Mr. Eckersley contended that this criticism must fall to the ground once the shipment period had been extended and all proper appeals thereafter made. His second contention was that, quite apart from this, Malik were in any event not to be criticized for having delayed their application because it appeared from the findings in pars. 17 and 19 of the special case that this was not an unusual practice among Sudanese exporters. He therefore submitted that Malik had in effect acted in accordance with the normal local practice and had therefore used their best endeavours or taken all reasonable steps to obtain the licence so as to satisfy their contractual obligation.

I cannot accept either of these submissions. In my judgment the Board of Appeal was not only not guilty of any fallacy in relation to causation, but was entirely correct in the comment which I have cited. As already mentioned, it was common ground that Malik's ignorance until the third week of February of the necessity for an export licence under the local law could in no way excuse them. They must therefore be treated as though they had known throughout that a licence was required. They must also be treated as having known that an application might be refused but that there was a system for appealing against the refusal and that such appeals would require time. Assuming in their favour that they used their best endeavours during the remainder of February, after they had applied for a licence, then it is implicit in the special case that this remaining portion of the original shipment period did not allow sufficient time to enable Malik to go through the appellate process. On this basis it must then in my judgment inexorably follow that there was a substantial period before the third week of February during which Malik should have applied for a licence if they had then been using their best endeavours to obtain one, as required by the contract. Furthermore, pars. 18 and 22 of the special case show that Malik's failure to apply earlier was or may well have been causally connected with their ultimate inability to obtain the licence. Or, to put it negatively and more accurately, as a matter of law there is nothing in the special case which enables Malik to establish, as they must, that their failure to apply earlier was without consequence because an earlier application was foredoomed to failure. Not only is there nothing to this effect in the special case, but pars. 18 and 22 in fact suggest that the refusal of the licence may well have been causally connected with the rise in the market price over the contract price from December onwards. It therefore seems to me to be clear that as regards the period before the third week of February Malik can neither be heard to say "there was no reason for us to apply for a licence at this early stage" nor "it would have made no difference if we had applied earlier than we did". In the absence of findings to this effect, at least, I cannot see how Malik can succeed. 

Mr. Eckersley's second contention, that Malik can rely on the fact that they acted in accordance with the normal local practice, is in my view also untenable, both in law and on the facts found. To act in the same way as other people is by no means necessarily the same as using one's best endeavours. For instance, when the market price of a commodity rises, as in the present case, it may suit exporters to be refused a licence and it may therefore suit them to delay their application. 284 Alternatively, they may simply not bother to apply as early as they prudently should. I would therefore not accept that a bare finding that a particular exporter acted in accordance with the common practice of other exporters is by itself to be equated with a finding to the effect that he used his best endeavours. Counsel sought to draw some analogy with the law of negligence in this connection. But this point was not fully argued, and it is unnecessary for me to deal with it further since the facts found in the present case in any event fall far short of even a limited finding to the effect that Malik's delay in applying for a licence until nearly the end of the shipment period was in accordance with the general practice. All that is found is that it was "not unusual for a Sudanese exporter to defer application for such licence until he had goods actually available for shipment", that "applications for export licences were in the ordinary course dealt with by the Ministry promptly, i.e., within a day or so", and that "as a matter of practice, exporters used to apply for licences at any time before shipment". These findings are to be contrasted with the words "Be that as it may" which introduce par. 20. In my view it is implicit from this paragraph that the Board of Appeal was not only drawing the inference that there had been a failure by Malik to exercise due diligence, which is stated expressly, but also that the practices of other exporters to which reference is made may well have been insufficient to amount to due diligence. Since the facts and inferences of fact are matters for the Board of Appeal and not for me, I could not substitute my own views for theirs even if I disagreed with theirs, which I do not.

Mr. Eckersley had two further submissions. First, that if an application for a licence has once been refused, then the exporter is not under any obligation to appeal against the refusal. He submitted that if this were not so, then it would be impossible to draw the line at which further efforts to overcome the refusal could safely be abandoned. In my view this is clearly untenable. If there is machinery for appealing and no finding that any appeal was doomed to fail, then the obligation to use best endeavours clearly requires the use of the appeal system. The point at which the line is to be drawn is the point at which the tribunal of fact is satisfied that no further efforts could have made any difference to the result or that in all the circumstances it would have been unreasonable to expect the exporter to have done more.

Mr. Eckersley's final submission was that Malik's failure to apply for a licence earlier than they did and the consequences of this failure should be assimilated to cases in which a seller fails to ship during the early part of a shipment period and is then excused if a prohibition or the imposition of a licensing system prevents him from shipping during the remainder of the shipment period. This situation was discussed by Mr. Justice Devlin (as he then was) in Ross T. Smyth & Co. Ltd. v. W. N. Lindsay Ltd., [1953] 1 W.L.R. 1280 . But in my view the two situations are quite different and there is no reason why they should lead to the same result in law. 

In the Ross T. Smyth case the imposition of the prohibition was an unexpected event which supervened during the shipment period when the sellers had not failed to do anything which they should reasonably have done by that time. It was therefore held that their obligation to use their best endeavours to overcome this obstacle only arose as from that time. In the present case, on the other hand, one is not dealing with a supervening event but with a licensing system which had been in existence for a considerable period before the conclusion of the contract. The sellers in the present case were unable to show against the background of this system that their failure to take the necessary action until nearly the end of the shipment period occurred without fault on their part. Their failure to ship is only excusable if they can show that at all times after the conclusion of the contract they used their best endeavours to overcome the obstacle of the licensing system which existed throughout. The sellers in the Ross T. Smyth case, on the other hand, were under no obligation to do anything until they were faced with the supervening obstacle of the prohibition. In my view there is no analogy to be drawn between the two cases. I therefore reject all Mr. Eckersley's submissions to the effect that Malik can rely on cl. 12 or on frustration.

At the end of the argument on the main issue with which I have so far dealt I was invited by all three Counsel to indicate whether or not they should argue the other points which only arise if Malik can succeed on this issue. I must shortly mention what these were. First, CETACO reserved their position on a further finding that Malik had adduced no evidence to show that they had tried but failed to procure goods afloat and tender them under the contract, or that, even if they had tried, they must necessarily have failed to buy suitable goods afloat, and then appropriate them to the contract. Secondly, there were a number of additional contentions on which ICIC would have sought to rely in their special case against CETACO even if Malik had succeeded against CETACO in the other case. The main ones were as follows:

(a) CETACO failed to show that they could not have procured the goods from285 another exporter holding an export licence or could not have bought goods afloat. 

(b) CETACO were not merely obliged to use or to procure the use of best endeavours to obtain an export licence but were under an absolute obligation to obtain such a licence. This argument was evidently founded on the fact that, whereas CETACO were aware of the existence of the licensing system, ICIC were not.

(c) ICIC were in any event entitled to recover from CETACO the equivalent amount by way of damages for misrepresentation either at common law, as I understood it, or under the Misrepresentation Act, 1967. The reason for this is that the Special Case between ICIC and CETACO contains findings to the effect that CETACO had persuaded ICIC to agree to the extension of the shipment period to 30th April by a representation that there were difficulties in procuring shipping space for the goods and that this representation "was to the knowledge of CETACO untrue and given without reasonable or probable grounds." It was clear to Counsel and myself that the legal argument concerning all these points would inevitably take some time, probably at least an additional day, and thereby involve the parties in substantial further costs. I was also clear in my own mind at this point that Malik could not succeed on the main issue with which I have already dealt and that further argument on the other points would therefore be academic so far as the result before me was concerned. I therefore indicated my view to this effect and decided, in agreement with Counsel for all parties, that I would not hear argument or express any view about any of the other points. They will, of course, be open to the parties if the case should go further and a higher Court takes a different view.

In the upshot I therefore answer the questions of law in both special cases in favour of the buyers, respectively CETACO and ICIC, and uphold the awards for damages against the sellers, respectively Malik and CETACO.

Mr. Legh-Jones : Then your Lordship's answer to the question of law is "Yes", and I would ask for the costs against Malik.

Mr. Eckersley : I do not think I want to say anything about that, although I am not sure who set it down. There is just one small matter. I think your Lordship had, in fact, released me from the matter at a time when I think there was, amongst the references in your Lordship's judgment, a reference to all three Counsel. I think I was, as it were, out of the picture at that stage. 

Mr. Justice Kerr : You did not in fact leave the Court during that time, did you? 

Mr. Eckersley : Yes, my Lord. I clearly remember going because I thought it unusual to ask to release oneself, it is more usual to ask for witnesses to be released. I did not stay.

Mr. Justice Kerr : Could you help me by telling me what, if anything, I have said that suggested that you were a party to something which in fact you were not in my judgment? Could you here and now dissociate yourself from anything which struck you in the judgment as having nothing to do with you?

Mr. Eckersley : The procedure which was followed, as I am sure your Lordship will remember, was that I opened the case and then my friends Mr. Legh-Jones and Mr. Hallgarten came in and then it came back to me, all on the first day, and at that stage your Lordship decided that it would be sensible to carry on with the second case without my needing to be present and your Lordship then released me. So I knew nothing about what happened thereafter until I appeared before your Lordship for judgment this morning. 

Mr. Justice Kerr : I think, so far as my judgment goes, what I say happened thereafter is that Mr. Hallgarten made it clear what the other issues were which he was keeping open. You were not present at that — as I accept, of course, if you say so — but I still do not see why, insofar as I have referred to that, you are right to dissociate yourself from anything I have said.

Mr. Eckersley : I do not seek to do that, my Lord, of course. 

Mr. Justice Kerr : The record will have to speak for itself.

Mr. Hallgarten : As to the second appeal, I ask your Lordship to uphold the original award. So far as the questions of law are concerned, your Lordship said that those were answered in the affirmative. Again I think, as a matter of accuracy, your Lordship's answer to the question in 35A is "Yes" and 35B, which is the misrepresentation point, your Lordship does not answer at all. I also ask for costs.

Mr. Justice Kerr : So be it.

Referring Principles
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