Captor's claim

FREIGHT, GENERAL AVERAGE, AND SALVAGE

§655

Three different situations may arise in prize cases involving the question of the allowance of freight. The captor of a vessel which is condemned may seek the payment of freight by the owners of the released cargo. Ship-owners may ask the captor to pay freight on condemned cargo. Finally, a prize court may be called upon to adjudicate claims for freight arising between ship-owners and cargo-owners when capture or condemnation terminates or interferes with the voyage.

A German vessel laden with neutral goods, bound from New Orleans to German ports, was taken to the British port of Plymouth and condemned as prize. The British Prize Court held that the captors were not entitled to freight on that part of the neutral cargo released. Sir Samuel Evans said:

The Crown claim to have a lien for the freight alleged to be payable in respect of the portion of the cargo released, and to have it paid before the release. The argument on behalf of the Crown is that the shipowners are, by the German commercial law, entitled to some freight in respect of this released cargo, although it was not, and cannot be, delivered in Germany at the port of destination, and that as captors they are entitled to what the ship has earned as well as to the ship herself. This sounds quite logical, but the practice of Prize Courts (which has to deal with multifarious business affairs) shews that, although substantial justice is done, the results of what strict logic may appear to involve cannot always be attained. The old rule as to whether captors of an enemy vessel were also entitled to freight was quite clear.

Whenever a captor brought goods to the port of actual destination according to the intent of the contracting parties, he was held entitled to the freight, on the ground that the contract had been fulfilled, but in all other cases he was held not entitled to freight, although the ship might have performed a very large part of her intended voyage.

The old rule, as stated above, must, in my opinion, still be adhered to as part of the Law of Nations.

The Roland, I Br. & Col. Pr. Cas. 188, 192-194, II Ll. Pr. Cas. 253, 279–282 (1915). See also the statement by Judge Grain of H.B.M. Prize Court for Egypt in Floating Craft of the Deutsches Köhlen-Depot, Port Said, II Br. & Col. Pr. Cas. 439, 450 (1916).

A German bark sailed before the war in 1914 with a British cargo from a British port for South Africa. Upon approaching South Africa after the outbreak of war it was captured. The vessel was condemned and the cargo released. Half the freight was to be paid upon unloading and this freight was condemned. The Heinz, Cases Decided in the Prize Courts of South Africa 61 (1915).

A German vessel sailing from Germany in 1914 prior to the war reached Ceylon after war began and was there condemned as an enemy vessel. The consignees were the ship's agents and had a running account with the ship-owners so that the consignees merely credited the amount due for freight to the ship-owners. The Prize Court for Ceylon held that despite this arrangement the captors were entitled to the freight, since the cargo had been brought to its destination. The Australia, II Br. & Col. Pr. Cas. 315, 334 (1916).

In connection with its endeavors to secure the release of American goods seized and detained by British authorities, the Department of State instructed the Consul General at London to take the position that American goods on vessels diverted, detained, or seized, which had sailed before the war, were entitled to release free of freight charges. On December 23, 1914 the British Foreign Office stated that

as regards freight in the case of cargoes on enemy vessels, it is the decision of His Majesty's Government that freight will only be charged on such cargoes when it has been earned, i.e., when the cargo concerned has been brought to its original destination, save in the cases mentioned subsequently in this note. Neutral shippers to whom cargo is released will not therefore (save in the cases subsequently mentioned) be required to pay freight, unless the voyage of the vessel carrying the cargo is complete, or the contract of affreightment provides for pro rata freight. The cases in which payment of freight will be required in any event, are those in which the cargo released would have been condemned either to confiscation or to detention if it had been taken into the prize court, but in which the neutral shipper asks for its release to him; and in these cases His Majesty's Government consider that payment of freight is a proper condition of release as an alternative to condemnation of the cargo by the prize court. The above observations apply both in the case of cargoes on ships liable to confiscation and in that of cargoes on ships liable to detention only.

The Consul General at London (Skinner) to the Secretary of State (Bryan), undated telegram received Sept. 17, 1914, MS. Department of State, file 300.115/340; the Acting Secretary of State (Lansing) to Mr. Skinner, telegram of Sept. 22, 1914, ibid./450e; 1914 For. Rel. Supp. 313–314; the British Foreign Office (Langley) to the Ambassador to Great Britain (Page) (enclosure in despatch 85880, Jan. 1, 1915, from Mr. Skinner to Mr. Bryan), MS. Department of State, file 763.72112/5672; 1915 For. Rel. Supp. 305.

A German vessel bound from an American port to England was captured shortly after the outbreak of war in 1914 by a French cruiser. The cargo was released to British claimants upon payment of freight Proportional representing the proportion of the voyage completed. The claimants' freight subsequent effort to recover the payment for freight in proceedings before the French Prize Council was unsuccessful. The council stated

Freight payable by captors on

goods shipped

before war

that each national court was free to apply its own rules with respect to the right of captors to freight and that the established French practice was to allow freight for the distance covered, even though the cargo was not carried to its original destination.

The Barmbek (June 8, 1916), Fauchille, Jurisprudence française en matière de prises maritimes (1916) 270; Scott and Jaeger, Cases on International Law (1937) 867. See also The Barmbek (Dec. 8, 1914), Fauchille, op. cit. 3.

A British vessel, loaded prior to the war in 1914 with Germanowned cargo to be carried from the British port of Bristol to the Netherlands port of Amsterdam, proceeded to Swansea, where the cargo was seized upon the outbreak of war and condemned as prize. In the Prize Court the ship-owners claimed the right to receive freight and the expenses of discharging the cargo. It was held in 1914 that some freight and expenses should be allowed. Sir Samuel Evans said:

Since the Declaration of Paris, and indeed before that by the practice adopted in the Crimean War, neutral vessels laden with enemy goods could not be prevented from continuing their voyages and so earning their freight, except where the goods were contraband, or where the pursuit of the voyage would amount to a breach of blockade-and in these cases no freight would be allowed. With British vessels it is quite otherwise; they must not carry enemy goods, or proceed on voyages for which such goods were shipped. In the present case there was accordingly an "incapacity to proceed," attributable not only to the cargo, but also to the ship.

It would not be right, however, in my opinion, to withhold from the shipowners all the freight on account of the "incapacity of the ship" where the shipment took place before the war and the voyage was partly accomplished.

What, then, ought to be the rule? It is possible that even if the cargo is not carried to its destination it would be just in some cases that the whole amount of the freight should be paid. For instance, suppose an enemy cargo were shipped before the war from Australia for Hamburg, and were seized near British waters and taken to Bristol; it may be that it would be fair to pay the shipowners the full freight.

...

In the present case, where only a comparatively small part of the voyage was made, I think the whole freight ought not to be allowed. What part should be allowed I will refer to the Registrar and Merchants to say...

The only rule which I propose to state for the guidance of the Registrar and Merchants is this: Such a sum is to be allowed for freight as is fair and reasonable in all the circumstances, regard being had to the rate of freight originally agreed (although this is not necessarily conclusive in all cases), to the extent to which the voyage has been made, to the labour and

cost expended, or any special charges incurred in respect of the cargo seized before its seizure and unlivery, and to the benefit accruing to the cargo from the carriage on the voyage up to the seizure and unlivery; but no sum is to be allowed in respect of any inconveniences or delay attributable to the state of war, or to the consequent detention and seizure.

As to the items for extra cost of discharging the goods at Swansea and shifting, I think these should go against these parcels of cargo, and should be allowed.

The Juno, [1916] P. 169, 174–176, I Ll. Pr. Cas. 177, 188-189.

After referring to Lord Parker's statements in The St. Helena, [1916] 2 A.C. 625, 629–630 (post, p. 338), Garner writes:

pas

"Although the decision of Sir Samuel Evans in the case of the Juno was never directly overruled by the Judicial Committee, the sages from their Lordships' opinion in the St. Helena would seem to be a disapproval of the principle laid down by him. There were, to be sure, differences between the two cases but in both cases the question was whether a British shipowner was entitled to freight where the completion of the voyage had become impossible because it was illegal; Sir Samuel thought he was, whereas the Judicial Committee held otherwise." Garner, Prize Law During the World War (1927) 668.

A British vessel sailed in July 1914 from South America for German ports with a cargo of grain. After the outbreak of war her owners diverted the vessel to the nearest British port of Weymouth. The Admiralty directed that she be sent on to Cork, where she discharged the cargo, which was condemned as prize. From the proceeds the Admiralty paid freight due on the cargo from the South American port to German ports under the contract of carriage. The ship-owners claimed additional freight from Weymouth to Cork and compensation for the detention at Weymouth. Sir Samuel Evans in disallowing these claims referred to The Juno (I Br. & Col. Pr. Cas. 151) and said:

...

"I intended to say in The Juno-and I think I did say that no sum ought to be allowed to British shipowners in respect of any delay or inconvenience which might occur to a ship as the result of her diversion or detention for the purpose of seizure, and making the unlivery of confiscable enemy cargo. When I referred to the inconvenience or delay ... I intended to include any inconvenience or delay caused by the detention or diversion of the vessel from her chartered course. In this case nothing happened except the delay and inconvenience which was caused by her diversion in consequence of the war. It is a loss, if it be a loss, to the shipowners as a result of the war, and for which, unfortunately, they cannot have any compensation. It is a loss like the losses which have to be submitted to by other citizens in other capacities and other walks in life I think in this case that the owners of the vessel, who have been paid their full freight, have been generously treated.

...

"With regard to the alternative claim for 16£. 14s. 8d., that is a claim which the shipowners put forward upon a comparison of estimated charges at Hamburg and Emden with the charges which have been incurred at Cork.

...

... I think it is quite clear

After outbreak of war

Allied ships with enemy

cargo

Neutral vessel-noncontraband cargo

...

that these losses are losses which the shipowner sustains by reason of the war, and which he is not entitled to have brought into account at all in the estimation of the freight . . .”

The Tredegar Hall, I Br. & Col. Pr. Cas. 492, 495-496, II Ll. Pr. Cas. 369, 374-375 (1915).

The British Prize Court held that no freight should be allowed an Allied (Russian) ship which carried German goods destined from Chile to the Netherlands after the outbreak of war in 1914. The vessel put in at a British port, and the cargo was seized as enemy property. Sir Samuel Evans said:

.. It is a fundamental principle of Prize Law that all trade with the enemy is prohibited, under the penalty of confiscation, not only to subjects of the belligerent country, but also to subjects of allies in the war trading with the common enemy. And the penalty for such trading by the subject of an ally is the forfeiture in the Prize Courts of the ally of his property engaged in such trade.

Strictly, therefore, the ship itself, being the property employed in the illegal trade, is liable to confiscation.

The Crown in the case now before the Court did not seize the vessel, or, at any rate, do not ask for its confiscation. But it follows from what I have said that there is no kind of ground for the claim for freight and other expenses, and they must be disallowed.

The Parchim, IV Ll. Pr. Cas. 375, 385-387, I Br. & Col. Pr. Cas. 579, 587-588 (1915).

When a non-contraband cargo of tobacco was seized under the British Reprisals Order of March 11, 1915 and sold by order of the Prize Court, Norwegian ship-owners were awarded a portion of the freight, but not damages for detention or demurrage, against the proceeds of the enemy cargo. Lord Sterndale said:

Under the charter a lump sum of 6000£. was to be paid for freight-3000£. to be paid at once, and 3000£. on arrival of the ship at Copenhagen. As the ship never did arrive at Copenhagen, the second 3000£. has not become payable according to the terms of the charter. A considerable amount of expense was incurred for port dues, also for tug assistance, and so on, both at Kirkwall and at Bristol in the consumption of extra coal and extra wages, in addition to what would have been necessary if the vessel had gone straight to Copenhagen. The shipowners claim in respect of those additional expenses, and for the freight

I think as to the freight and expenses the shipowner is entitled to some payment. I do not say that he is entitled to the sum of 3000£.; that may or may not be so. I think what is payable to him in respect of that must be taken on the basis which the