PS Chellaram & Co Limited v China Ocean Shipping Company

The case of PS Chellaram & Co Limited v China Ocean Shipping Company was heard in the High Court of Australia. The dispute concerned the interpretation of clause 10(2) of a bill of lading, specifically whether it encompassed a liability in conversion. The appellant, PS Chellaram & Co Limited, argued that the release of goods without the surrender of the bill of lading constituted a conversion, and that this liability was not covered by the wording of clause 10(2).

The central legal issue before the High Court was the proper construction of clause 10(2) of the bill of lading. The court was required to determine whether the phrase "liabilities under the bill of lading" extended to cover a claim for conversion arising from the intentional release of goods without the surrender of the bill of lading. This involved an analysis of the natural and ordinary meaning of the words used in the clause, and whether the conduct of the respondent fell within that meaning.

The appellant contended that a literal application of the words in clause 10(2) did not include liability in conversion. They argued that the act of releasing goods without the surrender of the bill of lading was a fundamental departure from an essential term of the contract and amounted to a conversion. The appellant further submitted that the presence of wider language in other clauses, such as 10(3) and 22(3), suggested that the narrower wording of clause 10(2) was deliberate and did not intend to cover conversion. The court was invited to consider the nature and object of the contract in its interpretation.