Authored by Malcolm Hartwell.
Evergreen Marine (UK) Ltd v Green Care Trading, Court of Appeal in Malta
On 2 February 2026, the Court of Appeal in Malta handed down a judgment which grappled with the obligation of numerous parties under standard liner bills of lading to pay for all of the storage, demurrage, detention and other charges that a cargo attracts following lengthy storage. Claims for these charges have increased dramatically in both amount and number in the last several years and we have no doubt that the huge number of containers currently stuck in the Arabian Gulf will add to shipping lines and ‘cargo interests’ concerns with regard to these charges.
In this case, Evergreen had commenced proceedings against Green Care Trading to recover detention and demurrage charges on two containers which had been sitting in Xingang Port for over four years. The two containers of scrap plastic had been sold by Noel Cefai, trading as Green Care, to a Chinese entity and the containers were delivered to Xingang in February 2013. The consignee failed to take delivery of the cargo and denied any knowledge of or commercial relationship with Green Care. After two years, Evergreen claimed to have incurred over €100 000 in relation to demurrage and storage costs. These charges continued to escalate until the cargo was eventually destroyed almost four years after it had arrived in Xingang.
Evergreen instituted proceedings in Malta against the named shippers on the bill of lading and against Green Care and Noel Cefai as the Shippers agents. They did so on the basis of the obligation by the defined merchant in the bill of lading to pay all charges due under the bill of lading. The definition of “merchant”, which is similar in most liner bills of lading, included:
“The shipper, holder, consignee, the receiver of the goods, any person owning or entitled to possession of the goods or this bill and anyone acting on behalf of any such persons.”
In practice, the effect of this clause is that shipping lines can look to not only the parties named in the bill of lading and the parties who own the cargo or hold the bills of lading, but also to any of their agents for recovery of their costs. The lines’ decision in this regard is usually driven by who they are most likely to recover the money from. This depends on both the parties’ financial standing and the jurisdiction in which they carry on business.
The trial court dismissed Evergreen’s claim on the basis that it was implied that, because the consignee was obliged to and entitled to take delivery of the cargo, the term “merchant” could only logically refer to the consignee.
The court of appeal rejected this argument, but did provide some relief to the shipper. Malta’s Roman law based legal system has evolved into a mixture of civil and common law principles. As is the case in South Africa and most common law countries, Malta takes the view that a bill of lading, like any other commercial contract, is evidence of contract between the parties and must be interpreted accordingly.
Although the bill of lading described FMS Seaway AG c/o Canusa Hershman Recycling Company as the shipper, FMS Seaway and Canusa denied any involvement in the shipment and Green Care was the actual shipper, based on Noel Cefai’s evidence. The court of appeal held that Green Care fell with the broad definition of “merchant” and was in principle liable for any charges arising out of the carriage and storage of the two containers.
The court of appeal however accepted Green Care’s arguments that Evergreen was obliged to mitigate their loss. This is a common contractual and delictual damages principle in many jurisdictions, including South Africa. The court found on the facts that Evergreen had failed to timeously mitigate the loss. It accepted that Evergreen was entitled to store the containers and charge for that service while negotiations were conducted with the shipper for redelivery or release of the cargo. On the facts however, the court held that Evergreen’s duty to mitigate meant that by October 2013, eight months after delivery when Evergreen advised the shipper that it intended destroying the cargo, it should have taken immediate steps to do so. It was not entitled to delay in doing so.
The effect was that Evergreen recovered certain of its charges from Noel Cefai even though neither he nor Freen Care were named on the bill of lading.
This is a reminder to everybody involved in international trade, particularly freight forwarders and banks who do not actually own the cargo, that being named on a bill of lading or being an agent for those parties may attract considerable liability if the consignee does not take timeous delivery.
The decision sounds a warning to shipping lines that courts may seek to reduce the detention and demurrage charges that can be recovered if lines do not take reasonable steps to mitigate their loss by timeously disposing of cargo not collected by the consignee.