The Supreme Court of England made a significant ruling that actions taken solely to obtain security do not constitute a 'claim' for the purposes of the one-year time bar under Article III Rule 6 of the Hague-Visby Rules. This decision also provides useful guidance on what a bill of lading should state if only part of the cargo is carried on deck and thus may be exempt from the Hague-Visby regime.
Shipping and Bills of Lading
Pedregal Maritime SA was the owner of the vessel Taikoo Brilliance and issued four bills of lading for the transport of New Zealand pine logs to the port of Kandla in India. Batavia Eximp & Contracting (S) Pte Ltd held these bills of lading.
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The cargo was discharged in September 2019 without presenting the original bills of lading and based on a letter of guarantee provided by the charterer. The bill of lading holders claimed that the cargo was delivered in error.
Legal Issues and Supreme Court Decisions
The bills of lading referred to London arbitration. However, in August 2020, during the one-year time bar period of the Hague-Visby Rules, the holders initiated actions in Singapore and arrested the vessel Navios Koyo, a sister ship of Taikoo Brilliance. Security was provided, and the vessel was released.
The shipowner succeeded in obtaining a stay of proceedings in Singapore in favor of London arbitration. The bill of lading holders only initiated arbitration in December 2020, more than a year after the delivery of the cargo. The arbitrator ruled that the Singapore actions did not prevent the application of the one-year time bar under Article III Rule 6.
The Supreme Court stated that obtaining security does not in itself guarantee the preservation of the original Hague-Visby claim. Fundamental actions must still be commenced in a timely manner in a competent court.
Issue of Cargo on Deck
The Supreme Court also addressed a separate issue regarding part of the cargo carried on deck. Article I(c) of the definition of "goods" excludes cargo specified in the contract of carriage as being on deck and actually carried on deck. Therefore, such cargo is excluded from the Hague-Visby regime.
Two of the bills of lading recorded the total number of logs and the number of logs that were carried on deck at the sender's risk, but did not specify which logs were actually carried there. This is important because the weight and value of the pieces of wood vary.
The Supreme Court stated that if only part of a cargo consisting of items with different values is carried on deck, the bill of lading must clearly identify the cargo intended to be carried there. This is particularly significant in cases where items have different values.
