In February 2025, the English High Court in Tanga Pharmaceuticals Plastics Limited and others (the claimants) versus Emirates Shipping Line FZE (the defendant) rejected the defendant’s request for summary judgment and in doing so upheld the time-bar provisions contained in the Hague Rules incorporated into the bills of lading. The claimant’s claims to recover its liability to salvors and for particular average were held to be covered as claims for “loss or damage to Goods” and the time-bar in the Hague Rules applied.

The dispute pertained to cargo damage resulting from a vessel’s engine malfunction and the legal consequences of the bills of lading and the relevant Hague Rules concerning claims and time restrictions.

Facts

The claimants, who owned or had interests in 548 containers and their contents, shipped the cargo on the MV “Alion” to Mombasa in September 2021. The defendant acted as the carrier under the relevant bills of lading. The vessel, which the defendant chartered from Alion Maritime Limited, experienced a main engine failure on 15 September 2021, off Salalah coast, in the Arabian Sea. Tsaviliris Salvage International provided salvage services under a Lloyd’s Standard Form of Salvage Agreement, and general average was declared around 5 October 2021. The cargo was unloaded at Mombasa on 6 December 2021 and later released to receivers after salvage and general average security was provided.

On 3 November 2022, the claimants informed the defendant of their planned claims, seeking indemnity for their liability to the salvors and for particular average. The defendant agreed to an extension until 20 March 2023, which was later extended to 20 June 2023. The claimants filed a claim form on 16 June 2023, making claims under the contracts of carriage as evidenced in the bills of lading. The court extended the claim form’s validity for service until 16 December 2024, and service was completed on 5 July 2024.

Key Points

Applicability of the Hague Rules: The court determined that the Hague Rules applied contractually according to clause 2(1) of the bills of lading. Clauses 2 and 9 of the bills of lading were designed to extend the Hague Rules to both port-to-port carriage and the port-to-port segment of intermodal carriage.

The court reviewed the 20-day provision and the service provision in clause 18 of the bills of lading. The 20-day provision required that claims for charges or expenses be submitted within 20 days.  The service provision required that a suit would only be considered initiated if the process was served and/or jurisdiction was obtained within the specified period.

The court concluded that clause 18 of the bills of lading did not supersede the Hague Rules, especially Article III Rules 6 and 8. The Clause Paramount in clause 2 of the bills of lading, which incorporated the Hague Rules, was meant to take precedence over any conflicting provisions in the bills of lading.

The court found that the claimants’ claims, including those for indemnity for liability to salvors and particular average, were covered under the term “loss or damage to Goods” as defined by the Hague Rules. This interpretation was supported by the reasoning in Trafigura Pte Ltd v TKK Shipping Pte Ltd (The “Thorco Lineage”). In the Thorco Linage case, the court held that the phrase “goods lost or damaged” in Article IV.5 of the Hague-Visby Rules encompassed goods that have suffered economic damage. This interpretation supports the argument that the claims in the current case, which involves economic damage, should be considered as “damage to Goods”.

The court held that the service provision was conflicted with Article III Rule 6 and Rule 8 of the Hague Rules. According to English law and procedure, a suit is initiated when the claim form is issued, and the service provision could potentially exempt the carrier from liability, which is against the Hague Rules.

Conclusion

The court dismissed the defendant’s application for summary judgment, confirming that the claimants’ claims were not time-barred under the Hague Rules as incorporated into the bills of lading. The judgment emphasises the significance of the Hague Rules in offering a consistent framework for claims related to the carriage of goods by sea and highlights the need for clear contractual provisions when parties intend to modify these rules.