Ruling gives clarity on time bar element of Hague-Visby
Summary
Pertaining to the Hague-Visby Rules, which are a mandatory framework of rights and obligations applicable to the carriage of goods by sea, the decision clarifies that obligations and immunities are to continue after discharge and until actual delivery of a cargo takes place.
Art III r 6 of the Rules states that any claim in respect of the goods carried will be time barred unless proceedings have been commenced within one year of their delivery, or the date when they should have been delivered. This is one of the first points to check when notified of a claim, as it will provide the carrier with an absolute defence to the claim.
The question has not previously been decided by the English courts and has divided leading academic commentators as well as judges in other common law jurisdictions.
Handing down a judgment in FIMBank plc -v- KCH Shipping Co Ltd, an appeal under section 69 of the Arbitration Act 1996, judge Sir William Blair held that the time bar in Article III rule 6 of the Hague-Visby Rules can apply to claims in relation to misdelivery after discharge.
The appeal relates to a claim brought by FIMBank as the holder of bills of lading, for the alleged misdelivery of cargo by the contractual carrier, KCH Shipping. The bills were concluded on the Congenbill form, and were subject to the Hague-Visby Rules, including the time bar in Article III r 6 for one year after delivery which applies to claims against carriers.
In an Award on preliminary issues, the arbitral tribunal determined that FIMBank’s claim was time-barred irrespective of whether delivery post-dated discharge on the facts (which remained a matter in dispute). This was because:
(i) the Hague-Visby Rules time bar can apply to claims relating to misdelivery occurring after discharge; and
(ii) Clause 2(c) of the Congenbill form does not disapply the Rules in respect of the period after discharge.
The court upheld a previous arbitral tribunal’s decision on whether the claim was time-barred and accordingly dismissed the appeal. It concluded that Article III r 6 of the Hague-Visby Rules does apply to claims for misdelivery of cargo after discharge and noted that this conclusion avoids the need for distinctions as to the point at which discharge ends.
The court held that the tribunal’s decision was justified by its finding that the bills of lading contained an implied term providing that the Hague-Visby Rules obligations and immunities are to continue after actual discharge and until delivery takes place, in line with the reasoning of the Court of Appeal in The MSC Amsterdam [2007] EWCA Civ 794.
Richard Allingham, Hill Dickinson legal director, comments: “This is a welcome decision and one which fills the gap in application of Article III rule 6 of the Hague-Visby Rules when discharge and delivery are not concurrent. Carriers will now have the comfort that the one-year time bar applies not only to claims arising during the sea carriage, but also to the extended period following discharge up to and including the time of delivery.