Key takeaways
Clause Paramount overrides conflicting terms
Hague Rules’ one-year limit applies despite other wording.
Clear drafting prevents costly disputes
Consistency in contracts avoids ambiguity and litigation risk.
Court reinforces strict time-bar approach
Late claims fail even with alternative provisions included.
Clause paramount one year time limit prevails over inconsistent provision
Tanga Pharmaceuticals Plastics Ltd & Ors -v- Emirates Shipping Line FZE (Alion) [2025] EWHC 368 (Comm)
The Court has found that cargo interests who brought their claims within the one-year time limit provided for in the Hague Rules were not out of time, notwithstanding that the Rules were contractually incorporated into the bills of lading and were not compulsorily applicable and notwithstanding other inconsistent provisions in the bills of lading.
The background facts
The claimant cargo interests shipped 548 containers on board the vessel under various bills of lading issued by the defendant carrier for carriage from India, the UAE, and Saudi Arabia to Mombasa, Kenya. The bills of lading were all expressly governed by English law and subject to English jurisdiction.
During the voyage, the vessel suffered a motor engine failure. This gave rise to claims by cargo interests against the carrier for a salvage indemnity and particular average. Cargo interests duly commenced proceedings in the English Court.
However, a dispute arose as to whether these claims were commenced in or out of time. This depended on what time limits applied to the relevant claims.
The Hague Rules
It was common ground between the parties that the Hague Rules were incorporated contractually by virtue of clause 2, the Clause Paramount, on the reverse of the bills of lading.
By way of reminder, Article III Rule 6 of the Hague Rules provides for a one-year time-limit to bring a claim from the time when the goods have been delivered or should have been delivered, failing which the carrier is discharged from liability for any loss or damage.
Article III Rule 8 of the Hague Rules provides that any provision in the bill of lading that relieves the carrier from liability other than in accordance with Article III or that lessens the carrier’s liability other than as provided in the Rules will be null and void and of no effect.
If Article III Rules 6 and 8 applied, the cargo interests’ claims were brought within time.
Clause 18
However, the carrier argued that, in this case, the following provisions in clause 18 of the bills of lading prevailed:
The 20-day Provision
"Any claim against the Carrier for any adjustment, refund of or with respect to freight, charges or expenses or any claim other than for loss or damage to Goods must be submitted fully documented to the Carrier or its agent in writing within 20 days from the day when the Goods were or should have been delivered, failing which such claim will be time-barred."
The Service Provision
"Suit shall not be considered to have been brought within time specified unless process shall have been actually served and/or jurisdiction obtained over the Vessel or Carrier within such time."
The carrier sought summary judgment, arguing that cargo interests’ claims were time-barred because they had not submitted a claim to the carrier within 20 days nor served the claim form on the carrier within one year.
The Commercial Court decision
Clause paramount overrode clause 18
The Court found firstly that the Clause Paramount in clause 2 overrode the provisions in clause 18 and the claims were not time-barred.
On the authorities, it was established that where the Hague Rules apply only as a matter of contract (as here) and are not compulsorily applicable, the parties are free to modify them. However, clear words must be used before the English Court would accept that a party had foregone valuable rights. In the Court’s view, the parties had not demonstrated any such intention in this case.
In particular, the Court stated that:
Incorporating the Hague Rules into the contract of carriage evidenced by the bill of lading by means of a clause paramount generally meant that the parties intended the clause paramount to override any express exemption or condition inconsistent with it.
The Clause Paramount in clause 2 did not incorporate the entire Hague Rules. Therefore, the fact that Article III Rules 6 and 8 were incorporated and not omitted indicated that they were intended to apply to the carriage.
The Clause Paramount did not incorporate Article III Rule 8 in general terms. It identified a specific circumstance where the Rule would not apply, namely in relation to the limitation sum for the purposes of Article IV Rule 5. The implication was, therefore, that Rule 8 should apply in other, non-specified, circumstances.
Clause 9 of the bills of lading expressly stated that the carrier’s liability should be determined in accordance with the Clause Paramount.
There was nothing in the language of clause 18 to indicate that it was intended to prevail over clause 2.
Service Provision null and void under Hague Rules
The Court also dismissed the argument that the Service Provision did not fall foul of Article III Rule 8 because Rule 6 was neutral on the bringing of suit and different jurisdictions took differing approaches on when suit was considered to have been brought.
Irrespective of the position elsewhere, the bills of lading provided for English law and jurisdiction. Pursuant to English law and procedure, suit was brought when the claim form was issued. On that basis, the Service Provision had the potential to relieve the carrier from liability.
Application of 20-day Provision
There was a dispute as to whether this Provision applied to cargo interests’ salvage indemnity claim, depending on whether that was considered to be a claim for “loss or damage to Goods”.
The Court did not strictly need to decide this issue because even if the Provision applied, it would be rendered null and void by virtue of Rules 6 and 8.
However, noting that there was conflicting authority on the point, the Court expressed the view that in this case, there had been “damage to Goods” within the meaning of clause 18. In doing so, it agreed with the decision in The Thorco Lineage [2023] EWHC 26 (Comm) that “goods lost or damaged” meant “goods lost or damaged physically or economically.”
Comment
This case serves as a reminder that determining the applicable contractual time limit, in the event that no international convention is compulsorily applicable, is not always straightforward. If the contractual provisions of the bill of lading are in conflict, this will require a careful analysis of the language used to ascertain which provision should prevail.
The case also highlights the different approaches to protecting time bars effectively across different jurisdictions. The Court hesitated to allow contractual terms to interfere with this.
