Temporal Scope of the Hague Rules Confirmed

Volcafe Ltd v Compania Sud Americana de Vapores SA (“CSAV”) [2016] EWCA Civ 1103.

This case involves condensation damage to nine consignments of coffee, which were transported in unventilated containers from Colombia to Germany. The bills of lading provided for the carrier’s liability throughout the transportation from the port of loading to the port of discharge, as well as for the applicability of the Hague Rules to carriage by sea.  Moreover, the carriage was agreed on LCL terms and therefore, the carrier provided and filled in the containers with the coffee bags.

At first instance, Donaldson QC considered inter alia whether the  loading of the coffee bags inland by the carrier into its containers fell outside the scope of the Hague Rules. If the answer were in affirmative, then the carrier would have been entitled to rely on the exemptions included in the bill of lading. The trial judge held that the initial stuffing of the coffee bags into the carrier’s containers and the subsequent loading of the container onto the vessel were to be regarded as part of a single loading process. Alternatively, he ruled that the parties had anyway exercised their freedom to agree on an extended scope of loading for the purposes of art.1(e) (relying on Pyrene v Scindia  [1954] 2 QB 402). In other words, the carrier’s undertaking to stuff its own containers were to be interpreted as an agreement that the initial stuffing of coffee bags into the carrier’s containers formed part of loading of the cargo under the contract of carriage by sea.

The CA (Gloster and King LJJ and Flaux J, sitting in the Court of Appeal) allowed the carrier’s appeal in respect of his defences of inherent vice but confirmed the trial judge’s decision of the temporal scope of the Hague Rules.

Flaux J., who delivered the leading judgement of the CA, relied on the relevant passage in the judgment of Devlin J in Pyrene v Scindia  [1954] 2 QB 402, 417-8, as approved by the House of Lords in Renton v Palmyra [1957] A.C. 149, to conclude that, having exercised their freedom to define the scope of the acts that fall within the scope of “loading”, for which the carrier assumes responsibility, the parties had agreed that the loading services included lining and stuffing the containers. Thus, these operations were governed by the Hague Rules and the carrier was under an obligation to perform those services “properly and carefully” under art. III, r. 2.

Flaux J. also rejected the argument brought forward by the carrier that  such an interpretation would result in a conflict of two international transport conventions, namely the Hague Rules and the CMR, if for example, the stuffing of the containers were followed by road carriage. He found that the CMR does not apply whilst the containers were being dressed and stuffed, since they were stuffed at the container terminal and not on board a vehicle. Furthermore, he held that the better view would seem to be that the CMR ceases to apply as soon as “loading” within the Hague Rules begins: see Clarke: International Carriage of Goods by Road (6th edition 2014) at pp 40-42.

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Associate Professor Dr Theodora Nikaki(†)

Dr Nikaki joined the School of Law in 2005 as a Lecturer and was promoted to Associate Professor in 2013. She was a graduate of Aristotle University of Thessalonica (LLB and LLM in Commercial and Economic Law with distinction). Having worked in private practice for several years, she also obtained an LLM degree in Admiralty and Maritime Law from Tulane Law School (New Orleans, USA) in 2001 with distinction. She then went to work in a maritime law firm in the United States before undertaking her PhD degree in Carriage of Goods by Sea and Transport Law in the UK. Her principal research interest was in the field of carriage of goods by sea, but her interests extended to private international law and multimodal transport. During the 2011-12 academic year, she was awarded a Visiting Fellowship at the Institute of Advanced Legal Studies (University of London) and a visiting researcher position at the Scandinavian Institute of Maritime Law in Oslo. She was an active researcher, publishing in several significant journals such as The Journal of Air Law and Commerce, The Journal of Business Law, the Journal of Maritime Law and Commerce, the Berkeley Journal of International Law and Tulane Maritime Law Journal. She taught courses at both undergraduate and postgraduate levels, such as Carriage of Goods by Sea, Land and Air, Charterparties: Law and Practice, Commercial Law, E-Commerce, International Trade Law, International Litigation and Arbitration, Marine Cargo Claims, Oil and Gas Law and Private International Law. She was also part of the team that delivers the professional courses offered by the Institute of the International Shipping and Trade Law. She was the Deputy Director of the Shipping and Trade LLM Programmes, where she taught Carriage of Goods by Sea, Land and Air (Module Director), Charterparties: Law and Practice, Oil and Gas Law and E-Commerce. †Died 11 April 2017.

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