Hague-Visby package limitation and containerised goods.   What is meant by “the number of packages or units enumerated in the bill of lading as packed” in article IV (5) (c)?


In  The Maersk Tangier (AP Moller-Maersk A/S v Kyokuyo Ltd) [2018] EWCA Civ 778 the Court of Appeal  has dismissed the appeal against  the decision of  Andrew Baker J, [2017] EWHC 654 (Comm), reported in this blog on 31 March 2017.

A cargo of tuna loins was loaded into three containers which were carried  from Spain to Japan. The contract of carriage initially provided for the issue of straight bills of lading, consigned to the claimants, but the carrier and shipper subsequently agreed to issue seawaybills which were handed over to the consignee.  The goods in the three containers were frozen tuna, some of which were carried in packages, some in individual units.

Two principal issues arose.

First, was liability limited pursuant to Article IV rule 5 of the Hague Rules or pursuant to Article IV rule 5 of the Hague-Visby Rules (whether applicable compulsorily or contractually)?  The carrier argued that as a seawaybill had been issued the Hague-Visby Rules did not apply and the Hague Rules applied contractually under the terms of the seawaybill. The Court of Appeal rejected this contention and held that the Judge had correctly held that the Hague-Visby Rules applied with the force of law. The carriage was from Spain, a contracting state, and fell within Article X(b) and   the contract of carriage at its inception provided for the issue of a bill of lading on demand, and was therefore “covered by a bill of lading” within the meaning of Article I(b) of the Hague-Visby Rules. As the contract provided by implication for the issue of such a bill of lading on demand, the requirements of section 1(4) of the 1971 Act were clearly satisfied and the Hague-Visby Rules had the force of law.

A purposive construction had to be given to the references to a “bill of lading” in Article X and Article IV(5)(c), so as to give effect to the clear intention that the Hague-Visby Rules apply compulsorily to the contract of carriage. The references in Article X to “bill of lading” should be read as “contract of carriage which is covered by a bill of lading or similar document of title”, giving effect to the case law on the meaning of “covered by a bill of lading” in Article I(b).  The reference to enumeration in the bill of lading in Article IV rule 5(c) must be read as encompassing any other document which contains the enumeration which would have been in the bill of lading if such a bill had been issued, here the sea waybills.

Second, if liability was limited pursuant to Article IV rule 5 of the Hague-Visby Rules, were the containers deemed to be the relevant package or unit for the purposes of Article IV rule 5(c), or are the individual pieces of tuna “packages or units” enumerated in the relevant document as packed in each container for the purposes of Article IV rule 5(c)? The carrier argued that the Judge had been wrong not to follow the approach of the majority of the Federal Court of  Australia in The El Greco [2004] 2 Lloyd’s Rep 537 and conclude that the words “as packed” in Article IV rule 5(c) meant that the enumeration not only had to state the number of packages or units but how they had been packed in the container, whether as separate items or consolidated into packages. The language used in enumeration must specify or be consistent with the possibility that the cargo was packed so as to be packages or units. Simply giving the number of frozen tuna loins did not tell one how they were packed for shipment.

The Court of Appeal rejected this contention.  The words “enumeration…as packed” did  not justify the additional requirement  that the bill of lading (or here the waybill) had to go on to specify how the packages and units have been packed in the container.   “Enumeration” did not as a matter of language entail some further description in the bill of lading as to how the packages or units are actually packed in the container. The words “as packed” were simply descriptive, stating no more than that the enumerated number of items have been packed in the container.

There was a third question, which arose only if the answer to the first question was that the contract of carriage was subject to the Hague Rules, rather than the Hague-Visby Rules. This was whether it was the containers or the individual pieces of tuna that were the relevant packages or units under Article IV rule 5.  The carrier contended that a “unit” was an item which could be shipped “as is” if not containerised and that these frozen loins could not be, and therefore the container was the package or unit. The Court of Appeal rejected this contention. Nothing  in the wording of Article IV rule 5 of the Hague Rules justified the gloss for which the carrier contended and  its interpretation was inconsistent with the analysis of ‘unit’ applied by the Court of  Appeal in The Aqasia  [2018] EWCA Civ 276 in which it had said that a ‘unit’ could be regarded as synonymous with a ‘piece’. This would clearly encompass tuna loins stuffed in the containers without further packaging.

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Professor Simon Baughen

Professor Simon Baughen was appointed as Professor of Shipping Law in September 2013 (previously Reader at the University of Bristol Law School). Simon Baughen studied law at Oxford and practised in maritime law for several years before joining academia. His research interests lie mainly in the field of shipping law, but also include the law of trusts and the environmental law implications of the activities of multinational corporations in the developing world. Simon's book on Shipping Law, has run to seven editions (soon to be eight) and is already well-known to academics and students alike as by far the most learned and approachable work on the subject. Furthermore, he is now the author of the very well-established practitioner's work Summerskill on Laytime. He has an extensive list of publications to his name, including International Trade and the Protection of the Environment, and Human Rights and Corporate Wrongs - Closing the Governance Gap. He has also written and taught extensively on commercial law, trusts and environmental law. Simon is a member of the Institute of International Shipping and Trade Law, a University Research Centre within the School of Law, and he currently teaches at Swansea on the LLM in:Carriage of Goods by Sea, Land and Air; Charterparties Law and Practice; International Corporate Governance.

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