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Legal Eagle


Package or unit limitation under the Hague-Visby Rules


A recent Court of Appeal ruling on the Maersk Tangier [2018] EWCA Civ 778 made some landmark rulings clarifying aspects of the Hague-Visby Rules


In the Maersk Tangier [2018] EWCA Civ 778, the Court of Appeal has issued a leading judgment (upholding the decision of the Commercial Court) determining for the first time under English law what constitutes a ‘unit’ for the purposes of limitation under Article IV Rule 5 of the Hague Rules and the Hague-Visby Rules. The decision also provides important guidance


on whether the Hague-Visby Rules can be compulsorily applicable even though the carrier issued a sea waybill rather than a bill of lading. Clyde & Co represented the successful respondents in the case.


Facts The appellant agreed to carry the respondent’s cargo of deep frozen tuna, comprising 1,226 unpackaged pieces of tuna loin weighing between about 20 kg and 75 kg each, stuffed into three of the appellant’s ‘super freezer’ containers. The tuna pieces were not wrapped or individually packed before being loaded onto the containers. It was common ground that the three


containers were received by the appellant pursuant to a contract, or contracts, of carriage containing an implied term that the shippers were entitled to demand that a bill, or bills, of lading be issued by the appellant. As a result of errors in transhipment, delivery


of the three containers was delayed and although it was initially envisaged that a bill of lading would be issued, instead, in order to avoid any further delay, the parties subsequently agreed to the issue of three sea waybills, one for each of the three containers and each of which identified the respondent as consignee. The cargo was described in the same way in each sea waybill, for example, as follows: 1 Container Said to Contain 206 PCS FROZEN BLUEFIN TUNA LOINS – 18740.000


KGS 16


Upon delivery, the cargo in all three subject


containers was found to have suffered damage, allegedly due to reefer machinery failure.


Issues A hearing took place before the Commercial Court in 2017 to determine agreed preliminary issues, and from that judgment three issues came to be considered by the Court of Appeal as follows: • Issue 1: Is the carrier’s liability limited pursuant to the Hague Rules or the Hague-Visby Rules?


• Issue 2: If the Hague Rules apply, are the relevant packages or units for the purposes of Article IV, Rule 5, the containers or each individual piece of tuna?


• Issue 3: If the Hague-Visby Rules apply, are the containers deemed to be the relevant package or unit, or are the individual pieces of tuna packages or units “enumerated” in the relevant transport document “as packed” in each container, for the purposes of Article IV, Rule 5(c)?


Issue 1: Is the carrier’s liability limited pursuant to the Hague Rules or the Hague- Visby Rules? The appellant argued that because the sea waybills had been issued instead of bills of lading, the Hague Rules applied contractually. The respondent argued that the Hague-Visby Rules applied by force of law pursuant to the Carriage of Goods by Sea Act 1971 (the Act) because shipment was from Spain, a contracting state and, although no bill of lading was ever issued, the contract of carriage was nevertheless ‘covered by a bill of lading’ for the purposes of the Act and the Hague-Visby Rules Article 1(b). This was because when the contract was


made the parties contemplated that a bill of lading would be issued and the respondent was entitled to demand the issue of a bill of lading


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The court considered whether, if the Hague Rules apply, were the relevant packages or units for the purposes of Article IV, Rule 5, the containers or each individual piece of tuna?


(see Pyrene v Scindia [1954] 2 QB 402 as approved by the Court of Appeal in The Happy Ranger [2002] 2 Lloyd’s rep 357, both cases in which cargo was damaged during the loading operation and no bill of lading was issued). At first instance the judge followed Pyrene and


found that so long as the terms of the contract require a bill of lading to be issued or the respondent is entitled to demand one, it is immaterial whether a bill of lading is ever issued, or even whether a waybill is issued instead, and decided that the Hague-Visby Rules applied by force of law. Given its conclusion that the Hague-Visby


Rules were compulsorily applicable, the Court of Appeal felt it appropriate to turn next to Issue 3.


Issue 3: If the Hague-Visby Rules apply, are the containers deemed to be the relevant package or unit, or are the individual pieces of tuna “packages or units” enumerated in the relevant transport document as packed in each container, in each case for the purposes of Article IV, Rule 5(c)? Until the decision of the Commercial Court, there had been no English case law authority on the meaning of Article IV, Rule 5(c) and the only guidance has been from the Full Federal Court of


June 2018


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