The claimant was the receiver of three container loads of frozen tuna shipped by the defendant. The three containers held frozen tuna loins stuffed into the containers as individual items of cargo and bags of frozen tuna parts stuffed into the containers as individual bags, the containers carrying, respectively, 206 frozen loins and 460 bags, 520 frozen loins, and 500 frozen loins. The contract of carriage entitled the shippers to demand that a bill of lading be issued by the carrier, and draft bills of lading were drawn up. However, in order to avoid a delay in delivery, the parties agreed to issue waybills instead of bills of lading. The waybills stated that the number of pieces in each container was 206, 520 and 500 respectively and did not mention the bags of frozen tuna parts in the first container. All three containers were discharged at port after carriage by sea, with the cargo from the second and third containers being transported on by road. The claimant alleged that the cargo suffered damage during carriage. A trial of preliminary issues was ordered to determine issues regarding limitation of liability, namely whether the carrier’s liability was limited under article IV, rule 5 of the Hague Rules or article IV, rule 5 of the Hague-Visby Rules, whether the limit of liability in the applicable rules per “package or unit” referred to the containers or the individual tuna loins, and whether the limit of liability was to be calculated by reference to the cargo in all three containers separately or in aggregate.
On the preliminary issues—
Held, (1) that the requirements in: (a) section 1(4) of the Carriage of Goods by Sea Act 1971 for the contract to provide expressly or by implication for the issue of a bill of lading in order that the Hague-Visby Rules scheduled to that Act would apply; and (b) article I(b) of the Hague-Visby Rules for there to be a contract of carriage covered by a bill of lading in order that those rules would apply, were satisfied where the terms of a contract of carriage required a bill of lading to be issued, either on demand or come what may, but no bill of lading was in fact issued. It was immaterial whether the right to a bill of lading was insisted upon. Provided that the terms of the contract were not varied to remove the right to a bill of lading, it was also immaterial whether waybills were, by agreement, issued instead of bills of lading. Accordingly, the carrier’s liability would be limited in accordance with article IV, rule 5 of the Hague-Visby Rules, except in relation to any damage sustained by the cargo from the second or third containers during the transportation by road, in which case liability would be limited by the carrier’s own standard terms and conditions of carriage (paras 55, 63, 120).
(2) That “package or unit" had the same meaning under article IV, rule 5 of the Hague Rules and article IV, rule 5 of the Hague-Visby Rules. Under both sets of rules, if cargo as in fact transported was packaged, the limit of liability for that cargo applied per package, even if what had been packaged would have been suitable for transportation without that packaging. If cargo as in fact transported was made up of identifiably separate items of transportable cargo stuffed in a container, those items were each “units”, regardless of whether those items could not have been carried individually if not containerised. Article IV, rule 5(c) of the Hague-Visby Rules, which deemed the number of packages or units in a container to be the number enumerated in the bill of lading as packed or else to be the container, required only the number of units to be accurate as to the number of separate units and did not require clarity as to whether the units were as packed, packed as separate unpackaged articles or packed in packages. Accordingly, even though the frozen tuna loins could not have been transported if not containerised, each of the frozen tuna loins was a “unit”. Each of the bags was a “package”. The waybills setting out the number of pieces in each container was sufficient for article IV, rule 5(c) of the Hague-Visby Rules to be engaged and deem each individual frozen tuna loin as a “unit”. The limit of liability was therefore 666.67 units of account per each frozen tuna loin. The waybills not mentioning the bags of frozen tuna parts, article IV, rule 5(a) and (c) operated to set the limit of liability in respect of those packages as the greater of 666.67 units of account or (2 x W) units of account, where W was the gross weight in kilograms of the bagged tuna damaged, on the basis that the container was deemed to be the only relevant package or unit even though there were in fact 460 “packages” of frozen tuna parts (paras 86, 87, 88, 91, 98, 101, 120).
(3) Under article IV, rule 5 of both the Hague Rules and the Hague-Visby Rules, liability for cargo shipped as “packages or units” was subject to a limit for each “package or unit”, there being a separate limit for each. There could be no aggregation of the claims in relation to the individual frozen tuna loins and the shippers therefore remained liable for 666.67 units of account for each frozen loin, considered separately (paras 110-111, 114, 119, 120).
Robert Thomas QC and Benjamin Coffer (instructed by Clyde & Co LLP) for the claimant.
Sara Masters QC and Daniel Bovensiepen (instructed by Bentley, Stokes & Lowless) for the defendant.