VINNLUSTODIN HF AND ANOTHER V SEA TANK SHIPPING AS (THE "AQASIA")

[2018] EWCA Civ 276, Court of Appeal, Civil Division, Lady Justice Gloster, Lord Justice David Richards, Lord Justice Flaux, 22 February 2018

Carriage of goods by sea - Limitation of liability - Package limitation - Meaning of "unit" - Whether package limitation rules in Hague Rules applicable to bulk cargoes - Hague Rules, article IV rule 5

This was the appeal of a decision on a preliminary issue in proceedings where the owner of a damaged cargo of fishoil sought damages from the carrier. The fishoil was carried on board the tanker Aqasia pursuant to a charterparty dated 23 August 2013. The charterparty was on the London Form, provided for English law and arbitration and incorporated the Hague Rules. The cargo was described in the charterparty as "2,000 tons cargo of fishoil in bulk". The preliminary issue concerned the carrier's case that it was entitled to package limitation under the Hague Rules: article IV rule 5 could be applied to bulk or liquid cargo by reading the word "unit" as a reference to the unit used by the parties to denominate or quantify the cargo in the contract of carriage. The cargo interests for their part argued that the word "unit" could only refer to a physical item of cargo, or to a combination of physical items bundled together for shipment, so that article IV rule 5 did not apply to a liquid or other bulk cargo: when cargo is shipped in bulk, there are no relevant "packages" or "units". The judge decided in cargo owners' favour and the carrier appealed.