The claimant bank was the pledgee of bills of lading issued in respect of various cargoes of coal that were shipped from Indonesian to Indian ports. The coal had been discharged against letters of indemnity into stockpiles, and it was not clear what had happened to it. The claimant commenced an arbitration against the carrier. The carrier argued, successfully, that any claim was time-barred by application of the Hague-Visby Rules, Art. III(6). the arbitration having commenced more than one year after delivery.

The claimant successfully applied for permission to appeal on a point of law of general public importance. It argued before Sir William Blair that the Hague-Visby Rules applied only to the carriage operation itself. The time bar could therefore not apply to events that occurred outside the carrier’s “period of responsibility”, and therefore not to misdelivery made after discharge of the goods from the vessel, leading to the applicability of the “normal” time bar of six years. Even if the time bar applied, the parties were free to extend it by contract, and the bank argued that this had been achieved by cl.2(c) of the bills of lading, which sought to exclude the carrier’s liability prior to loading and after discharge altogether. This, argued the bank, necessarily meant that the time bar should also be disapplied in respect of any such claims.

The carrier prevailed before the tribunal, Sir William Blair and the Court of Appeal, the latter holding that, while the time bar applied only to events occurring during the carriage operation as far as the Hague Rules were concerned, the drafters of the Hague-Visby Rules (which applied to these bills) had clearly been concerned to extend the applicability of the time bar by redrafting Art.III(6) to read “from all liability whatsoever in respect of the goods”. The argument based on cl.2(c) of the bills was rejected on the grounds that this was meant to relieve the carrier of liability, and that it would be counter-intuitive to conclude that it had the effect of increasing its liability by depriving it of the benefit of the time bar that would otherwise apply.

The bank was granted permission to appeal by the Supreme Court.

Decision: Appeal dismissed.