Background
Pedregal Maritime SA owned the Taikoo Brilliance and issued four bills of lading to Batavia Eximp & Contracting (S) Pte Ltd for a cargo of New Zealand pine logs carried to Kandla, India. After the cargo was discharged in September 2019 without production of the bills, Batavia alleged misdelivery.
Batavia began Singapore proceedings to arrest a sister ship within one year of discharge, but those proceedings were stayed in favor of the bills’ London arbitration clause. Batavia did not commence arbitration until December 2020, more than one year after delivery. The arbitrator held that the Hague-Visby Rules’ one-year time bar applied, but only to cargo carried below deck. The Commercial Court dismissed both parties’ appeals on questions of law, and each appealed to the Court of Appeal.
The Court’s Holding
The Court of Appeal dismissed Batavia’s appeal. It held that “suit” under Article III rule 6 means substantive proceedings capable of establishing the carrier’s liability. Proceedings brought solely to obtain security, in which the merits cannot be determined, do not prevent the carrier’s liability from being extinguished after one year. Batavia’s Singapore arrest proceedings therefore did not preserve its claim.
The Court allowed Pedregal’s appeal concerning deck cargo. Where only part of a consignment consists of items of differing value and is carried on deck, Article I(c) requires the bill of lading to identify that cargo specifically, such as by parcel or serial number. Merely stating the number of pieces carried on deck was insufficient because the logs varied in weight and value and the bills did not identify which pieces were on deck. All of the cargo consequently remained “goods” governed by the Hague-Visby Rules, and Batavia’s entire claim was time-barred.
Key Takeaways
- An action seeking security alone is not “suit” under Article III rule 6 because it cannot determine the carrier’s substantive liability.
- For a non-homogeneous consignment, a bill must specifically identify the portion carried on deck to engage Article I(c)’s exclusion.
- The Court left open what degree of identification is required when part of a wholly homogeneous cargo is carried on deck.
Why It Matters
Cargo interests cannot preserve Hague-Visby claims merely by arresting a vessel or obtaining security within the one-year period; they must timely commence substantive proceedings in a competent forum, including the contractually agreed arbitral forum where applicable.
Carriers seeking to exclude part of a mixed or differently valued consignment from the Rules as deck cargo must describe that portion with sufficient specificity. General statements about quantities carried on deck may leave the entire consignment subject to the Hague-Visby regime.