Yemgas FZCO and Others v Superior Pescadores S.A. Panama
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Males,Mr Justice Males |
| Judgment Date | 02 April 2014 |
| Neutral Citation | [2014] EWHC 971 (Comm) |
| Court | Queen's Bench Division (Commercial Court) |
| Docket Number | Case No: 2012 Folio 102 |
| Date | 02 April 2014 |
[2014] EWHC 971 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon. Mr Justice Males
Case No: 2012 Folio 102
"SUPERIOR PESCADORES"
Mr Robert Thomas QC (instructed by Clyde & Co LLP) for the Claimants
Mr David Goldstone QC (instructed by Davies Johnson & Co) for the Defendant
Hearing date: 21 st March 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
INTRODUCTION
This is a fairly typical cargo claim which has given rise to three issues concerning the effect of a clause paramount in a bill of lading and the package limitation provisions of the Hague and Hague-Visby Rules. The first issue is as to the meaning in a clause paramount of the phrase "the Hague Rules … as enacted in the country of shipment". What is the position if the country of shipment has enacted the Hague-Visby Rules? The second issue concerns Article IV Rule 5(g) of the Hague-Visby Rules which permits the parties to the bill of lading contract to agree a higher limitation figure than that provided for by paragraph (a) of that Rule. In short, what is the position when the parties' contract provides for the application of the Hague Rules which will sometimes but not always result in a higher package limitation amount than the compulsorily applicable Hague-Visby Rules? The third issue is whether, under Article IV Rule 5 and Article IX of the original Hague Rules, the time for converting the gold value into money is the date of judgment or some other earlier time.
These issues arise on an application for summary judgment by the claimant cargo interests against the owners of the MV "SUPERIOR PESCADORES". However, the parties agreed that they are all issues of law which do not depend on any disputed issues of fact and can therefore be finally decided one way or the other.
THE FACTS
The claim arises out of damage to machinery and equipment intended for use in the construction of a liquid natural gas facility in Yemen. This cargo was loaded on the vessel at the port of Antwerp, Belgium in early January 2008.
On 11 January 2008, the owners issued six bills of lading numbered ABA01 to ABA06 acknowledging shipment of the cargo on board the vessel in apparent good order and condition for carriage from Antwerp to Balhaf in Yemen. Each of the bills was for a number of packages and contained on its reverse side a "Paramount Clause" in the following familiar terms:
" 2. Paramount Clause
The Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels the 25 th August 1924 as enacted in the country of shipment shall apply to this contract. When no such enactment is in force in the country of shipment, the corresponding legislation of the country of destination shall apply, but in respect of shipments to which no such enactments are compulsorily applicable, the terms of the said Convention shall apply."
Although the bills of lading were not issued on the standard Congenbill form, this wording is (with one immaterial change) identical to the wording of the clause paramount which that widely used bill of lading form contains.
The vessel sailed from Antwerp on 12 January 2008. On about 17 January 2008, while the vessel was crossing the Bay of Biscay, the cargo in hold no.1 shifted, causing significant damage to part of the cargo. The claimants' total losses resulting from this incident (ignoring package limitation) are said to be in excess of US $3.6 million.
Agreement was subsequently reached that the claim would be subject to English law and jurisdiction. That law includes the Carriage of Goods by Sea Act 1971 which renders the Hague-Visby Rules applicable as a matter of statute law when the carriage is from a port in a contracting state. Belgium is such a state.
Proceedings were started in January 2012, well outside the one year time limit, although as no point was taken on that it is safe to infer that the time for commencing proceedings had been extended by agreement. The Particulars of Claim served in April 2012 relied on the clause paramount as a contractual incorporation of the Hague (not Hague-Visby) Rules and pleaded that to the extent that the Hague Rules provide for higher limits than the Hague-Visby Rules, the claimants were entitled to those higher sums.
Examination of the claim reveals that in the case of some of the bills of lading the Hague Rules limit is always higher than the Hague-Visby limit, and that the claimants have claimed this higher limit. In the case of bill of lading no. 4, however, application of the Hague Rules yields a higher limitation figure for four of the six packages, while for the remaining two packages the Hague-Visby limit is higher. In the case of each package the claimants have claimed whichever limitation figure is the higher. I was told by counsel that the effect of the different limitation formulae for which the two regimes provide is that (at current values) the Hague Rules limit is higher for packages weighing up to about 10 tonnes, while for packages weighing more than this the Hague-Visby limit is higher.
The shipowners' Defence served on 18 May 2012 admitted liability to pay the amount of the Hague-Visby package limit, equivalent to just over US $400,000, and contended without further explanation that "it is not open to the Claimants to pick and choose between the Hague Visby package limit and the Hague package limit, depending on which gives them more". The undisputed Hague-Visby amount (plus interest) has since been paid.
The remaining issue, therefore, is how limitation should be calculated and in particular whether the claimants are entitled to recover the Hague Rules limit where this would give them a higher recovery than the Hague-Visby limit. If they are, I understand that the claimants will be entitled to recover additional damages up to a further sum of about US$ 200,000.
WHICH RULES ARE INCORPORATED BY VIRTUE OF THE CLAUSE PARAMOUNT?
The premise for the claimants' argument that they are entitled to rely on the Hague Rules limit where this is higher is that it is the Hague Rules and not the Hague-Visby Rules which are incorporated into the bill of lading by virtue of the clause paramount set out at [4] above. The claimants recognise that in a case such as the present, where the carriage is from a port in a contracting state, the Hague-Visby Rules apply compulsorily by reason of section 1(2) of the 1971 Act and Article X of the Hague-Visby Rules themselves, but they rely on the permission given by those Rules to agree contractually on a higher package limitation figure than that for which the Rules provide. They say that the parties have so agreed (to the extent that it produces a higher limit) by incorporating the limit provided for by the Hague Rules.
The first question is therefore whether the parties have indeed incorporated the Hague Rules and not the Hague-Visby Rules by virtue of the clause paramount. That depends on what is meant, in this bill of lading, by the phrase "the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels the 25 th August 1924 as enacted in the country of shipment …" It is common ground that if this does not refer (or is not capable of referring) to the Hague-Visby Rules which have been enacted in Belgium, the Hague and not the Hague-Visby Rules are incorporated by virtue of the second sentence of the clause.
The parties' submissions
Mr Robert Thomas QC for the claimant cargo interests submitted, in summary, that this question is determined in his favour by the judgment of Tomlinson J in The Happy Ranger [2001] 2 Lloyd's Rep 530 and is also supported by other authority; and in any event that the clause is clear in incorporating the original Hague Rules and not the Hague Rules "as amended", as the words "the Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading, dated Brussels the 25 th August 1924" are only capable of referring to the original Hague Rules.
Mr David Goldstone QC for the defendant shipowners sought to distinguish The Happy Ranger and submitted, again in outline, that the Hague-Visby Rules are capable of falling within the expression "the Hague Rules … as enacted in the country of shipment" and should be construed as doing so if there is no contrary indication in the clause (such as a distinction drawn elsewhere in the clause between the Hague and Hague-Visby Rules).
The authorities
In considering the authorities it is necessary to distinguish between cases (usually charterparty cases) which have addressed the question of what is meant by general expressions such as "clause paramount" without spelling out what the terms of such a clause paramount are intended to be and other cases (usually bill of lading cases) which have addressed the terms of particular clauses. It is also necessary to bear in mind that in a charterparty case there is freedom of contract, so that the parties are entitled to agree whatever they wish. That will not necessarily be so in a bill of lading case, where (under English law) the application of the Hague-Visby Rules is compulsory in the cases falling within section 1 of the 1971 Act and Article X of the Rules, although not in other cases. Taking them chronologically, the authorities...
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