Hague Rules – package limitation not applying to bulk cargoes.
Fish oil was carried pursuant to a charterparty on the “London Form”, an old tanker voyage form now replaced in common usage by Intertankvoy 76.
The vessel loaded 2,056,926 kg of fish oil in bulk at Faskrudsfjordur and Vestmannaeyjar.
The vessel sailed to Lovund in Norway and loaded a further cargo of fish oil.
On arrival at the discharge port 547,309 kg/mt of the cargo was found to be damaged.
Claimants claimed $367,836 together with interest and costs. Ship owners sought limit their liability to £54 730 i.e. £100 per metric ton of cargo damaged pursuant to Article IV r.5 of the Hague Rules.
Article IV r.5 provides:
“… neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with goods in an amount exceeding £100 per package or unit or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading”.
The shipowners sought to limit their liability to £100 per metric ton.
The counter argument was that it was not possible to equate "unit" with an undefined standard of measurement.