Hague Rules – containers are not “packages” for the purposes of limitation – parties’ agreement to treat containers as packages hit by Art.III rule 8.
The vessel sank off the coast of Portugal with loss of life and total loss of cargo.
Clause 9 (B) of the Bills of Lading provided:
“Shipper packed containers
If a container has not been packed or filled by or on behalf the carrier …(B) notwithstanding any provision of Law to the contrary, the container shall be considered a package or unit even though it has been used to consolidate the goods the number of packages of units constituting which have been enumerated on the face hereof as having been packed therein by or on behalf of the merchant and the liability of the carrier (if any) shall be calculated accordingly.”
Colman J held that as a matter of interpretation, the containers were not “packages” and the parties could not agree to make them so.
He followed American decisions which applied the Hague-Visby amendments to USA COGSA, despite the fact that USA COGSA had not been amended in line with Hague- Visby i.e. he held that when the Bills of Lading did not enumerate the packages on the bill of lading, the containers were to be treated as packages.
The majority of the Court of Appeal, Phillips and Mummery LJJ, held that Art.III rule 3 was determinative – carriers are not bound to record details which they have no means of checking – therefore the onus is on cargo to prove the packages in a container.
Qualifying cargo/shipper’s description by “said to contain” did not affect presumption in Art.III rule 4 – this finding was contrary to a concession made by Counsel for cargo viz that the onus remained on cargo to prove the packages in the situation where the packages were enumerated but qualified by “STC”.
Hirst LJ – despite the objections to the American approach- – would have followed Colman J exactly on this point in the interests of international uniformity.
Phillips LJ relied on the approached followed by Leggatt J in Bekol BV v Terracina Shipping Corporation (July 13, 1988, unreported) where Leggatt J referred to the Oxford English definition of “package”: “a bundle of things packed up, whether in a box or receptacle, or merely compactly tied up – A huge metal container stuffed with goods which will normally themselves be made up in individual packages is not naturally described as a package.
Phllips LJ also referred to a dictum of an American Judge, Judge Beeks: “Bills of lading, though, are hardly appropriate vehicles for such expressions of mutual intent [ the intent of the parties with regards to the question of what the packages were to be] because their contractual terms are commonly the product of unilateral draftsmanship by the carrier incorporating largely self-serving provisions.”
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