A cargo of fishoil was carried on board the tanker Aqasia under a voyage charterparty which incorporated Article IV of the Hague Rules. Art IV, r 5 states:
"... 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 ...."
(The wording under the Hague-Visby rules is significantly different.) On arrival at the discharge port, part of the cargo was found to have suffered damage. The charterer claimed damages from the owners. Owners accepted in principle that they were liable, but argued that they were entitled to limit their liability under Art IV, r 5 of the Hague Rules to £100 per mt of the cargo damaged.
At first instance Sir Jeremy Cooke held Art IV, r 5 of the Hague Rules does not apply to bulk cargo, so owners could not rely on it to limit their liability. Owners appealed.
Held (Court of Appeal):
The appeal was dismissed:
- The clear meaning of "unit" is a physical item of cargo or shipping unit and not a unit of measurement or a freight unit;
- Accordingly, Article IV rule 5 does not apply to bulk cargo;
- This view was confirmed by the travaux préparatoires of the Hague Rules and by most of the authorities and textbook and academic commentaries.
(Sea Tank Shipping AS v Vinnlustodin HF [2018] EWCA Civ 276)
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