Federal Court, Malaysia

Raja Azlan Shah LP, Lee Hun Hoe CJ (Borneo) & Abdoolcader FJ

17 November 1983

KEYWORDS

Admiralty in Rem Action – Bill of Lading – Misdelivery without presentation of bill – Conversion – Cargo Claim – Time Limitation – Art. III(6) of Hague Rules – Jurisdiction – Stay of Proceedings – Appellate intervention of jurisdiction exercised by High Court judge

FACTS AND DECISION

The holder of a bill of lading brought an action against the shipowner for misdelivery. The bill of had a choice of law clause in favour of Chinese Merchant Marine Act, 1929. The shipowner brought an action in Taiwan, which was pending in appeal. The indorsee of the bill brought an in rem action before the Malaysian court more than one year after the date the goods must have been delivered. The shipowner applied to strike out the proceedings on grounds of jurisdiction and one-year time limit in Art. III(6) of Hague Rules, applicable in Malaysia by virtue of s. 2 of the Carriage of Goods by Sea Act 1950.

The court disagreed with both grounds and dismissed the application to strike out. In disagreeing with the limitation point, the court approved and followed the Singapore Federal Court decision in Peninsular & Oriental Steam Navigation Co Ltd & Ors v Rambler Cycle Co Ltd [1964] MLJ 443. In that case, it was held that Art. III(6) one-year time limitation does not apply to cases of misdelivery that happens after discharge of the cargo from the ship. This was because the entire Hague Rules applies only between the time of loading and the time of discharge, by virtue of Art. II of the Rules.

OBSERVATION

The Alhani [2018] EWHC 1945 (Comm) will support the decision in this case on limitation.

The same principle will apply for the time-limitation and liability limitation (Art. IV(5)) both under the Hague Rules and Hague-Visby Rules. It will equally apply where there is a misdelivery or damage to goods after discharge. However, there are instances where the delivery will be together with discharge, such as where the consignee takes delivery and discharges the cargo from the ship (eg. free-in and free-out). In such cases, if a misdelivery happens together with discharge, then the the one-year time limit, as well as the liability limitation, will apply.

This point can be subject to some argument to the contrary. Hague-Visby Rules discharges the carrier and shipper from all liability ‘whatsoever’ ‘in respect of the goods’. In the case of Hague Rules, the word ‘whatsoever’ is not there, but the words ‘in respect of the goods’ is there. Arguments have been advanced based on these words, in contrast to The Alhani and Peninsular and Oriental Steam Navigation, that the intention of the Rules is to globally provide the time limitation including in misdelivery and post-discharge damage cases. Even if that was not so in the case of Hague Rules, the argument goes, it is at least so in the case of Hague-Visby Rules with the additional word ‘whatsoever’. Similar argument can be advanced in the case of application of liability limitation regime in Art. IV(5) to misdelivery and post-discharge damage delivery cases with the words ‘in any event’ and ‘loss or damage to or in connection with the goods’. The word ‘in any event’ here has been widely interpreted, though not in the context of misdelivery or post-discharge damage: see Daewoo Heavy Industries Ltd v Klipriver Shipping Ltd, The Kapitan Petko Voivoda [2003] EWCA Civ 451; [2003] 1 All ER (Comm) 801; [2003] 2 Lloyd’s Rep 1; (2003) Times, 17 April; [2003] All ER (D) 46 (Apr). and Parker Distributors (Singapore) Pte Ltd v A/S D/S Svenborg & Anor [1982-1983] 1 SLR 153 (Singapore CA).

Overview by ARUN KASI