Federal Court, Malaysia
Raja Azlan Shah, Chang Min Tat FJJ, Syed Othman FJJ
5 December 1978, 26 May 1979
KEYWORDS
Bill of Lading – Cargo Claim – Lost Cargo – Liability Limitation – Art. IV(5) of Hague Rules – Art. IX of Hague Rules – Validity of Lower Liability Limitation clause in Bill of Lading – Art. III(8) of Hague Rules
FACTS AND DECISION
Two packages of medicine was shipped from Hong Kong to Penang (in Malaysia), under bill of lading subject to Hague Rules. One package, worth about RM25,000, was lost in transit and not delivered to the indorsee of the bill. The indorsee of the bill sued the carrier. Liability was not disputed. Carried relied on liability limitation clause in the bill of lading, by which its liability was limited to HK$300 per package. This was lower than the liability limitation amount in the Art. IV(5) of the Hague Rules.
The court held that the clause was invalid under Art. III(8), which invalidates any agreement between the parties lessening the liabilities imposed by the Rules on the carrier. The court held that, as the value of the goods lost is more than the liability limitation amount in the Art. IV(5), the liability was limited to the Art. IV(5) and the court awarded accordingly an equivalent sum to £100 in gold value (Art. IX of the Hague Rules).
OBSERVATION
It appears that all that the court awarded was in essence a sum equivalent to £100. The ‘£100’ in Art. IV(5) read together with ‘gold value’ are severely lacking in clarity. However, the court have held, logically, that it means ‘gold value’ as at 1924, when the Rules were made. This means the amount of money that will be needed today to buy gold of a quantity that could be purchased in 1924 with £100, which will be a far larger sum: Limitation Sum – Gold Value – Hague Rules, Article IV Rule 5, (1989) 6 MLAANZ Journal Part 2 at pp. 64-65; The Rosa S [1988] 2 Lloyd’s Rep 574 (the £100 was found to be £6,630.50 in 1984); Brown Boveri (Australia) Pty Limited v Baltic Shipping Company,[ [1989] 1 Lloyd’s Rep 518 (NSW Court of Appeal) (the £100 was found to be more than AUD11,000 in 1989);
If this manipulation was not done (as it seems to be so), this decision is not in line with authorities.
Overview by ARUN KASI