Batavia Eximp & Contracting (S) Pte Ltd v Pedregal Maritime SA - The Taikoo Brilliance

DMC/SandT/26/14

England

Batavia Eximp & Contracting (S) Pte Ltd v Pedregal Maritime SA (The “Taikoo Brilliance”)

English Commercial Court: Robin Knowles J: [2025] EWHC 1878 (Comm): 22 July 2025

Judgment Available on BAILII @ https://www.bailii.org/ew/cases/EWHC/Comm/2025/1878.html

Nigel Eaton KC and Helen Morton (instructed by Preston Turnbull LLP) for Batavia (Cargo Interests)

Chris Smith KC, Maya Chilaeva and Sam Mitchell (instructed by HFW) for Pedregal (Contractual Carriers)

BILLS OF LADING: MISDELIVERY OF CARGO: CARRIAGE OF PINE LOGS CARGO ON DECK AND UNDER DECK: VESSEL ARRESTED IN SINGAPORE TO OBTAIN SECURITY FOR CLAIMS: BILLS INCLUDED LONDON ARBITRATION CLAUSE: ARBITRATION NOT COMMENCED WITHIN ONE YEAR OF DELIVERY OF CARGO: WHETHER PROCEEDINGS IN SINGAPORE AMOUNTED TO COMMENCEMENT OF “SUIT” WITHIN ARTICLE III, RULE 6 OF THE HAGUE-VISBY RULES: WHETHER CLAIM BY LAWFUL HOLDERS OF BILLS TIME-BARRED UNDER ARTICLE III, RULE 6 FOR CARGO CARRIED ON DECK IN VIEW OF EXEMPTION TO DEFINITION OF “GOODS” IN ARTICLE I(C): ARBITRATION ACT 1996 SECTION 69 APPEAL ON POINTS OF LAW

Summary                                        

On an appeal from a final arbitration award on points of law under section 69 of the Arbitration Act 1996, the High Court, in dismissing the appeal on the first question but allowing the appeal on the second question, held that:

(1) Question One: the Singapore arrest proceedings commenced only to obtain security for Cargo Interests’ claims did not constitute “suit” for the purpose of Article III, Rules 6 of the Hague-Visby Rules, because “suit” for that purpose meant proceedings that could decide the claim itself. The result was a finding that Cargo Interests had failed to commence suit, in accordance with the London arbitration clause agreements in the bills of lading, within one year of the delivery of the cargo; but

(2) Question Two: the words “which by the contract of carriage is stated as being carried on deck” in the exception to the definition of “Goods” to which the Hague-Visby Rules apply in accordance with Article I(c), did not require precise identification of the specific parcels of the cargo carried on deck and were, in this case, satisfied by the statements “22,994 pieces as carried on deck” and “11,092 pieces as carried on deck” in the two bills of lading for the cargo that had in fact been carried on deck. In consequence, Cargo Interests’ claim for misdelivery in relation to the cargo that had been carried on deck was not subject to the Article III, Rule 6 one-year timebar, which did apply to the cargo carried under deck.

Case note contributed by Jim Leighton, LLM (Maritime Law), LLB (Hons), BSc (Hons), Solicitor Advocate of England & Wales, IMI Registered Mediator, LMAA Supporting Member and Deputy Editor of DMC’s CaseNotes

Background

A cargo of pine logs timber for which four bills of lading were issued was shipped on board the vessel “Taikoo Brilliance” (the “Vessel”) in New Zealand and was carried to and delivered at Kandla, India, without presentation of the original bills of lading.

Two of the four bills of lading referred to the fact that some of the cargo as identified therein had been carried on deck, one bill referring to “22,994 pieces as carried on deck” and the other bill referring to “11,092 pieces as carried on deck”.

By an arbitration clause agreement in all four of the bills of lading the parties had agreed that any dispute thereunder would be referred to arbitration in London. Further, the Hague-Visby Rules had been incorporated into all the bills of lading.

As the cargo had not been delivered to the lawful holders of the bills of lading, Cargo Interests issued a writ in the High Court in Singapore for the arrest of a sister ship of the Vessel for the purpose of obtaining security for their claims.

While the Singapore arrest proceedings had been commenced within one year of the delivery of the cargo, arbitration in London was not commenced against Contractual Carriers until after one year from the delivery of the cargo.

Contractual Carriers argued and the London arbitration tribunal held that Cargo Interests’ claims had been time-barred pursuant to Article III, Rule 6 (fn.1) of the Hague-Visby Rules, but in respect only of the cargo carried under deck.

Cargo Interests applied for and obtained permission to appeal from the High Court in relation to two questions of law.  The first question was whether the Singapore arrest proceedings constituted “suit” for the purposes of Article III, Rule 6. The second question was what was required to satisfy “Goods” being excepted from the application of the Hague-Visby Rules by Article I(c) (fn.2) for deck cargo.

Judgment

The Judge outlined the facts and the principles applicable to the interpretation of the Hague-Visby Rules before turning to the two questions being appealed.

First Question

The Judge noted that the Singapore arrest proceedings had only been commenced for the purpose of obtaining security for Cargo Interests’ claims under the four bills of lading.  However, he pointed out that a determination of the merits of Cargo Interests’ claims for misdelivery would, absent further agreement (which had not been made), require arbitration in London, in accordance with the arbitration clauses in the bills of lading.

The Judge recognised that the ordinary meaning of the word “suit” was capable of extending to proceedings validly brought for security.  However, he did not accept that proceedings for security only were within the ordinary meaning of the word in the context and in the light of the object and purpose of Article III, Rule 6 of the Hague-Visby Rules.  The object was shown, in his judgment, to require “suit”, for the purpose of the one-year timebar, to mean proceedings that could decide the claim.  That required, if time was to stop running, substantive proceedings to be commenced; namely, proceedings to establish liability.

The Judge was also of the view that Cargo Interests’ analysis would require, contrary to the object of Article III, Rule 6, Contractual Carriers to leave their books open for an indefinite period of time, simply by reason of security having been sought without the certainty that there would be substantive proceedings in due course.  That was uncommercial because knowledge that substantive proceedings on the merits may or may come at some point in future did not “clear the books”. That was not an unjustified gloss on the text, because it was faithful to that text in its context and in light of its object and purpose, which was to provide carriers with finality as regards the possibility of cargo claims being brought in relation to the voyage in question after the passage of one year from the date of final delivery.

Second Question

The Judge noted that the leading shipping law practitioner textbooks did not deal with the question in depth.

Contractual Carriers argued that the bills of lading had to identify not just the quantity of cargo being carried on deck but rather the precise parcels being so carried.  That was premised on the words “which … is stated” importing an identification requirement in relation to each item, in order for that item to fall within the exception, and thus to fall outside the scope of the Hague-Visby Rules.  That argument led to the conclusion that, if the bill of lading contained only a statement of the quantity of cargo being carried on deck, there was no specific item in relation to which it could be said that it had been “stated as being carried on deck”.  In such a case, all that could be stated (unless the whole cargo was on deck) was that the item was part of a bulk of cargo part of which had in fact been carried on deck.

The Judge agreed that the purpose of Article I(c) providing for a bill of lading to state that cargo was carried on deck was to allow the lawful holder of the bill to identify whether or not the goods carried on board the vessel fell within the scope of the Hague-Visby Rules.  That affected the liability regime that applied which could be of importance to insurance.  However, in the Judge’s view, however desirable it may be “to identify quickly and easily” (in Contractual Carriers’ own words) the quality of the identification required to determine whether or not goods carried on board fell within the scope of the Hague-Visby Rules, that took the matter further than the words used allowed.

In the present case, the tribunal had concluded that it had been sufficient that the two bills of lading identified the amount of cargo carried on deck.  In the Judge’s view, it was important to recognise that it was an unavoidable consequence of the definition within Article I(c) that there would be evidential questions in each case, requiring the exercise to draw on additional material. This led the Judge to conclude that what was evidentially required might vary depending on the nature of the cargo, perhaps including whether it was or was not homogeneous, and the circumstances. Therefore, Contractual Carriers were asking too much of a definition that was simply and practically expressed in the Hague-Visby Rules.

Conclusion

By the court allowing one and dismissing the other appeal on points of law from the final arbitration award, Cargo Interests’ claims in relation to the two bills of lading for which the cargo had been carried under deck were time-barred under Article III, Rule 6 of the Hague-Visby Rules, whereas the claims in relation to the two bills of lading for which the cargo had been identified as having (and had in fact) been carried on deck were not time-barred by reason of the Article I(c) exemption.

Comment

This judgment, on the first question, confirms what should be reasonably obvious; namely, that where proceedings have not been commenced in the agreed forum in time, for the purpose of determining the merits of the substantive cargo claim, the claim is extinguished and absolutely time-barred when the Hague-Visby Rules apply.  This judgment, accordingly, builds on The “Alhani” (fn.3), which dealt with the significance of any foreign proceedings brought in breach of the dispute resolution forum agreed for the purpose of Article III, Rule 6.

The Judge, on the second question, has adopted a pragmatic approach.  Having accepted that there can be degrees of certainty, the Judge also ackowledged that the certainty provided by Article I(c) had its limits.  Therefore, while the interpretation of Article I(c) may not vary from case to case, what is required to satisfy Article I(c) may vary from case to case.  That requires a practical and commercial approach.  So, best practice may call for a bill of lading to contain a statement that improves on that seen in the present case.  This reflects the Judge’s observation that Article I(c) is, perhaps, better seen as a provision that asks two factual questions.  The first asks what cargo was carried on deck.  The second asks whether the statement in the bill was sufficient to identify it.

Footnote 1:

“… the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered.”

Footnote 2

“‘Goods’ includes goods, wares, merchandise, and articles of every kind whatsoever except … cargo which by the contract of carriage is stated as being carried on deck and is so carried.”

Footnote 3:

Deep Sea Maritime Limited v Monjasa A/S (The Alhani) [2018] EWHC 1495 (Comm) – see Issue (2) as summarised in the DMC case note available at https://www.onlinedmc.co.uk/index.php/Deep_Sea_Maritime_v_Monjasa_-_The_Alhani