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'''Sea Tank Shipping AS v (1) Vinnlustodin HF & (2) Vatryggingafelag Islands FH [2018] EWCA Civ 276 – the “Aqasia”'''
'''England and Wales Court of Appeal (Civil Division), on appeal from the Queen’s Bench Division, Commercial Court: Lady Justice Gloster, David Richards and Flaux lJJLJJ: [2018] EWCA Civ 276'''
Mr Charles Debattista, instructed by Winter Scott LLP, for the Appellant
The dispute arose out of damage to a cargo of fish oil in bulk carried on board the tanker “AQASIA”, pursuant to a charterparty between Sea Tank Shipping (“Sea Tank”), the appellant, as disponent owners, and the first respondent (“Vinnlustodin”) as charterers. The charterparty provided for the carriage of 2,000 tons of fish oil in bulk from Iceland to Norway for a lumpsum freight of NOK817,500. The Charterparty incorporated the Hague Rules, including Article IV rule 5.
The vessel left Iceland and proceeded to Norway to load another cargo of fish oil, some of which was loaded in tanks 1P, 2P and 5S - hence mixed in with the subject cargo. On arrival at the discharge port, some 547mt of the subject cargo was found to be damaged. For the loss it had suffered as owner of the subject cargo, Vinnlustodin claimed damages in the sum of USD367,836 from Sea Tank. The second respondent who was the insurer of the cargo, joined the proceedings. Sea Tank accepted liability in principle for the damage to the subject cargo but contended that it was entitled to limit its liability to £54,730.90 (that is, £100 per metric ton of cargo damaged) under Article IV rule 5 of the Hague Rules. The parties agreed that, notwithstanding the arbitration clause in the charterparty, the Commercial Court should have jurisdiction to determine the preliminary issue as to whether Sea Tank was entitled to limit its liability to that figure.
At first instance, the Judge held that the wording “package or unit” under Article IV rule 5 of the Hague Rules did not apply to bulk cargoes, nor did it refer to an abstract unit of measurement. The Judge found that it could not have been in the contemplation of those who drafted the Hague Rules in 1924 that “unit” should apply to bulk cargo as, during that period of time, the gold value of £100 per unit measure was far greater than the value of most bulk cargo, irrespective of which “unit” of weight or measure applied.
'''Grounds on of appeal'''
Sea Tank were granted leave to appeal on two grounds:
2. the Judge made a mistake in concluding that the limitation of liability in Article
IV rule 5 of the Hague Rules did not apply to bulk cargo.
'''Decision of the Court of Appeal'''
