Homburg Houtimport BV v Agrosin Private Ltd (The Starsin)

A bill of lading must be construed as a whole. A signature describing a charterer as the carrier may make the charterer the contracting party, but a demise clause can give priority to printed terms providing that the bill takes effect only as a contract with the owner. Progressive damage caused by one completed breach ordinarily gives rise to a single cause of action when more than negligible damage first occurs. Later deterioration does not create a new cause of action for each successive owner. A Himalaya clause normally extends to an independent contractor only the carrier’s own contractual defences and immunities. It does not confer a broader blanket exemption from liability.

The claimants bought timber and plywood shipped on the vessel Starsin under liner bills issued by the time charterer, Continental Pacific Shipping Ltd. The bills described CPS as carrier, but also contained identity-of-carrier and demise clauses stating that the contract was with the owner or demise charterer. Colman J held that the bills were charterers’ bills, that the owner could be sued in tort for damage occurring after title passed, and that the Himalaya clause gave the owner the carrier’s protection only. He refused a late amendment relying on the Latent Damage Act 1986.

The owner appealed and the claimants cross-appealed. The central questions concerned contractual liability, progressive cargo damage, the scope of the Himalaya clause, and the proposed statutory amendment.

1. Contract. By majority, Chadwick LJ and the Vice-Chancellor held that the bills were owners’ bills. The bills had to be construed as a whole. The demise clause was intended to complement, not repeat, the identity-of-carrier clause. Its words, including the reference to anything appearing to the contrary, required the bills to take effect only as contracts with the owner where the time charterer issued them with the owner’s authority. The owner was therefore liable in contract. Rix LJ dissented and would have treated the bills as charterers’ bills.
2. Tort. Rix LJ and Chadwick LJ held, and the Vice-Chancellor agreed in the result, that the progressive condensation damage was caused by a breach completed when more than negligible damage occurred at the beginning of the voyage. Later progression did not create a fresh cause of action on transfer of title. The claims therefore failed except for Makros Hout, which had acquired title before the ocean voyage and before condensation damage occurred. The broader question whether a duty of care could arise where title passed after breach but before damage was left unresolved.
3. Himalaya clause. The court unanimously held that the owner was an independent contractor employed by the charterer. The first limb was a covenant protecting the carrier against indirect claims and enforceable by the carrier. The second limb extended to third parties only the carrier’s own contractual protections. Since the carrier had no exemption for negligent stowage, the owner had none.
4. Amendment. The refusal to permit a late amendment under section 3(1) of the Latent Damage Act 1986 was upheld because the proposed claim required further factual and Malaysian-law investigation.
5. The appeal was allowed in relation to the tort claims except Makros Hout, the cross-appeal was allowed on contractual liability, and the appeals concerning the Himalaya clause and amendment were dismissed. Costs were ordered at 50%; permission to appeal was refused.

• Court of Appeal: The court varied the decision below, holding by majority that the owner was liable in contract. The tort claims failed except for Makros Hout; the Himalaya-clause conclusion and refusal of the late amendment were upheld.
• Commercial Court: Colman J held that the bills were charterers’ bills, that the owner was liable in tort for damage occurring after title passed, that the Himalaya clause gave the owner the carrier’s protection only, and refused permission to amend to plead the Latent Damage Act 1986. The decision is reported at [2000] 1 Lloyd's Rep 88.