Sideridraulic Systems SpA and Anor v BBC Chartering & Logistic GmbH & Co KG

Deck cargo is excluded from the Hague-Visby Rules only where the contract of carriage states that it is to be carried on deck and it is so carried. A liberty in the booking arrangements to carry cargo on deck may be insufficient, but wording in a bill of lading can satisfy the requirement when construed objectively in its commercial and factual context, including prior dealings between the parties. Where the Rules do not apply compulsorily, a clause incorporating them only in trades where they apply compulsorily will not incorporate them contractually. A contractual reference to United States carriage legislation and jurisdiction does not necessarily operate alongside the Rules where the two regimes are inconsistent.

The claimants, cargo interests, sought an anti-suit injunction and related declarations concerning arbitration in London. The dispute arose from the carriage of ten sand filter tanks from Italy to the United States. One tank was lost and another damaged.

The defendants applied to set aside permission to serve the arbitration claim out of the jurisdiction and to challenge the court’s jurisdiction. The central issues were whether the tanks were deck cargo under the Hague-Visby Rules, whether the Rules were nevertheless incorporated under the Carriage of Goods by Sea Act 1971, and whether United States law and jurisdiction clauses displaced the London arbitration agreement.

1. Application allowed. The tanks were deck cargo. Although they were physically carried on deck, the contractual question was whether the bill of lading stated that they were to be so carried.
2. The master’s remark that all cargo was carried on deck at the shipper’s, charterer’s and receiver’s risk was construed, in its ordinary and natural meaning and in context, as stating that the cargo was carried on deck. The form of the remark, the parallel wording concerning cargo loaded from an open storage area, and the parties’ previous bills of lading supported that construction.
3. Any ambiguity was to be resolved against the defendants, who relied on the bill to establish the exclusion. However, K/S Victoria Street v House of Fraser [2011] EWCA (Civ) 904 confirmed that contra proferentem is rarely useful where ordinary language, commercial sense and context determine the meaning.
4. Because the tanks were deck cargo, they were excluded from “goods” by article I(c) of the Rules. Sections 1(6) and 1(7) of the Carriage of Goods by Sea Act 1971 did not assist the claimants. Clause 3(a) incorporated the Rules only where they applied compulsorily, and that condition was not satisfied.
5. The defendants’ alternative argument failed. If the tanks had not been deck cargo, the Rules would have applied. The bill did not show an intention that United States legislation should operate concurrently with the Rules, which provided inconsistent regimes. The defendants’ application was therefore granted, and counsel were invited to agree the consequential order.

First-instance decision. No earlier appellate decision is stated in the judgment.