Yemgas Fzco & Ors v Superior Pescadores S.A. Panama

A clause paramount referring to the Hague Rules as enacted in the country of shipment may, depending on its wording, refer to the Hague-Visby Rules. Where persuasive authority establishes that the particular clause refers to the original Hague Rules, the court should follow that construction. An agreement under Article IV Rule 5(g) of the Hague-Visby Rules may use a formula, including the original Hague Rules gold limit, and may operate only to the extent that it produces a higher limit. That principle does not apply where the clause was not intended to create such an agreement. The Hague Rules gold limit is converted into national currency at the date of delivery, or the date when delivery should have occurred.

The claimants sought summary judgment in a cargo claim arising from damage to machinery and equipment carried from Antwerp to Yemen on the MV SUPERIOR PESCADORES. The bills of lading contained a clause paramount referring to the Hague Rules as enacted in the country of shipment. Belgium had enacted the Hague-Visby Rules, which also applied compulsorily under the Carriage of Goods by Sea Act 1971.

The parties disputed whether the clause incorporated the original Hague Rules, whether the claimants could use the Hague Rules package limit where it was higher than the Hague-Visby limit, and, alternatively, the date for converting the Hague Rules gold value into money.

1. Construction of the clause paramount. Although the wording could in principle refer to the Hague-Visby Rules, the court followed The Happy Ranger and the corresponding observation of Tuckey LJ in the Court of Appeal. The clause referred contractually to the original Hague Rules. The authorities concerning general paramount clauses and differently worded clauses did not justify distinguishing that conclusion.
2. Higher contractual limit. Article IV Rule 5(g) permits an agreement fixing a higher maximum amount. Such an agreement may use a formula and need not be expressed in special drawing rights. The comparison may be made when the relevant claim is determined, and the agreement is ineffective only to the extent that it produces a lower figure than the compulsory Hague-Visby limit.
3. That principle did not assist the claimants. The clause paramount was not intended to create a separate contractual Hague Rules limitation regime. The parties would have understood the Hague Rules reference to be ineffective on a shipment from Belgium, where the Hague-Visby Rules applied compulsorily. The proposed construction would impose two different limitation regimes and permit a package-by-package pick-and-mix approach. It was commercially implausible and was rejected.
4. Gold conversion date. Alternatively, the Hague Rules limit of £100 in gold represented the gold equivalent identified in The Rosa S. The relevant date for converting that gold value into national currency was delivery, or the date when delivery ought to have occurred, because that was when the loss crystallised and the cause of action accrued. The Hague-Visby conversion rule did not affect the interpretation of the 1924 Convention.
5. The Hague-Visby package limit therefore applied. As the owners had paid that amount, judgment was entered for the defendant owners.