Yemgas FZCO & Ors v Superior Pescadores S.A.

A clause paramount in a bill of lading made after the shipment country has adopted the 1968 amendments is ordinarily construed by reference to the amended Hague Rules where it refers to the Hague Rules as enacted in that country. It therefore incorporates the Hague-Visby regime even if it does not use that label, unless its wording expressly differentiates the two regimes. Construction turns on the wording and commercial context at the contract date. The availability of clearer drafting is not decisive. The appeal was dismissed and the Hague-Visby limitation applied. The court left undecided whether the clause fixed an alternative maximum under Article IV Rule 5(g), and the conversion date for the old gold limit.

Machinery and equipment were shipped from Antwerp to Yemen under six bills of lading. Part of the cargo was damaged during the voyage. The cargo owners claimed the higher limitation available under the 1924 Hague Rules, while the shipowners accepted liability only to the Hague-Visby limit.

Males J held that the clause paramount incorporated the old Hague Rules but did not constitute an agreement fixing a higher maximum under Article IV Rule 5(g). He nevertheless confined recovery to the Hague-Visby limit. The appeal concerned whether the clause incorporated the Hague or Hague-Visby Rules, whether Article IV Rule 5(g) applied, and the date for converting the old gold limit.

Disposition. The appeal was dismissed. The Hague-Visby limitation applied, although the Court of Appeal reached that result for a different reason from Males J.

1. Construction of the clause. The clause referred to the Hague Rules in the 1924 Convention, but applied them as enacted in the country of shipment. Belgium had enacted the Hague Rules as amended by the 1968 Protocol. In the United Kingdom, section 1 of the Carriage of Goods by Sea Act 1971 defined the Rules by reference to the amended Convention, and its Schedule enacted the Hague Rules as amended. In the absence of contrary evidence, Belgium was treated as occupying the same position. The clause therefore incorporated the Hague-Visby Rules.
2. Commercial context and authority. The relevant question was what shipping men would understand the clause to mean at the date of the 2008 contract. The fact that clearer wording could have been used did not resolve the construction issue. Nea Agrex S.A. v Baltic Shipping Co. Ltd (The Agios Lazaros) [1976] QB 933 concerned a 1972 contract and provided little assistance on the later wording and legislative context. The Marinor [1996] 1 Lloyd's Rep 301 showed that wording referring to the Rules as amended clearly incorporated the Hague-Visby Rules. Lauritzen Reefers v Ocean Reef Transport Ltd S.A. (The Bukhta Russkaya) [1997] 2 Lloyd's Rep 744 and Parsons Corporation v C.V. Scheepvaartonderneming Happy Ranger [2001] 2 Lloyd's Rep 530 involved clauses expressly differentiating the two regimes.
3. The Happy Ranger. The broad approach attributed to Tomlinson J in the first-instance judgment, that the words as enacted could not refer to the Hague-Visby Rules without an express reference, was mistaken. Tuckey LJ's statement in the Court of Appeal judgment was obiter, so this court was free to form its own view. The construction adopted was supported by JCB Sales v Wallerian Lines (The Seijin) 124 F 3d 132 (1997).
4. Unresolved issues. Once the clause was construed as incorporating the Hague-Visby Rules, it was unnecessary to decide whether it separately fixed a higher maximum under Article IV Rule 5(g), or the date for converting the old £100 gold limit. Longmore LJ indicated that he would have followed the approach assumed in The Rosa S [1998] QB 419. Tomlinson LJ additionally noted that the later agreement on English law made the Hague-Visby Rules applicable under Article X of Schedule 1 to the Act.

1. Court of Appeal (Civil Division) [2016] EWCA Civ 101: dismissed the appeal and held that the Hague-Visby limitation applied.
2. High Court, Queen’s Bench Division, Commercial Court: Males J held that the clause incorporated the old Hague Rules but that recovery was confined to the Hague-Visby limitation.