AP Moller-Maersk A/S (t/a Maersk Line) v Kyokuyo Ltd

A carriage contract is covered by a bill of lading where, from its inception, the shipper could demand one. This remains so if no bill is issued and the parties instead agree sea waybills, absent contractual variation, waiver or estoppel.

Where the compulsory rules apply, references to a bill of lading in the gateway and container provisions must be construed so that the rules operate effectively. Under Article IV rule 5(c) of the Hague-Visby Rules, enumeration requires specification of the number of packages or units. The words “as packed” add no requirement to describe the manner of packing. Under the Hague Rules, a unit is a physical item of cargo. Containerised goods need not have been capable of break-bulk shipment without further packaging.

The respondent claimed for damage to frozen tuna carried in three pre-stuffed containers from Spain to Japan. The carriage contracts contemplated bills of lading on demand. No bills were issued; sea waybills were later issued by agreement.

Andrew Baker J determined preliminary issues in the respondent’s favour in the Commercial Court: [2017] EWHC 654 (Comm). The appeal concerned whether the Hague-Visby Rules applied compulsorily, whether individual tuna loins or containers were the relevant packages or units under the Hague Rules, and whether the waybills sufficiently enumerated the units under Article IV rule 5(c). The central questions were the effect of the contemplated bill of lading and the meaning of enumeration in containerised carriage.

Appeal dismissed. Flaux LJ gave the principal judgment and Gloster LJ agreed.

1. Where the carriage contract, at inception, provided for a bill of lading to be issued on demand, it was “covered by a bill of lading” within Article I(b) of the Hague-Visby Rules. The contract also provided by implication for the issue of a bill of lading within section 1(4) of the Carriage of Goods by Sea Act 1971. Actual issue of a bill was unnecessary. The later issue of sea waybills made no difference because there was no variation, waiver or estoppel.
2. Article X(b) and Article IV rule 5(c) had to be construed purposively. Their references to a bill of lading included the contract covered by such a document and, where no bill was issued, the document containing the enumeration that would have appeared in the bill. This gave effect to the compulsory application of the Rules under section 1(2) and section 1(4) of the Carriage of Goods by Sea Act 1971.
3. Under Article IV rule 5(c), “enumerated” meant that the number of packages or units was specified. “As packed” was descriptive and did not require a further statement of how the goods were packed inside the container. The waybills therefore enumerated the individual tuna loins as units. The additional requirement adopted by the majority in El Greco was an impermissible gloss and should not be followed.
4. The Hague Rules issue was academic because the Hague-Visby Rules applied, but was fully argued. “Unit” meant a physical item of cargo or piece. Individual tuna loins could therefore be units even though containerised. Article IV rule 5 imposed no break-bulk capability requirement, and the rejected “functional economics” test should not be revived.

The appeal was dismissed on all three issues.

• Court of Appeal (Civil Division) — dismissed the appeal and upheld the determination below: [2018] EWCA Civ 778.
• High Court of Justice, Queen’s Bench Division, Commercial Court — Andrew Baker J determined the preliminary issues in favour of the respondent: [2017] EWHC 654 (Comm).