Deep Sea Maritime Ltd v Monjasa A/S

Article III rule 6 of the Hague Rules applies to misdelivery claims where the misdelivery occurs during the period of responsibility. A claim cannot evade the one-year time bar merely because it is pleaded in tort, conversion or bailment rather than as a breach of the Rules. In parallel proceedings, an earlier action may protect the claim only if it was commenced before a competent court and remains effective when the later time-bar issue is determined. Proceedings brought in breach of an exclusive jurisdiction clause ordinarily do not qualify. Declaratory relief concerning foreign proceedings remains discretionary and engages considerations of comity.

Owners, operators of the tanker ALHANI, carried bunker fuel under a bill of lading incorporating the Hague Rules and an English exclusive jurisdiction clause from a charterparty. The cargo was transferred ship-to-ship without production of the bill of lading. Monjasa commenced proceedings in Tunisia, later commenced English proceedings, and advanced claims in contract, bailment and conversion.

Owners sought summary judgment under CPR Part 24 on the ground that the claims were extinguished by Article III rule 6. The court had to decide whether the one-year time bar applied to misdelivery and whether the Tunisian Proceedings constituted the bringing of suit despite the exclusive jurisdiction clause.

The application succeeded in substantial part. The court concluded that declarations should be agreed reflecting the extinguishment of Monjasa’s claims, subject to the qualification concerning any claim continuing in Tunisia. It declined to grant a declaration determining the effect of Article III rule 6 within the Tunisian proceedings themselves.

1. Misdelivery. Article III rule 6 of the Hague Rules uses broad language. The expressions in any event and all liability are capable of covering delivery of goods to an unauthorised recipient. The reasoning in The Happy Ranger [2002] EWCA Civ 694, The Kapitan Petko Voivoda [2003] EWCA Civ 451, The Captain Gregos [1990] 1 Lloyd’s Rep. 310 and The New York Star [1981] 1 WLR 138 supported that construction.
2. Misdelivery during the Hague Rules period of responsibility will ordinarily be capable of being pleaded as a breach of the Article III rule 2 duties to keep, care for and discharge the goods. The time bar is not confined to claims labelled as breaches of the Rules and cannot be avoided by pleading negligence, conversion or bailment. The court also held, as an alternative basis, that Article III rule 6 extends to obligations arising during the period of responsibility with a sufficient nexus to identifiable goods. Article III rule 8 must be read pragmatically so that, where rule 6 applies, a shorter contractual time limit cannot be agreed.
3. Parallel proceedings. The earlier action must have been commenced before a competent court and remain effective at least when the later time-bar issue is finally determined. The shipowner must be unable to establish, on the balance of probabilities, that the earlier action will be found ineffective in its forum. A merits judgment in favour of the cargo claimant constitutes effective proceedings. Where the claimant is forced into another forum for reasons not attributable to it, the first action may constitute suit. Proceedings commenced in breach of an exclusive jurisdiction or arbitration agreement ordinarily do not.
4. The Tunisian Proceedings were commenced in breach of the incorporated Exclusive Jurisdiction Clause. They therefore could not constitute suit for the purpose of defeating the time bar in the later English proceedings. Whether they constituted suit for the purpose of the Tunisian proceedings themselves raised separate questions of comity, foreign law and discretionary declaratory relief. The court declined to determine that issue.