FIMBank plc v KCH Shipping Co Ltd

The Hague-Visby Rules time bar in Article III, rule 6 applies in principle to claims for misdelivery occurring after discharge. Its wording concerns delivery in a broader context and is directed to finality and enabling the carrier to close its books. The parties may contractually extend the operation of the Rules after discharge, including by an implied term where the contract makes that necessary and obvious. A clause relieving the carrier from responsibility for loss or damage after discharge does not, without clearer wording, disapply the Article III, rule 6 time bar. The result may differ where the bill of lading expressly defines a Hague Rules period ending on discharge and makes discharge due delivery.

FIMBank, as holder of bills of lading, claimed against KCH as carrier for alleged misdelivery of cargo after discharge. The bills incorporated the Hague-Visby Rules, including the one-year time bar in Article III, rule 6. FIMBank served its notice of arbitration more than one year after delivery or the date when the goods should have been delivered.

An arbitral tribunal held that the time bar could apply to post-discharge misdelivery and that clause 2(c) of the bills did not disapply the Rules after discharge. FIMBank appealed on two questions of law under section 69 of the Arbitration Act 1996: whether Article III, rule 6 applied to post-discharge misdelivery, and whether clause 2(c) excluded the Rules for that period.

1. Appeal dismissed. The arbitral tribunal’s conclusions on both questions were upheld.
2. Article III, rule 6 of the Hague-Visby Rules applies to claims for misdelivery after discharge. The provision is concerned with delivery in a broader context and uses emphatic language directed to all liability in respect of the goods. Its purpose is to achieve finality and enable the carrier to close its books. The court rejected the submission that the time bar necessarily ends with the Rules’ ordinary period of responsibility at discharge.
3. The authorities from other common-law jurisdictions did not establish an international consensus requiring the contrary result. Although several decisions supported FIMBank’s argument, the issue had often been considered on the assumption that Article III, rule 6 necessarily followed the period of responsibility under the other Rules.
4. Alternatively, the same result followed from the contract. The tribunal was entitled to find that the Hague-Visby Rules were incorporated so as to apply after discharge until right and true delivery. Such an implied term does not apply automatically to every contract and cannot be used to rewrite the Rules. It depends on the contract as a whole and the usual necessity and obviousness requirements.
5. Clause 2(c), which stated that the carrier was not responsible for loss or damage after discharge, did not disapply the Article III, rule 6 time bar. It did not expressly address the Rules generally, delivery, or the carrier’s immunity under the time bar. The clause was materially different from the detailed clauses in The MSC Amsterdam, which expressly defined the Hague Rules period as ending on discharge and stated that discharge constituted due delivery.
6. The claim was therefore time-barred on the tribunal’s preliminary-issue approach, irrespective of whether delivery in fact occurred after discharge.

• High Court (Commercial Court): permission to appeal under section 69 of the Arbitration Act 1996 was granted by Butcher J on 22 December 2021. Sir William Blair dismissed the appeal and upheld the Partial Final Award.