Tanga Pharmaceuticals Plastics Limited & Ors v Emirates Shipping Line FZE

A contractual incorporation of the Hague Rules may be modified, but only by clear words. A clause paramount incorporating Articles III Rules 6 and 8 ordinarily takes precedence over inconsistent standard terms unless the contract clearly provides otherwise. A contractual time-bar requiring service, rather than issue, of proceedings is ineffective where English law determines that suit is brought on issue. Claims for damage related to goods may include economic damage and damage associated with a salvor’s maritime lien.

The claimants sought indemnities connected with salvage settlements and claims for particular average under bills of lading issued by the defendant carrier. The defendant applied for summary judgment, arguing that the claims were time-barred under a 20-day documentary requirement and a provision stating that suit was not brought until process had been served or jurisdiction obtained.

The bills incorporated the Hague Rules contractually through a clause paramount, while providing for English law and jurisdiction. The central issues were whether the time-bar provisions prevailed over the incorporated Hague Rules, whether the claims fell within the 20-day provision, and whether the service provision was compatible with Articles III Rules 6 and 8.

1. Application dismissed. The defendant’s summary-judgment application failed because the claims were not time-barred.
2. Although parties may modify the Hague Rules where they apply contractually, clear words are required to exclude or limit liability. Contractual construction is a unitary exercise, and incorporated provisions, the clause paramount and the remaining bill terms must be read together.
3. The clause paramount prevailed over clause 18. Its heading, its deliberate incorporation of Articles III Rules 6 and 8, the express qualification concerning the limitation sum under Article IV Rule 5, and clause 9’s direction that liability be determined under clause 2 all supported that conclusion. Clause 18 contained no sufficiently clear indication that it was to override the Hague Rules.
4. The 20-day provision was therefore ineffective against the claims. In any event, the judge held obiter that claims connected with the goods are not confined to physical damage. Economic damage may qualify, and the legal restraint and maritime lien arising from salvage may constitute damage sustained by the goods. The distinction between physical and economic damage is not always useful.
5. The service provision was incompatible with Article III Rules 6 and 8. Read with the English-law and jurisdiction clause, it could postpone suit beyond the point at which proceedings are brought under English procedure and so relieve the carrier from liability. The application consequently failed.