These were appeals from the judgment of Knowles J in Batavia Eximp & Contracting v Pedregal Maritime SA [2025] EWHC 1878 (Comm) (CMI2704). The facts were set out in that judgment. The two issues on appeal were:

1. whether an action for security was a 'suit' within the meaning of art 3.6 of the Hague/Hague-Visby Rules (the Rules), which provides that 'the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered';
2. where cargo covered by a bill of lading is carried partly on, and partly under deck, what statement must appear on the face of the bill of lading to engage the exception in art 1.c of the Rules, which provides that: '"Goods" includes goods, wares, merchandise, and articles of every kind whatsoever except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried.'

Held: 1) 'Suit', for the purposes of art 3.6 of the Rules, means proceedings that can decide the substantive claim, and does not include security proceedings; 2) In order for the art 1.c exclusion in the Rules to be engaged regarding part of the cargo, the statement on the bill must specifically identify the cargo to be carried on deck, such as by parcel number or serial number.

As the cargo was shipped in New Zealand, the bills were compulsorily subject to the Rules. New Zealand has ratified a version of the Hague-Visby Rules brought into effect by a 1979 Protocol which uses Special Drawing Rights as the unit of account for limitations of liability in art 4.

Although the meaning of 'suit' in art 3.6 has been considered in numerous authorities, they have not addressed, at least directly, whether that term encompasses proceedings purely seeking security (typically by the arrest of a vessel) for a subsequent substantive claim for loss or damage to the goods under carriage.

The language of art 3.6 strongly indicates that 'suit' means proceedings to establish liability, but it is necessary to review that provisional view in the light of the object and purpose of the rule. In FIMBank plc v KCH Shipping (The Giant Ace) (CMI2555), Lord Hamblen stated at [84]:

With regard to the object and purpose of the Article III, 6 time bar, there are a number of authorities which emphasise that it is to achieve finality and to enable accounts and books to be closed ...

The object of finality connotes more than simply the negative aspect of enabling books to be cleared if no claim has been notified within one year. The first sentence of art 3.6 provides for notification of loss or damage promptly after discharge. The requirement of bringing suit within a year thereafter is obviously designed to ensure more than merely notification, but the commencement of a claim for the loss or damage previously notified. The rule therefore gives the carrier the certainty that it can clear its books if a substantive claim has not been brought within one year, removing any uncertainty as to whether alleged loss or damage will result in a substantive claim. But it also ensures that claims are pursued promptly, as those which are issued but struck out will cease to count as a 'suit'. The object and purpose of the time bar in art 3.6 is to ensure the prompt making and pursuit of substantive claims for loss of or damage to goods.

The second issue is, what must be stated on the face of a bill of lading for cargo to be carried 'on deck' under art 1.c of the Rules? This art excludes deck cargo (stated to be such and in fact carried on deck) from its ambit, so that the irreducible duties of the carrier to exercise due diligence and care under arts 3.1 and 3.2 do not apply, but neither do the exclusions and limitations of liability in art 4 and the time bar in art 3.6. The terms of the carriage of such deck cargo would be a matter of contract and applicable common law provisions.

Cargo stated to be carried on deck is subject to a significantly different risk profile, both of loss or damage and in relation to responsibility therefor, than that carried below deck, with a potentially significant impact on insurance terms and requirements. Where an entire consignment is stated to be carried on deck and is so carried, the applicable regime and risk profile will be clear-cut. But where, as here, part only of a consignment is to be carried on deck, there will potentially be two different regimes applying to a single consignment.

On the ordinary meaning of art 1.c, cargo can only be 'stated' to be carried on deck if it is identified, or identifiable, as the cargo in question. If, as here, some items in a consignment of 'goods, wares, merchandise or articles' which are not homogenous are carried below deck and some on deck, it is difficult to see how the latter can be 'stated' to be on deck unless they are specifically identified. Otherwise, the statement is not that certain cargo is carried on deck, but merely that some unidentified items of the total cargo are so carried. It must be borne in mind that the effect of the statement is that some of the cargo will be classified as 'goods', and some will not be. This will result in the two parts of the cargo being subjected to two different contractual regimes, one incorporating the Rules and one not. It is difficult to see how such division could logically be effected between items of differing characteristics unless the relevant items are ascertained and allocated to each category and each regime: that must entail identifying those stated to be carried on deck, the default being that all others are 'goods', and therefore subject to the Rules.

The object and purpose of art 1.c plainly requires that, if items of cargo vary in value to any extent, it is necessary for those carried on deck to be identified so that they can be distinguished from those carried below deck, such as by parcel number or serial number. That is essential to enable the shipper and any subsequent holders of bills to make an informed assessment of the risks and to arrange insurance accordingly.