The plaintiff sought the arrest of the Tiger Creek to secure its claim for non-delivery of cargo. Bengal Tiger Lines Cyprus, the charterer of the vessel, entered an appearance and contested the maintainability of the suit. The defendant argued that another admiralty suit on the same cause of action had been filed by the plaintiff on 7 September 2001, but had subsequently been withdrawn. The second suit had been instituted by the plaintiff more than one year after the alleged non-delivery of cargo and was not maintainable, in as much as the liability of the shipowner was discharged on the expiry of one year after the alleged delivery or non-delivery of the goods in question.

The defendant relied on the Indian Carriage of Goods by Sea Act 1925 (COGSA). The Schedule to COGSA contains the Rules relating to Bills of Lading. Article 3.6 of the Rules provides: 'In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.' The defendant emphasised that the Schedule to COGSA contains the Hague Rules, which were developed in the international Convention beginning at Hague and concluded in 1924 at Brussels.

The plaintiff did not dispute that more than one year had elapsed between when the goods should have been delivered and the institution of this admiralty suit. However, the plaintiff argued that art 3.6 of the Schedule to COGSA was not applicable.The bill of lading did not contain an express statement that it would have effect subject to the provisions of the Rules as applied by the Act. Therefore, the Rules did not have any statutory force on the bill of lading. Clause 25 of the bill of lading only made out a contractual provision. Therefore, s 28 of the Contract Act, which voids limitation of liability clauses in contracts, applied. In so far as the objection on the bar of suit under Order XXIII of the Civil Procedure Code is concerned, the plaintiff submitted that the owners of the two vessels arrested in the two suits, namely the MV Gilian and the MV Tiger Creek, were different. Therefore, the withdrawal of the earlier suit was operative against the defendant, who was different from the defendant in this suit. The plaintiff further contended that, in an admiralty proceeding in India, a vessel is clothed with a juristic personality, and the withdrawal order, which was related to a different vessel, was against a different juristic entity.

Held: The Court cannot, at this stage, come to the conclusion that the second suit is barred as a suit on the same subject matter. The point of maintainability under Order XXIII of the Civil Procedure Code therefore does not succeed. However, the second suit is not maintainable in view of the bar contained under art 3.6 in the Schedule to COGSA, and has to be dismissed. The clause completely extinguishes the liability of the carrier and is not merely a case of limitation. The suit is dismissed and the order of arrest is discharged.

A perusal of COGSA shows it was brought into existence to give effect to a Code of Rules drafted at the International Conference on Maritime Law held in Brussels. This is clear from the statement of objects and reasons of the Act:

Clause 2. There has been a demand for many years among the different commercial interests which handle bills of lading for uniformity among all maritime countries in the definition of the liabilities and risks attaching to the carrier of goods by sea. Some countries, e.g. Canada, Australia, and the United States of America, enacted legislation prohibiting carriers of goods by sea from contracting themselves out of certain kinds of liability. The matter was discussed at several International Conferences between shipowners, shippers and bankers if an attempt to secure the universal adoption of an agreed set of rules.

Clause 3. A Code of rules was drawn up in 1921 by the International Law Association at the Hague. These were subjected to criticism by the various interests affected till finally agreement was reached at the International Conferences on Maritime Law held in Brussels in October 1922, and again in October 1923. A Code of rules defining the responsibilities and liabilities to which a carrier of goods by sea should be subject and also the rights and immunities he was entitled to enjoy was drawn up, and it was unanimously recommended that every country should give legal sanction to these rules. The United Kingdom has done so by the Carriage of Goods by Sea Act (1924) (14 and 15 Geo. V., c. 22). It is proposed to do the same in India by this Bill.

Clause 4. This Bill follows closely the English Act. The agreed Code of rules are reproduced in the Schedule. Clause 5 of the Bill exempts from these rules goods carried in the coasting trade under documents other than bills of lading whilst Clause 6 saves the carrier from claims for shortage of weight in certain cases of bulk shipments where, by the custom of the trade, the weight entered in the bill of lading is a weight ascertained or accepted by a third party other than the carrier or shipper and this fact is so stated in the bill of lading.

From the preamble of COGSA, the intention is further made clear:

Whereas at the International Conference on Martime Law held at Brussels in October, 1922, the delegates at the Conference, agreed unanimously to recommend their respective Governments to adopt as the basis of a convention a draft convention for the unification of certain rules relating to bills of lading;

And whereas at a meeting held at Brussels in October, 1923, the rules contained in the said draft convention were amended by the Committee appointed by the said Conference;

And whereas it is expedient that the said rules as so amended and set out with modifications in the Schedule, subject to the provisions of this Act, have the force of law with a view to establishing the responsibilities, liabilities, rights and immunities attaching to carriers under bills of lading.

The dominant intention behind enacting the Act was thus to bring about uniformity and unification of certain rules relating to the bill of lading. Since in the shipping business a voyage across the sea to different ports of different countries is inevitable, it was felt, and quite rightly so, that different clauses in different bills of lading will create confusion. So clauses of bills of lading were sought to be standardised and the basic components of those clauses were reduced in the form of Schedule to the Act. It was made very clear from the preamble that those Rules in the Schedule to the Act 'shall have the force of law' with a view to clearly demarcating the responsibilities, liabilities, rights and immunities of carriers under the bills of lading.

Originally, the aim was that the Rules would be formulated voluntarily through a standard bill of lading. But this voluntary approach did not work. Then the discussions led to the formulation of the Hague Rules in 1921. After that, at the International Convention in Brussels in 1921, these Rules were adopted, requiring parties to this Convention to enact legislation incorporating the Hague Rules. As a result, the United Kingdom enacted the Carriage of Goods by Sea Act in 1924 and in India COGSA was enacted in 1925.

Given this express legislative intent, the Court finds that s 2 of COGSA is mandatory in nature so far as the applicability of the Rules in the Schedule to COGSA is concerned. Of course those rules will apply only to carriage of goods by ships carrying goods from any port in India to any other port, whether in or outside India. The requirement of s 4, in this context, is an additional requirement, namely that every bill of lading or similar document of title, which contains or evidences any contract to which these Rules apply, shall contain an express statement that such documents are to have effect subject to the provisions of the Rules as applied by COGSA. Construing those two sections, the Court is of the opinion that the mandate of s 2 is not dependant on compliance with the requirement of s 4. Section 2 is subject to only two conditions: (i) s 2 will apply subject to the provision of COGSA, namely s 7 of COGSA which states that nothing in the Act shall affect the operation of ss 331 and 382 of the Merchant Shipping Act 1958; and (ii) s 2 will apply to ships carrying goods from any port in India to any port in or outside India.

The Court has taken this view for the following reasons:

(a) It is obvious that the bill of lading or similar document of title referred to in s 4 is a contractual document between the parties. It is well settled that by a contract between the two parties, the operation of a statute cannot be waived or abandoned or frustrated.

(b) Since s 2 is an Act of Parliament which gives effect to an international maritime law Convention, it cannot be washed away, nor can its application be suspended by a contract, which is an act of the parties. Such a construction is opposed to all norms of interpretation, especially in a case where s 2 has not been made expressly subject to the contract between the parties.

The Court is further of the view that s 4 has two parts. The first part makes it clear that to every bill of lading issued in India which contains or evidences a contract, the Rules will apply. In addition, the second part of s 4 states that bills of lading shall contain an express statement that they are to have effect subject to the provisions of the Rules. Therefore, it cannot be said that unless an express statement is made, the Rules cannot apply. The latter part of s 4 of COGSA has been inserted by way of abundant caution and is merely directory, but s 2 is mandatory.

It is clear from the preamble of COGSA that the Rules in the Schedule have the force of law. A perusal of art 3.6 of the Schedule makes it clear that it was enacted to limit the liability of the carrier, and that the provisions made under the Schedule were made in the public Interest. The clear public interest is to put both the carriers of goods and their owners on notice about their respective liabilities and rights. Those respective liabilities and rights, having been statutorily fixed, are not negotiable and cannot be altered on the basis of any different intention in the bill of lading, in respect of carriage to which s 2 applies. By a mere incorporation of the terms of art 3.6 of the Schedule to COGSA in the bill of lading, those clauses, which otherwise have the force of law, do not become mere contractual terms. Apart from that, cl 2 of the bill of lading, which is known as the paramount clause, expressly provides that the bill of lading 'shall have effect subject to the provision of Articles I to VIII Inclusive of the Article of International Convention for the unification of certain Rules relating to Bills of Lading at Brussels of August 25, 1924 (hereinafter called the Hague Rules)'. In East & West Steamship Co v Chettiar [1960] AIR 1058, the Supreme Court interpreted art 3.6 and held that it completely extinguishes the liability of the carrier, and is not merely a case of limitation.