This was an appeal under s 69(2)(b) of the Arbitration Act 1996 against the award of an Arbitral Tribunal dated 1 September 2021. FIMBank plc (FIMBank) claimed as the holder of bills of lading for misdelivery of cargo against KCH Shipping Co Ltd (KCH) as carrier. The issue was whether the limitation of actions in art 3.6 of the Hague-Visby Rules applied to misdelivery claims after discharge from the vessel. That question was left open in Deep Sea Maritime Ltd v Monjasa A/S (The Alhani) [2018] 2 Lloyd’s Rep 563 [86] (CMI154). Here, FIMBank served its notice of arbitration on KCH on 24 April 2020, which was more than one year after delivery of the goods or the date when they should have been delivered. If the art 3.6 time bar did not apply to misdelivery after discharge, the arbitration revived to determine, among other things, whether delivery did indeed take place after the end of the discharge operation. If it did, the claim was time-barred, and FIMBank must bear the loss.

The Arbitral Tribunal found that: (i) the Hague-Visby Rules time bar can in principle apply to claims relating to misdelivery occurring after discharge; and (ii) cl 2(c) of the Congenbill form did not disapply the Hague-Visby Rules time bar to the period after discharge. Accordingly, since there had not been the bringing of a 'suit' within the meaning of art 3.6 within the time period allowed, FIMBank’s claim was time-barred, irrespective of whether delivery did occur after discharge as a matter of fact.

Held: Appeal dismissed.

It is common ground that the term 'delivery' is only mentioned in the Rules in art 3.6, which deals with prima facie evidence of delivery as well as the time bar. It is the version of art 3.6 in the Hague-Visby Rules, a 1968 revision of the Hague Rules, which is at issue here. To see them side by side, the original 1924 version reads: '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 1968 revision reads somewhat differently: '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'.

A potentially important issue is whether the revision was intended to clarify the position regarding delivery. The position on the travaux préparatoires was not explored in detail at the hearing, but Judge Diamond (then Anthony Diamond QC) expressed the view that the sole or main purpose of the substitution of the words 'discharged from all liability whatsoever in respect of the goods' for the words 'discharged from all liability in respect of loss or damage' was to make the time limit apply where the goods had been delivered without production of bills of lading and so make it unnecessary to require an indemnity given by the receiver to be kept open indefinitely. If correct, this has obvious implications for the applicability of the time bar post-discharge, and in fact Judge Diamond goes on to 'submit, albeit with considerable doubt, that as the first paragraph of art. III, r.6 is dealing with the effect of delivery of goods, so also the time bar should be construed as applying to events taking place after discharge. If so, I submit, again with doubt, that the limit should apply.' However, not all commentators take the same view of the travaux préparatoires.

The background to the Hague Rules has recently been fully explained in The Alhani. At [49] Foxton J, cites the judgment of Judge Diamond QC, a 'noted expert on the Hague and Hague-Visby Rules', in Transworld Oil (USA) Inc v Minos Compania Naviera SA (The Leni) [1992] 2 Lloyd's Rep. 48, 53:

There were a number of objectives which art. III, r. 6 sought to achieve; first, to speed up the settlement of claims and to provide carriers with some protection against stale and therefore unverifiable claims; second, to achieve international uniformity in relation to prescription periods; third, to prevent carriers from relying on 'notice-of-claim' provisions as an absolute bar to proceedings or from inserting clauses in their bills of lading requiring proceedings to be issued within short periods of less than one year ...

It is clear that a balance was sought to be achieved between the interests of carriers and cargo interests in this respect, though no doubt reflecting the balance of power between the negotiating parties. In Compania Portorafti Commerciale SA v Ultramar Panama Inc (The Captain Gregos) [1990] 1 Lloyd's Rep 310, 315, Bingham LJ, when considering art 3.6, authoritatively stated its objective, saying that it is 'like any time bar, intended to achieve finality and, in this case, enable the ship owner to clear his books'. There is no dispute that this is its purpose.

This case is concerned with the interpretation of an international Convention. Uniform interpretation by courts in different jurisdictions is important, particularly if there is shown to be a consensus among national courts. Regard should therefore be had as to how it has been interpreted by courts of different countries: see Nautical Challenge Ltd v Evergreen Marine (UK) Ltd [2021] UKSC 6 [42]; Alize 1954 v Allianz Elementar Versicherungs AG [2021] UKSC 51 [42] (CMI1619)). The view of other Common Law courts applying the same provisions is of considerable persuasive effect in ascertaining English law on the same subject, all the more so if they speak with a single voice. However, there is limited examination in these cases of the issue that arises for decision here, namely the assumption that the temporal operation of art 3.6 necessarily corresponds with the 'period of responsibility' as defined by the other provisions of the Rules. This issue was, however, raised squarely in the New South Wales Court of Appeal in China Ocean Shipping Co Ltd v PS Chellaram & Co Ltd (The Zhi Jiang Kou) (1990) 28 NSWLR 354, [1991] 1 Lloyd's Rep 493. Kirby P (515-517) considered that the suggestion that the Hague Rules, and in particular the time bar, have no application to events occurring after the goods go over the ship’s rail and are discharged is unlikely, given the purpose of the Rules. He considered that it was inherent in the decision of the Court of Appeal in The Captain Gregos that the Hague Rules do not establish a category limited to events arising from loading to discharge, strictly so confined, but include custody and care, loading and handling, as well as the carriage and discharge of the goods. 'Custody and care' are apt to cover events after the discharge and until delivery of the goods. He took this approach to be inherent in the decision of the Court of Appeal and accepted by a unanimous decision of the Supreme Court of Canada in Falconbridge Nickel Mines Ltd v Chimo Shipping Mines Ltd [1973] 2 Lloyd’s Rep 469, 471 (CMI942). That case goes a considerable way to show that KCH is right to say that an international consensus is not made out. However, the balance of the Common Law authority that FIMBank cites, whilst not determinative, is supportive of its case. Further, looking at the academic literature in the round, the position does not seem to be settled - views clearly differ among commentators, some remain neutral, and there are clear recognitions of the convenience of treating the time bar as applicable after discharge. The commentary does not make good the proposition that there is a clear and settled view.

This was a particularly well constituted Arbitral Tribunal – consisting of a former commercial court Judge and the authors of two of the leading textbooks – to consider how this undecided point should be resolved, putting it in its commercial and legal context. The Tribunal was correct to decide that on its true construction art 3.6 of the Hague-Visby Rules, which includes the time bar but is concerned with delivery in a broader context, applies to claims for misdelivery of cargo after discharge, a conclusion which avoids the necessity for fine distinctions as to the point at which discharge ends, and which is consistent with the authoritative statement of the objective of the article by Bingham LJ in The Captain Gregos. There is no consensus to the contrary among the courts of other jurisdictions, and there is no clear and settled view to the contrary in the commentary, where support can be found for both conclusions.

In any case, the Tribunal was correct in deciding that the same result can be reached by the implication of a term, as was recognised by the Court of Appeal in The MSC Amsterdam [2007] 2 Lloyd's Rep 622 (CMI36) as a possibility, dependent on the terms of the contract as a whole. Clause 2(c) of the bills of lading in the present case does not disapply the Hague-Visby Rules to the period after discharge, and the terms of the bills of lading in The MSC Amsterdam, which led to a different result in that case, were materially different from those in the present case.

[For the unsuccessful appeal to the Court of Appeal, see FIMBank PLC v KCH Shipping Co Ltd [2023] EWCA Civ 569 (CMI2192).]