Hércules Hispano SA de Seguros (the plaintiff), an insurance company acting under an assignment of rights, claimed for damage to cargo carried from Guatemala to Spain, against the carrier, Sea Land Services Inc. The first instance Court dismissed the claim, stating that the plaintiff did not comply with the notification within the time to file the action. This is a condition stated in the Code of Commerce of Spain (CCom). The plaintiff appealed the decision, arguing the application of the Hague-Visby Rules to the claim. The Court of Appeal affirmed the decision of the first instance Court, stating that the CCom should apply, and not the Hague-Visby Rules, as the cargo was loaded in Guatemala, which had not ratified the Rules. The plaintiff recurred this decision in cassation before the Tribunal Supremo/Supreme Court (SC), alleging an infraction of art 10 of the Hague-Visby Rules. The plaintiff argued the infraction to art 10 of the Hague-Visby Rules as the bill of lading contained a paramount clause providing the application of the Rules.

Held: The SC affirmed the decision. The SC stated that Spain has two governing regimes for the contract of carriage of goods by sea. One is contained in the CCom, the other is contained in the Law on Carriage of Goods by Sea of 22 December 1949 (LCGS 1949), which introduced the Hague Rules into the Spanish legal system with some modifications. This law was amended by the Protocol of 23 January 1968 (Visby Protocol) and by the Protocol of 21 December 1979 (SDR Protocol). A paramount clause has been expressly admitted by the case law of the SC. However, in this case, the plaintiff alleged in the lawsuit that the clauses contained in the bill of lading were not applicable to the claim. Therefore, the SC found, the plaintiff cannot rely on a clause the application of which it had previously denied. That made the CCom applicable to the claim and the Court of Appeal's decision was affirmed.