Hapag-Lloyd Container Line GmbH (the plaintiff) contracted with Moo Transport & Commodities Inc (the defendant) for the shipments of seventeen containers of beef lungs and hearts from various ports in the United States to Indonesia.

All 17 containers were originally destined to travel from the United States to Indonesia. The Indonesian government placed a ban on the importation of US beef products while the containers were in the process of being shipped. Fourteen of the 17 containers were detained by the Indonesian authorities at the port in Jakarta. Accordingly, the cargo could not be released to the respective consignees, and the containers were forced to remain at the Indonesian terminal. The remaining three containers were stopped in Singapore on the instructions of the defendant before the plaintiff's feeder line from Singapore could deliver them to Jakarta. Nine of the 17 containers detained at the port of Jakarta were released from the terminal in September 2004 when a new purchaser for the contents of those containers was found in Indonesia. The contents of the five remaining containers in Jakarta and of the three containers in Singapore were ultimately destroyed.

The plaintiff claimed against the defendant for terminal and demurrage charges. The defendant counterclaimed against the plaintiff for its losses arising from the shipment of the containers. The plaintiff argued that the defendant's counterclaim was time-barred by the terms of the bill of lading.

Held: The plaintiff's claim was allowed; the defendant's counterclaim was dismissed.

Although the bill of lading provided for the application of the Hague-Visby Rules to the contract of carriage, it was common ground that since the Rules only covered the period from 'tackle to tackle' (ie from the time the goods cross the ship's rail at the loading port to the time of discharge), it was the terms in the bill of lading itself which must govern.

Clause 6 of the bill of lading provided that '[i]n any event, the Carrier shall be discharged from all liability in respect of loss of or damage to the Goods, non-delivery, mis-delivery, delay or any other loss or damage connected or related to the Carriage unless suit is brought within one (1) year after delivery of the Goods or the date when the Goods should have been delivered'.

The law was clear that cl 6 of the bill of lading was not a mere prescription period or limitation of the right of action but was rather an exclusion or forfeiture of any right or cause of action. The reference to the delivery of the goods showed clearly that the clause was directed towards the carrier's obligations as bailee of the goods. It could not be supposed that it admitted of a distinction between obligations in contract and liability in tort; 'all liability' meant what it said. Moreover, it was quite unreal to equate this clause with those provisions in the contract related to performance. It was a clause which came into operation when the contractual performance had become impossible or had been given up; then, it regulated the manner in which liability for breach of contract was to be established.

The starting point for the running of the time limit stipulated in cl 6 was the time when the goods were delivered or should have been delivered. The eight containers in issue were offloaded in Jakarta or Singapore on dates between 20 May and 27 May 2004. The grace period for a consignee to take delivery was five days in Jakarta and nine days in Singapore. Assuming that this grace period could be applied to extend the time of the carrier's obligation to deliver rather than to the consignee’s obligation to accept such delivery, this would place the latest possible date at which delivery should have taken place on 5 June 2004. That fact was known to the defendant, and that was when it could and should have claimed for non-delivery. However, the defendant's counterclaim was filed on 24 June 2005, almost three weeks after the expiry of the one year period, and was therefore time-barred.