The plaintiff was a small-scale Hong Kong garment factory. Goldentex Ltd (Zhuofang) was its client in Taiwan. On 20 August 1995, Zhuofang entered into an agreement with the plaintiff to purchase a batch of its garments at a price of USD 68,729.05. On 19 October 1995, Zhuofang instructed the plaintiff to entrust the transport of these goods to the defendant freight forwarder for delivery to Bronze Lion in Moscow. The defendant subsequently contracted with China International Freight Forwarders (HK) Co Ltd (CIF) to transport the goods to Hamburg by sea, and then with the Magnum company from Hamburg to Moscow. The plaintiff had to arrange for the goods to be delivered from its factory to the deck of the cargo ship in Hong Kong. The defendant issued the relevant FOB bill to the plaintiff. The freight was HKD 4,228.44. On 20 October 1995, the plaintiff paid the freight to the defendant. The defendant issued the manifest, signed and sealed by CIF, and an original bill of lading in triplicate.

On 1 January 1996, the plaintiff inquired about the whereabouts of the goods with Zhuofang and the defendant, but to no avail. Zhuofang faxed the defendant, saying that it had compromised with the customer and had to return all the goods to Hong Kong. Zhuofang did not explain why. The defendant also discussed with the plaintiff that if the plaintiff paid TWD 120,708 for the one-way freight from Hong Kong to Moscow, the defendant would return the goods to the plaintiff. The defendant faxed the following documents to the plaintiff at that time:

(1) A shipping receipt for the voyage paid by Zhuofang;

(2) Shipping records for Zhuofang; and

(3) Zhuofang's bill of lading for the goods, issued by CIF in Taiwan.

The plaintiff then realised that CIF had issued another set of original bills of lading to Zhuofang, allowing Zhuofang or its consignee to collect the goods secretly.

On 22 May 1997, Harry Muller, the successor of Magnum, faxed the plaintiff, claiming that the goods involved had been auctioned off by the owner of the warehouse at the end of 1996 to compensate for the warehouse rent. Due to the poor quality of the goods, the sale price did not cover the warehouse rent, and Harry Muller could not provide further details.

The defendant argued, among other things, that the plaintiff had exceeded the time limit specified in the bill of lading; and that, as merely the agent of CIF, the defendant was not responsible for the whereabouts of the goods.

Held: Judgment for the plaintiff. The defendant is ordered to pay the plaintiff USD 68,729.05 plus interest.

The defendant invoked the clause in the bill of lading, claiming that the plaintiff cannot enjoy the 6-year time limit generally given by law. The Court does not agree with this statement, because the terms on the bill of lading stated that it only applied to CIF. The defendant was never mentioned, and the defendant could not be related to the bill of lading.

In particular, the defendant invoked cl 8 of the bill of lading which provides as follows:

The Hague Rules contained in the international Convention for the unification of certain rules relating to Bills of Lading dated Brussels 25th August 1924 or in those countries where the Hague-Visby Rules contained in the protocol of Brussels dated 23rd February 1968 are in force, as enacted in the country of Shipment shall apply to all carriage of goods by sea, where no mandatory international or national law applies to the carriage of goods by sea, and where no mandatory international or national law also applies to the carriage of goods by inland waterways, and such provisions shall apply to all goods whether carried on deck or below deck.

The defendant further invoked arts 3.6, 4 bis.1 and 4 bis.2 of the Hague-Visby rules, which meant that the plaintiff must file a petition within one year after the goods in question arrived in Moscow, and any claim brought after this period was invalid.

This case involved sea transportation from Hong Kong to Hamburg and land transportation from Hamburg to Moscow. The Hague-Visby Rules only apply to sea transportation. Their coverage can only be extended to the limited distance from the Hamburg terminal to the warehouse; the land transportation distance from Hamburg to Moscow is calculated in thousands of miles, so the Hague-Visby Rules do not apply to this case.

The defendant also contends that the time limit specified in cl 21 of the bill of lading has been exceeded by the time of the plaintiff's filing as follows:

TIME BAR

The Freight Forwarder shall be discharged of all liability under the rules of these Conditions unless suit is brought within nine months after

(i) the delivery of the goods, or

(ii) the date when the goods should have been delivered, or

(iii) the date when in accordance with Clause 20, failure to deliver the goods would, in the absence of evidence to the contrary, give to the party entitled to receive delivery the right to treat the goods as lost. (Emphasis added.)

Clause 20 of the bill of lading reads as follows:

NON DELIVERY

Failure to effect delivery within 90 days after the expiry of a time limit expressed in the Combined Transport Bill of Lading or where no time limit is agreed and so expressed, failure to offer delivery within 90 days after the time it would be reasonable to allow for diligent completion of the combined transport operation shall, in the absence of evidence to the contrary, give the party entitled to receive delivery the right to treat the goods as lost. (Emphasis added.)

First of all, the goods left the port on 19 October 1995. The defendant never knew when the goods in question arrived at the warehouse in Moscow. In the Court's opinion, cl 21(i) of the bill of lading does not apply.

Secondly, no-one has predicted the arrival of the goods. In the Court's opinion, cl 21(ii) of the bill of lading does not apply.

Finally, the defendant never refused to deliver the goods ('failure to deliver'), but the consignee did not come to pick up the goods. Clause 21(iii) of the bill of lading only applies to a time limit of 90 days after the warehouse refuses to deliver, so this clause does not apply.

Since the bill of lading does not set a time limit for the circumstances applicable to this case, the plaintiff can file a claim within six years after the incident according to law. The plaintiff's claim is therefore not time-barred.

The two witnesses of the plaintiff pointed out that when they approached the defendant, the defendant never said that it was only an agent of CIF, and the defendant issued the loading slip in its own name on 10 October 1995. On 20 October 1995, the bill of lading was issued by the defendant to the plaintiff. They always regarded CIF as a company that carried out the defendant's shipment. The Court is satisfied with their testimony. The defendant chose CIF to carry out the shipment after it had reached an oral carriage contract with the defendant. As for the plaintiff, it did not care who the defendant entrusted to carry out the delivery.