The plaintiff entrusted three consignments of goods to the fourth defendant, NYK, for carriage from Pakistan to Bangkok, Thailand. The consignments were carried on the first defendant, the Asian Pollux, the second defendant, the Hyundai Sprinter, and the third defendant, the Hyundai Highway. The plaintiff claimed that NYK was the owner of these vessels. The fifth defendant, James Finlay Ltd, NYK's agent, issued three bills of lading for the consignments. The sixth defendant, the consignee, refused to take delivery of the consignments. The shipping documents were therefore never transmitted to the consignee. The ownership of the goods remained with the plaintiff. Negotiations with a subsequent buyer also failed. The plaintiff, through the fifth defendant, instructed NYK to arrange the re-export of the goods back to Pakistan. However, the goods were auctioned by the Thai customs authorities. The plaintiff claimed that it was never informed of the auction. The goods were auctioned on 30 June 2004. The plaintiff argued that this was the date from which to calculate limitation, as this was when it became known that the defendants had failed to deliver the goods.

The defendants denied any liability under the contract of affreightment. They contended that on discharge of the cargo at the Thai Port, the contract of affreightment stood accomplished. They denied that any concluded contract to reship the goods back to Pakistan was ever made. Further, NYK asserted that it was neither the owner as to the majority shares in any of the vessels, nor the charterer, as claimed by the plaintiff. It was merely the slot charterer and, as such, was not liable to the plaintiff on an action in rem. The defendants further argued that the cargo was discharged on 29 July 2003, 16 August 2003, and 23 August 2003 at the port of discharge, and the plaintiff's suit was filed on 9 October 2004. The limitation period was one year from the date of discharge. Therefore, the suit was barred by time on an application of art 3.6 of the Carriage of Goods by Sea Act 1925 (COGSA).

Held: The suit is in time and the Court has admiralty jurisdiction.

To answer the defendants' objection as to limitation one can do no better than refer to the interpretation placed by BZ Kaikaus J on art 3.6 of COGSA, speaking for the Full Bench in the leading case of Chowdhury v Muhammadi Steamship Co PLD 1961 SC 340, 344:

In accordance with this clause, a suit is to be filed within a year of the 'date when the goods should have been delivered'. These words obviously have reference to the time when it was the obligation of the carrier, in accordance with the terms of the contract, to deliver the goods, and this time has to be determined in accordance with the provisions of the Contract Act. A contract for the carriage of goods, being only a contract, is subject to provisions of the Contract Act, except to which there may exist some special provision. In accordance with the Contract Act, every contract has to be performed on the date which has been agreed by the parties and, in the absence of such a date, within a reasonable time. In the case of carriage of goods by sea, if there be in the contract a date fixed for delivery, that would be the terminus a qua for limitation. If on the other hand, there is no date fixed, a reasonable time would have to be ascertained, and that would depend upon the particular circumstances of a case. However, the matter does not end there: the time for performance of a contract is liable to be extended by the promise as provided in section 63 of the Contract Act. Section 63 runs: 'Every promisor may dispense with or remit wholly or in part the performance of the promisee made to him, or may extend the time for such performance or may accept instead of it any satisfaction which he thinks fit'.

This section does not say that the consent of the promisor is also needed for extension, but that is obviously essential for if the promisor was not prepared to give the performance at all, any extension would be meaningless. However, the consent need not be expressed and may be implied. Similarly, the extension by the promisee too may be only implied. The section will apply to a case where there is originally a date fixed for performance, as also to a case where no date has been fixed and the contract is to be performed within a reasonable time.

Therefore, in all cases of carriage of goods by sea the terminus a qua for limitation will be affected if the promisee agrees to have performance at a date later than that originally fixed or later than that which constitute a reasonable time. At the same time, it not even not necessary that this extension of time by the promisee should take place before the expiry of the date on which the contract was to be performed. For the utmost that could be urged in a case where there is extension after the expiry of the original period would be that that there was a fresh agreement rather than an extension and a fresh agreement for delivery would have no less effect than extension. If such fresh agreement be valid and binding it would give rise to a fresh cause of action and there would be a fresh terminus a qua for limitation when the carrier failed to perform the fresh agreement. There is no law which forbids fresh agreement as to time of performance in case of carriage of goods by sea and therefore, such an agreement would be binding and would constitute a new basis for calculation of period of limitation.

The principles enunciated above were reiterated in Central Insurance Co Ltd v Chittagong Steamship Corp Ltd PLD 1963 SC 633.

In this case, the cargo was never delivered, as it was in the defendant's warehouse. The correspondence shows that delivery was not made and, amidst reshipment negotiations, the notice of auction was issued on 18 March 2004; yet the defendants did not inform the plaintiff of the auction proceedings. The goods were eventually auctioned on 30 June 2004, which fact the plaintiff learned later. On 2 July 2004 the defendants informed of the auction of the goods. There is force in the plaintiff's contention that the defendants until the last minute continued to represent that they were making arrangements and efforts to re-export the goods to Pakistan. There is an allegation of fraud committed by the one of the consignee's employees, who, it is alleged, was mixed up with the auction purchase of the subject goods. Therefore, prima facie, at the best, the date of auction could be taken as the reckoning date to compute the limitation period of one year, on which date the defendant could be said to have failed to deliver.

Another aspect of the case as pleaded was that there was a fresh contract of carriage, and the defendants were arranging for reshipment when the goods were auctioned. The suit is also founded on the ground of breach of this contract for affreightment. The correspondence placed on record prima facie tends to support the contentions of the plaintiff. In the light of the above discussion, if not an express, then an implied contract, is clearly in sight. The plaintiff's suit was filed on 9 October 2004; the suit is prima facie within time.

As to the contention that the admiralty claim is not maintainable, as the fourth defendant was neither the owner nor charter of the vessel, it is however, not disputed that the fourth defendant claimed to be a slot charterer. The plaintiff has relied upon Mediterranean Shipping Co SA v Owners of Ship 'Tychi' [1999] EWCA Civ 1150, [1999] 2 Lloyd's Rep 11 to urge that a slot charterer is included in the definition of charterer. The defendants initially disputed this position, but later conceded. The admiralty jurisdiction under s 4(4) of the Admiralty Jurisdiction of High Courts Ordinance 1980 (the Ordinance) can be invoked by an action in rem against the offending ship or against a sister ship. A claim in personam lies where the person who would be liable on the claim was, when the cause of action arose, 'the owner or charterer of, or in possession or in control of, the ship'. The term 'charterer' has varied shades of meaning, and includes a voyage charterer, time charterer, sub-charterer, demise charterer, etc. There is no reason why a slot charterer would be excluded. A slot charterer is liable for all the consequences for the contract of carriage of goods as any charterer could be.

In CMA Nos 2233 and 2269 of 2004 the plaintiff seeks the arrest of the Hyundai Sprinter and the Hyundai Highway. There is no dispute that these vessels were under a slot charter of the the fourth defendant, NYK. As held above, the slot charter is equally liable as a charterer. Accordingly, the orders of arrest made on 3 November 2004 and 10 November 2004 respectively are confirmed.

[For the unsuccessful appeal, see Nippon Yusen Kaisha (NYK) Lines v MSC Textiles (Pvt) Ltd 2008 PLD 244 (CMI1672).]