Bull's-eye! The Hague-Visby Rules Time Bar Applies To Post-Discharge Misdelivery

• Jurisdiction: European Union
• Law Firm: Quadrant Chambers
• Subject Matter: Transport, Marine/ Shipping
• Author: Mr Simon Rainey KC
• Published date: 28 May 2023

self

FIMBank p.l.c. v KCH Shipping Co. Ltd (The Giant Ace) [2023] EWCA Civ 569

Overview

The Court of Appeal (Males; Popplewell and Nugee LJJ) has today handed down judgment in FIMBank p.l.c. v KCH Shipping Co. (The Giant Ace), which started life as an appeal under section 69 of the Arbitration Act 1996, confirming that the time bar in Article III rule 6 of the Hague-Visby Rules will apply to claims in relation to misdelivery after discharge.

The Court's decision upholds the previous decisions of the LMAA tribunal (Julia Dias KC, Sir Bernard Eder and Tim Young KC) and of the Commercial Court (Sir William Blair).

In so holding, the Court found that the travaux préparatoires to the Visby Protocol which amended, inter alia, the Hague Rules text of Article III, Rule 6 to give it very wide scope, gave a clear "bull's-eye" for the purposes of Article 32 of the Vienna Convention on Interpretation of Treaties and the English law threshold (see e.g. The Giannis NK [1998] AC 605) and made it clear that this was the intention of the drafters.

The decision confirms the closing of the "gap" left by the previous decision (on the Hague Rules) in The Alhani [2018] EWHC 1495 (Comm) in which it was held that misdelivery occurring before or simultaneously with discharge was covered by the Article III Rule 6 Hague Rules time bar but where the Court specifically left open the question of its application to misdelivery occurring after discharge.

Background

The appeal related to a claim brought by FIMBank p.l.c. ("FIMBank"), as the holder of bills of lading, for the alleged misdelivery of cargo by the contractual carrier, KCH Shipping Co., Ltd ("KCH"). The bills were concluded on the Congenbill form, and were subject to the Hague-Visby Rules, including the time bar in Article III r 6 of one year after delivery which applies to claims against carriers.

FIMBank served a Notice of Arbitration on KCH after that time bar expired. Its position was that its claim was nevertheless not caught by the time bar, contending that: (a) on the facts, delivery took place after discharge; and (b) as a matter of law, the time bar did not apply to claims for misdelivery occurring after discharge. In its submission, this was so given that the Hague-Visby Rules do not regulate a carrier's obligation to deliver cargo (as opposed to the carriage of goods by sea), and only relate to a 'period of responsibility' which ends with the discharge of cargo. FIMBank further argued that the parties had, in any...