Construing The 'Deck Cargo' Exception For The Purposes Of The Hague-Visby Rules

Sideridraulic Systems SpA and Anor v BBC Chartering and Logistic GmbH & Co KG (m/v BBC Greenland) [2011] EWHC 3106 (Comm)

In this case, the Commercial Court considered whether or not a cargo carried on a ship's deck should be considered a "deck cargo" for the purposes of the Hague-Visby Rules ("the Rules"), such that the carriage of this cargo fell outside the ambit of the Rules.

The background facts

The dispute concerned the carriage of ten sand filter tanks on board the m/v BBC Greenland ("the Vessel") from Italy to the US. The claimants were the cargo interests and the defendants were the contractual carriers and issuers of the bill of lading. During the voyage, one of the tanks was lost and another damaged. The defendants instituted proceedings in the US seeking a declaration that they were not liable to the claimants or, alternatively, that their liability was limited to US$1,000 (or US$500 per package), on the basis that the United States Carriage of Goods by Sea Act 1936 ("COGSA 1936") was applicable to the contract of carriage.

The claimants denied that COGSA 1936 was applicable and sought an anti-suit injunction restraining the defendants from continuing the US proceedings on the basis that they were being prosecuted in breach of an arbitration agreement in the bill of lading.

The case came before the Commercial Court in the context of the defendants' application to set aside an earlier order granting the claimants permission to serve the application for an anti-suit injunction out of the jurisdiction. The defendants also sought an order that the English courts had no jurisdiction in respect of the claim.

The key issue between the parties was whether or not the carriage was subject to the Rules. The defendants contended that it was not because the tanks were deck cargo, that is to say "cargo which by the contract of carriage is stated as being carried on deck and is so carried". The importance of this point was that if the tanks were deck cargo, then they were not "goods" within the definition of the Rules. If that were the case ,then it would follow that the bill of lading did not relate to the "carriage of goods" and the Rules would not be applicable.

The relevant provisions of the contract of carriage

The fixture recap confirming the contract of carriage contained a provision giving the defendants liberty to carry the tanks as deck cargo in the following terms: "The shipment under/on deck in Owners' option, deck cargo at...