The Hague-Visby Rules: Package Limitation for Containerised Cargoes

The Hague-Visby Rules: Package Limitation for Containerised Cargoes

In a legal first, the UK’s High Court has considered the issue of package limitation for containerised cargoes under the Hague-Visby Rules, and how they apply where waybills were issued1. The specialist shipping and maritime lawyers at Bahamas law firm Parris Whittaker are highly experienced in successfully acting for shipping clients involving shipping contracts and disputes.

What’s the background?

The claimant company was the receiver of three container loads of frozen tuna, shipped at Cartagena in Spain for carriage by the defendant (Maersk Line) to Japan.  However, these were damaged - having been stuffed into the containers as individual items of cargo with no wrapping, packaging or consolidation, and as individual bags.

The defendant had received the containers at Cartagena under a contract of carriage incorporating its terms which included an implied term entitling the shippers to the issue of a bill of lading.  However, none was issued, and the defendant provided to the claimant a draft, straight consigned bill of lading. The claimant later requested (and the defendant agreed) an alteration to the destination of two of the containers which required onward carriage by road.

The parties agreed to issue sea waybills to prevent further delays.  On receiving the containers, the claimant claimed that the tuna in all three containers was damaged through raised temperatures during carriage and/or rough handling during re-stuffing into the replacement container. It brought proceedings against the defendant.

What were the issues?

There were a number of issues relating to limitation of liability in the context of the Hague Rules and and Hague-Visby Rules.  The Court also had to consider whether the ‘package or unit’ limit was truly a limit ‘per package or unit.’

The Court ruled that the contracts of carriage were covered by a bill of lading by reason of the shipper’s right to demand a bill of lading. The fact that waybills were issued instead made no difference.  The Hague-Visby Rules therefore applied compulsorily, and liability was, therefore, limited by Article IV rule 5 of the Hague-Visby Rules. 

The Court also ruled:

  • the meaning of the ‘package or unit’ limit under Article IV r 5 of the Hague-Visby Rules is that there is a separate limit for each package or unit (with no difference in the meaning of ‘package or unit’ between the two sets of Rules. The frozen bags of tuna parts were to be classed as a separate ‘package,’ and that the individual frozen loins were ‘units’
  • As for aggregation of the limit of liability, the court ruled that the meaning of ‘per package or unit’ was that a separate limit was applicable in respect of each package or unit; the limit was not in the aggregate.

What does this mean?

The case provides useful clarification on what amount to units and packaging in the context of package limitation for containerised cargoes.  Importantly, even if the contract of carriage is documented with a waybill instead of a bill of lading, the Hague-Visby Rules will still apply compulsorily.

How can we help?

We advise and represent shipping and maritime clients with shipping and other commercial disputes. If you have a potential claim or need to defend a claim against you, or you have any other concerns about your shipping and maritime contractual relationships, contact the expert shipping lawyers at ParrisWhittaker for strategic advice and representation.

1 Kyokuyo Co Ltd v A.P Moller - Maersk AS 2017 EWHC 654