pi_circular Insurance & claimsCargo risk Skuld
In a recent judgement by the English House of Lords* it was decided that the carriers’ liability in respect of delivery of cargo under a non-negotiable (straight) bill of lading should by treated as a “document of title” and be subject to the English Hague-Visby Rules. Background The vessel RAFAELA S carried a cargo of printing machinery from South Africa to the US via the English port of Felixstowe. The cargo was subsequently damaged during the voyage from England to the US. Proceedings were commenced in England by cargo interests, and the real issue for the parties was whether the package limitation in the Hague-Visby Rules as incorporated into English law applied, or whether the carrier could rely on the lower limits as applied in the US. The cargo was carried under the carrier’s own bill of lading that named the consignee in the consignee box, and furthermore contained a clause which expressly required presentation for delivery. The arbitrators and the Court of first instance found in favour of the carrier, following the traditional view that where a straight bill of lading is made out to a named consignee such a bill of lading is not “a bill of lading or any similar document of title”. This Decision was reversed by the Court of Appeal. It concluded that although the relevant bill of lading was non-negotiable, i.e. not to order but “straight”, it was nevertheless a document of title and as a result subject to the Hague-Visby Rules incorporated into English law. This meant that the carriers’ liability was subject to the higher package and unit limitation of the Hague-Visby Rules as applied under English law. Consequently, a higher limitation regime in the region of USD 150,000 was applicable as opposed to the position in the US restricting the claim to USD 2,000. For a detailed analysis of the Court of Appeal decision please refer to SKULD’s Legal News 27.05-2003: “Delivery under straight or non-negotiable bills should they still be in use?” by Sa
M/V RAFAELA S – to be or not to be “a bill of lading or any similar document of title”
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