Senior Associate London
"Where the Hague Rules apply only as a matter of contract, the parties are able to modify them."
Introduction
Following an application for summary judgment, the Commercial Court has provided useful guidance on the interaction between the Hague Rules time bar and contractual time bars where the Hague Rules were incorporated by a clause paramount, rather than applying by force of law. Emirates Shipping Line FZE (the ”Defendant”) sought to argue that the claim by cargo interests became time-barred as a result of contractual provisions providing for a 20 day time bar and a clause that required the claim form to have been served, not just issued, within one year.
This decision in Tanga Pharmaceutical Plastics Limited and others v Emirates Shipping Line FZE [2025] EWHC 368 (Comm) is a useful reminder that where claims are governed by Hague Rules, the one-year time bar in Article III, rule 6 will prevail over any inconsistent provisions.
Factual Background
Tanga Pharmaceutical Plastics Limited and others (the “Claimants”) were the cargo owners of 548 containers on board the MV “Alion” (the “Vessel”). The containers were shipped from India, the UAE and Saudi Arabia to Mombasa, Kenya under bills of lading (“Bills of Lading”) issued by the Defendant, who was the charterer of the Vessel. The Hague Rules applied as a matter of contract by way of clause paramount. The Bills of Lading were governed by English law and subject to English jurisdiction.
En route, the Vessel suffered an engine breakdown. Salvors were engaged and general average was declared. The cargo was discharged in Mombasa against the provision of salvage and general average security. The settlement agreement between the Claimants and the salvors was concluded the following year.
Various extensions of time for issuing proceedings were granted to the Claimants by the Defendant. A claim form was issued four days before expiry of the time bar against the Defendant under the Bills of Lading asserting claims related to the settlement agreement with the salvors and particular average costs and expenses. The claim form was served 13 months later.
Article III, rule 8 of the Hague Rules provides that any provision in the bill of lading that relieves the carrier from liability other than in accordance with Article III or that lessens the carrier’s liability other than as provided in the Rules will be null and void and of no effect.
Further, the Bills of Lading included clause 18 which provided:
“Any claim against the Carrier for any adjustment….or any claim other than for loss or damage to Goods must be submitted fully documented to the Carrier or its agents in writing within 20 days from the day when the Goods were or should have been delivered, failing which such claim will be time-barred” (the “20-Day Provision”)
[…]
Suit shall not be considered to have been brought within time specified unless process shall have been actually served and/or jurisdiction obtained over the Vessel or Carrier within such time.”
(the “Service Provision”)
The Defendant applied for summary judgment alleging that the claim was time-barred under clause 18. The court had to consider whether clause 18 prevailed over the Hague Rules.
"It was to have its usual effect, namely as an incorporated repugnancy clause."
The Court’s Decision
It was common ground that where the Hague Rules apply only as a matter of contract, the parties are able to modify them and that clear words would be required to depart from the provisions of Article III, rule 6.
The court took the view that clause 18 did not prevail over Article III, rules 6 and 8. The judge gave the following reasons [par. 36 – 41]:
- A “paramount clause” is a very familiar term in the shipping industry. It intends to have the effect of incorporating the Hague Rules into the contract of carriage and to override any inconsistent exemption or condition.
- Clause 2 deliberately does not incorporate the entire Hague Rules but omits Article IX. Had the parties intended for clause 18 to prevail over Articles III, rules 6 and 8 they could have agreed to exclude them. That was not done.
- Since clause 2 did not merely incorporate Article III, rule 8 in general terms but added a particular exclusion. The implication of this addition was that outside the specifically identified excluded circumstance, Article III, rule 8 was to prevail and it was to have its usual effect, namely as an incorporated repugnancy clause.
- Clause 18 does not contain a clear indication that it is intended to prevail over clause 2. Since the Claimants would have to relinquish rights under Article III, rules 6 and 8, this should have been made explicit.
The 20-Day Provision
Although the judge did not have to decide on this point, he said that such provision was null and void given the incorporated Hague Rules. The claim for payment to the salvors was to be regarded as a claim for loss or damage to goods (by analogy with Trafigura Pte Ltd v TKK Shipping Pte Ltd (The Thorco Lineage) [2023] 2 Lloyd’s Rep 338).
"Other events unlikely to occur within a year, such as pigs flying or England winning the World Cup."
The Service Provision
The judge rejected an argument that the Service Provision did not fall foul of Article III Rule 8 because it does not lessen the carrier’s liability. He said that if this argument was correct, there was nothing to stop the contract stipulating for other events unlikely to occur within a year, such as pigs flying or England winning the World Cup. Further, the judge said that the Service Provision could not relieve the Defendant from liability because the contract was governed by English law and under English law, a suit is brought when the claim form is issued. The parties do not forego valuable rights without it being made clear that this was their intention (see MUR Shipping v RTI Ltd [2024] UKSC 18).
Key takeaways
The clause paramount is widely used in the maritime industry. This judgment is a useful
"It must be clear to all parties."
reminder that even where the Hague Rules apply as a matter of a contract, clear words will be required to depart from their effect and it must be clear to all parties. If parties are to forego the rights under Article III rules 6 and 8, clear wording evidencing this intention would be required.
In terms of drafting, parties must bear in mind that the contract will be interpreted as a whole and so a considered approach must be taken to ensure that time limits are not misconstrued. And as the judge said: “it is highly significant that clause 2 is entitled “CLAUSE PARAMOUNT”.
London Trainee Mike Gorry also contributed to this article.
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Senior Associate London
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