The UK Supreme Court has confirmed that the time limitation provision under Article III, Rule 6 of the Hague-Visby Rules applies to claims involving wrongful delivery of cargo, even where such delivery occurs after discharge from the vessel. This has significant implications for carriers and cargo interests in determining the time period within which claims must be brought. 

Previously, we reported on the English Court of Appeal’s decision holding that the one-year time bar in Article III, Rule 6 of the Hague-Visby Rules applied even where the cargo had been wrongfully delivered long after discharge. This ruling has now been affirmed by the UK Supreme Court in Fimbank PLC and KCH Shipping Co Limited ("Giant Ace") [2024] UKSC 38. 

The core issue was whether the limitation period continued to apply in cases involving misdelivery occurring after the discharge of cargo. The Supreme Court concluded that it does, cementing an interpretation that expands the practical scope of the Hague-Visby Rules in modern shipping operations. 

In the judgment delivered by Lord Hamblen, with whom Lords Hodge, Sales, Leggatt, and Richards agreed, reference was made to the Privy Council appeal decision from Australia in the case of Port Jackson Stevedoring Pty Ltd v Salmond and Spraggon (Australia) Pty Ltd (The New York Star) [1981] 1 WLR 138, in which the contractual time bar, in materially the same terms as that in Article III, Rule 6, was held to apply to goods that had been wrongfully delivered to thieves without the production of the bill of lading after they had been discharged from the vessel. 

Lord Hamblen referred to the decision of Lord Wilberforce in that case, in which his Lordship had said that the parties' contract "must be interpreted in the light of the practice that consignees rarely take delivery of goods at the ship's rail but will normally collect them after some period of storage on or near the wharf." 

The Supreme Court relied on that decision, although the Hague Rules period of responsibility was not involved, as it demonstrated "that the wording of Article III, Rule 6 is apt to cover post-discharge misdelivery claims, and indeed that this is the paradigm case of misdelivery." 

It is of interest to Australian practitioners that the successful leading counsel in The New York Star case was AM Gleeson QC, as he then was. The UK Supreme Court also went on to consider several other Australian authorities on this point, which we referred to in our earlier case note and which were also considered by the English Court of Appeal.

These decisions were recently discussed at a mini-conference of the NSW Branch of the Maritime Law Association of Australia and New Zealand by Matthew Harvey KC of the Victorian Bar. He noted a divergence of opinion between the Supreme Courts of Queensland and Victoria on the one hand, and New South Wales on the other. The decision of the Supreme Court of the United Kingdom endorses the position adopted by the New South Wales Court of Appeal in PS Chellaram & Co Ltd v China Ocean Shipping Co (The Zhi Jiang Kou) [1991] 1 Lloyd's Rep 493, where Gleeson CJ and Kirby P rejected the submission that Article 3, Rule 6 did not apply to events occurring after discharge, referring to the "very wide language" of the provision and the practical implications of construing it otherwise.

Hamblen J cited the reasons given by Kirby P and agreed with them. Kirby P concluded his judgment by stating:

"I should prefer to adopt the construction which gives the Hague Rules a sensible operation which does not artificially terminate their effect at the ship’s rail."

Should you wish to discuss this matter further or explore similar issues, please feel free to contact our Transport & Logistics team.