09-07-2018

Groundbreaking Commercial Court Ruling Establishes Hague Rules Time Limit Applies to Misdelivery Claims

Deep Sea Maritime Ltd v Monjasa A/S (The Alhani) [2018] EWHC 1495 (Comm)
 
In an important new judgment the English Commercial Court has held that the Hague Rules 1 year time limit for commencing proceedings applies to claims for the misdelivery of cargo.  The Court also confirmed that proceedings brought in the wrong jurisdiction will not interrupt time.
 
The facts of the case were that a bunker fuel cargo was discharged without production of the original Bills of Lading.  The cargo was delivered to the wrong party and the cargo owners, Monjasa, brought proceedings against the Ship Owners in various jurisdictions claiming damages for misdelivery.  
 
The Bills of Lading incorporated the Hague Rules and contained an exclusive English Jurisdiction clause.  
 
Although proceedings were brought in various foreign jurisdictions, none were issued in the English Court within 1 year of the misdelivery of the cargo.  The Ship Owners therefore contended that Monjasa's claim was time barred under Article 3(6) of the Hague Rules.  
 
The Court held that Article 3(6) of the Hague Rules was sufficiently widely worded to cover claims for misdelivery, and consequently that any claim for misdelivery must be brought within 1 year.   
 
The Court also confirmed that proceedings brought in another country in breach of an exclusive English jurisdiction clause will not interrupt the running of the 1 year limitation period.
 
For these reasons the Court held that Monjasa's claim against the Ship Owners was time barred.    
 
This will be a welcome decision for ship owners.  For consignees it underscores the importance of commencing proceedings promptly and in the correct jurisdiction.  

Source: David Morriss / HFW

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