When delivery without production of the Bill of Lading goes wrong, it can raise several issues – sometimes it includes fraud or a claim under an LOI – or here, a misfired attempt to meet the time bar.
The English decision in the “ALHANI”, (Deep Sea Maritime v Monjasa  EWHC 1495 (Comm)) involved an STS transfer off Lome and resulted in new rulings on Hague Rules time bar for misdelivery claims, particularly whether the time bar is protected by proceedings other than where the contract says.
Within a matrix of alleged retention of title and purported sale back to the shippers, delivery took place without production of a Bill of Lading dated 12 November 2011. This B/L was for carriage of about 4,300 tonnes of bunker fuel from Togo to Benin, contractually incorporated the Hague Rules and was subject to an English law and jurisdiction clause.
Before starting their English action several years after delivery, the shippers had brought (i) arrest and substantive proceedings in Tunisia, the latter of which were dismissed, but though that had been upheld there was a further appeal pending, (ii) a claim in China which was withdrawn following settlement with others who later defaulted, (iii) a further arrest-only action in France, and (iv) what had proved to be an invalid London arbitration.
The English court had to consider two aspects of Article III Rule 6 of the Hague Rules:
- whether a misdelivery claim is caught by the opening barring wording, “In any event the [vessel interest is] discharged from all liability in respect of loss or damage”; and
- whether the requirement that “suit is brought” (within a year of when the goods were, or should have been, delivered) can be met by bringing proceedings other than in the contractual exclusive jurisdiction.
The court ruled (1) yes, it is and (2) generally, no.
Under (1), the words “In any event” were wide, and as a matter of language Article III Rule 6 could apply to delivery to someone not entitled to it. There was no settled understanding otherwise, and no restriction by any notion that misdelivery flouts an obligation that somehow falls outside the Hague Rules. Such was a clear breach of the Article III Rule 2 duties to “ … carefully … keep, care for, and discharge the goods …”.
This may also apply to delivery against a forged Bill of Lading, and to misappropriation post discharge if the parties have agreed to extend the carriage regime ashore.
The same would likely follow under the corresponding part of the Hague-Visby Rules, whose wider wording was partly intended to ensure application to misdelivery claims.
Under (2), the judge first gave a lengthy review of various circumstances involving proceedings in more than one jurisdiction, and the effect on time limitation. He concluded that, in deciding whether an English claim is time-barred, the court will not ordinarily treat another action, brought in breach of an exclusive jurisdiction or arbitration clause, as valid “suit” under Article III Rule 6. He did not elaborate on what possible “exceptional circumstances” could be, but implied that they might include a Claimant who without fault had failed sooner to discover the competing clause.
In England, misdelivery claims are likely subject to the Hague and Hague-Visby time limit, and proceedings brought contrary to agreed exclusive jurisdiction are unlikely to work, unless perhaps (undefined) exceptional circumstances apply.
Lastly, if the goods were never delivered, remember the second limb of the time limit, and: measure distance, estimate speed and make other precautionary allowance in calculating when delivery should have been, as time will run from then.
If you would like to discuss anything arising from this article please contact Ed Floyd at firstname.lastname@example.org and +1 (917) 999 6914 or Luke Zadkovich at email@example.com and +1 (917) 868 1245 / +44 (20) 8068 6844. This article is to be considered general commentary only and not to be relied upon as legal advice for any particular circumstances.