' Happy Ranger'
Note: This decision was overturned by the Court of
Appeal on May 17 2002.
DMC Category Rating: Confirmed
Parsons have obtained leave to appeal
The contract of carriage consisted of three documents – a signed front page, a six-page rider and an attached specimen form of bill of lading. The front page contained the essential details of the agreement, including a lumpsum freight. It provided also by clause 5:
‘The Carrier’s regular form of Bill of Lading, as per specimen attached, is applicable and shall form part of this Contract. In the event of a conflict between the Bill of Lading and this Contract, the terms…. of this Contract shall prevail…..’.
The Rider, by clause 7, provided:
Clause 15 provided that ‘any dispute arising under this Contract of Carriage and Bill of Lading shall be decided by the competent Court of London and English Law shall apply.’
The rider contained (in the words of the judge) ‘a number of provisions which one would ordinarily expect to find in a voyage charterparty but which one would not expect to find in a straightforward contract of carriage contained in or evidenced by a bill of lading.’
The specimen bill of lading incorporated into the contract of carriage was on
the Mammoet form. Its preamble stated:
Clause 3 of the Bill of Lading was a General Paramount Clause. It read in
material part as follows (numbers added by the Editor):
In fact, no bill of lading was issued for the damaged process vessel, although bills of lading on the Mammoet form were issued for other cargo carried by the Happy Ranger under the contract on that voyage. These bills were ‘straight’ bills, namely bills that were not issued to order and named the consignee. As such, they were neither negotiable nor transferable.
Parsons maintained further that the contract of carriage was one which should be regarded as ‘covered by a bill of lading’ within the meaning of Article 1(b) of the Hague-Visby Rules, even though no bill of lading was actually issued for the process vessel in this case. They relied on the authority of Pyrene v. Scindia Navigation  2 QB 402. They pointed out that the Hague-Visby Rules applied to the contract also by reason of Article X(b) of the Rules, in that the carriage had been ‘from a port in a contracting State.’ As the contract of carriage was governed by English law, the combined effect of these provisions was to subject it to the Hague-Visby Rules as enacted in the Carriage of Goods by Sea Act 1971, in which case the applicable limit of liability would be in the order of US$2 million.
Parsons also argued that the words ‘apply compulsorily’ in paragraph 2 of clause 3 of the bill of lading – ‘required resort to the provisions of Italian law in order to determine whether the Hague-Visby Rules are compulsorily applicable to this trade’. In their submission, Italian law did in fact so require.
Finally, Parsons contended that it was irrelevant that straight bills were issued for the other cargo carried on the March 1998 voyage, since there is ‘no reason why straight bills should be regarded as outside the ambit of section 1(4) of the 1971 UK Act’.
For their part, the defendant shipowners argued that the contract of carriage in this case was not one to which the 1971 Act applied, since it was not a contract of carriage ‘covered by a bill of lading or any similar document of title. The contract of carriage was in fact a voyage charterparty, which did not contemplate the issue of a bill of lading within the meaning of the 1971 Act. The purpose of the Hague and Hague-Visby Rules was to regulate the responsibilities of parties to bills of lading, not to contracts of the type in the present case. Article X(b) related only to bills of lading and the preparatory works of the Hague Rules Convention indicated that they were intended only to cover contracts of carriage which were also documents of title. They also maintained that they were entitled to rely on the ‘shipped on deck’ clause (clause 7 of the Rider) as a complete defence to the claim, on the grounds that the word "shipped" included the process of loading.
There were, therefore, two questions for the judge to answer:
The judge also found that Article X(b) of the Hague-Visby Rules was inapplicable to this case, because ‘Parsons do not sue upon a contract contained in or evidenced by a bill of lading’. He also held that the words ‘ bill of lading’ where used in Article X have the same meaning as in section 1(4) of the 1971 Act and as in Article 1(b) of the Hague-Visby Rules themselves.
As to the Italian law point, the judge said that this was founded on the submission that the reference to "the respective legislation" in paragraph 2 of clause 3 must be ‘a reference to legislation other than that of the State whose law has been chosen as the proper law….’ He found however, that as a matter of first principle, ‘the question whether the Hague-Visby Rules apply compulsorily to this trade/transaction must fall to be determined by the proper law of the contract… [namely English law]. He did not consider the reference in paragraph 2 of clause 3 to "the respective legislation" to be of itself sufficient to displace this basic principle.
He accordingly held that in accordance with paragraph 1 of clause 3 of the specimen bill of lading form, Articles I –VIII of the Hague Rules applied to the contract with the liability of the Carrier being limited to £100 sterling per package.
On the second question, the judge held that the ‘shipped on deck’ clause had no application in this case. In his view, the cargo had never been shipped on deck, because – having been dropped during loading, it had never reached the deck.
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