Simon Rainey KC. Quadrant, has written on the significant
case of FIMBank plc v KCH Shipping Co Ltd [2022] EWHC 2400 (Comm) in which The
Commercial Court (Sir William Blair) on September 28th handed down
judgment in FIMBank p.l.c. v KCH Shipping Co., Ltd, an appeal under section 69
of the Arbitration Act 1996, “holding that the time bar in Article III rule 6
of the Hague-Visby Rules can apply to claims in relation to misdelivery after
discharge”.
Rainey said that the Court’s decision resolved an
important question which had not previously been decided by the English courts,
and which had divided leading academic commentators, as well as judges in other
common law jurisdictions.
The appeal related to a claim brought by FIMBank plc, the
holder of bills of lading, for the alleged misdelivery of cargo by the
contractual carrier, KCH Shipping Co., Ltd (KCH). The bills were concluded on
the Congenbill form, and were subject to the Hague-Visby Rules, including the
time bar in Article III r 6 of one year after delivery which applies to claims
against carriers.
FIMBank served a Notice of Arbitration on KCH after that
time bar expired. Its position was that its claim was nevertheless not caught
by the time bar, contending that:
In its submission, this was so given that the Hague-Visby
Rules did not regulate a carrier’s obligation to deliver cargo (as opposed to
the carriage of goods by sea), and only related to a ‘period of responsibility’
which ended with the discharge of cargo. FIMBank further argued that the
parties had, in any event, contractually disapplied the Rules in respect of the
period after discharge, insofar as Clause 2(c) of the Congenbill form provided
that:
In an Award on preliminary issues, the arbitral tribunal
determined that FIMBank’s claim was time-barred, irrespective of whether
delivery post-dated discharge on the facts (which remained a matter in
dispute). This was because:
The Court upheld the tribunal’s decision on both
questions, and accordingly dismissed the appeal.
On the first question, it concluded that, on its true
construction, Article III r 6 of the Hague-Visby Rules applied to claims for
misdelivery of cargo after discharge. The Court noted that this conclusion
avoided the need for fine distinctions as to the point at which discharge
ended, and accorded with the objective of the rule which was intended to
achieve finality and to enable the shipowner to clear its books.
It further observed that, although certain common law
authorities and commentaries might be said to support the construction of
Article III r 6 for which FIMBank contended (including Carver on Charterparties
and Voyage Charters), there was no international judicial or academic consensus
to that effect.
The Court held that, even if its conclusion above was
wrong, the tribunal’s decision was in any event justified by its finding that
the bills of lading contained an implied term providing that the Hague-Visby
Rules obligations and immunities are to continue after actual discharge and
until delivery takes place, in line with the reasoning of the Court of Appeal
in The MSC Amsterdam [2007] EWCA Civ 794.
On the second question, the Court held that, on a proper
construction, Clause 2(c) did not disapply the Hague-Visby Rules to the period
after discharge.
Although FIMBank relied in this regard on The MSC
Amsterdam, in which the express terms of the bill of lading concerned were held
to have disapplied the Hague Rules after discharge, the Judge held that that
decision did not warrant a different result, insofar as it featured a bill of
lading with materially distinguishable terms.
Steven Berry QC and Helen Morton (instructed by Campbell
Johnston Clark Ltd) for the Claimant.
Simon Rainey K.C. of Quadrant Chambers and Matthew Chan
of Twenty Essex acted for KCH, instructed by Kyri Evagora and Thor Maalouf of
Reed Smith LLP.
Hearing date July 28th 2022.
