Judgments - Owners of cargo lately laden on board the ship or vessel "Starsin" and others (Original Respondents and Cross-appellants) v. Owners and/or demise charterers of the ship or vessel "Starsin" (Original Appellants and Cross-respondents) and two other actions

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    207. Accordingly, I am satisfied that the Himalaya Clause is not itself a contract of carriage of goods by sea, and that merely by taking the benefit of such a Clause the owner or demise charterer of the ship does not become a party to a contract of carriage and so a carrier within the meaning of Article I(a) of the Hague Rules.

    208. But the matter does not rest there. Clause 5 of the bills of lading in the present case provides inter alia that the third party who takes the benefit of the provisions of the Clause shall "to this extent" be deemed to be a party to the contract contained in or evidenced by the bill of lading. The purpose of these words is to bind subsequent holders of the bill of lading by the limitations on their rights of suit imposed by the Himalaya Clause: see Section 2(1) of the Carriage of Goods by Sea Act 1992. The words "to this extent" are words of limitation. They have the effect of deeming the third party to be a party to the bill of lading to the extent of obtaining the benefit of the protective provisions of the Clause but no further. They do not subject the third party to any of the contractual obligations of the carrier, including the obligation to carry the goods, contained in or evidenced by the bill of lading.

    209. What are the consequences? As I understand the argument, they can be summarised in three propositions:

    "(i)  the bill of lading contains or evidences a contract of carriage of goods by sea;

    (ii) the owner or demise charterer of the ship is to be treated as a party to that contract to the extent of the protective provisions in the Himalaya Clause, which are thereby incorporated into a contract of carriage and invalidated by Article III Rule 8; but

    (iii) the owner or demise charterer of the ship is not to be treated as a party to the contract of carriage to any further extent, with the result that the positive obligations in Article III Rules 1 and 2 are not incorporated.

    210. This is an attractive and elegant solution to the problem. It enables Article III Rule 8 to serve its purpose, which is to ensure that the security of the ship is available to the cargo owner notwithstanding any contractual provision to the contrary, without producing the paradoxical consequences of incorporating Article III Rules 1 and 2. But is it correct?

    211. My initial view was that it is not. My difficulty was with proposition (ii). It would normally be an abuse of language to describe a person as being a party to a contract of carriage because he is a party to a contract which is such a contract only because someone else undertakes obligations of carriage thereunder. It must be a contract under which he undertakes such obligations himself.

    212. But on further reflection I have changed my mind. Article III Rule 8 of the Hague Rules invalidates any provision in a contract of carriage of goods by sea which relieves "the carrier or the ship" from liability for loss or damage to the cargo. As I have pointed out, the word "carrier" includes the owner or demise charterer of the ship which has entered into a contract of carriage. Unless the words "or the ship" are tautologous, therefore, they must be intended to cover the case where the owner or demise charterer of the ship has not entered into a contract of carriage. Thus the Rule invalidates a provision contained in a contract of carriage covered by a bill of lading to which the owner or demise charterer of the ship is a party and which purports to relieve the owner or demise charterer of the ship from liability for loss or damage to the cargo even though it has not itself entered into a contract of carriage. The only way in which effect can be given to such a provision is to square the circle and accept that the owner or demise charterer of the ship can become a party to a contract of carriage covered by a bill of lading even though it is a contract under which it does not itself undertake any obligations of carriage.

    

 
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