Baker J handed down an extensive judgment on 29 March 2017 in respect of four preliminary issues concerning limitation of liability under Article IV r 5 of the Hague and Hague-Visby Rules. The case raises a number of important issues on limitation of liability in the context of transport by containers that have never previously arisen for decision by an English court. The consignee claimed in respect of alleged cargo damage to unpackaged tuna loins and bagged tuna stuffed into three containers carried by Maersk Line from Spain to Japan. The shipper had a right to demand the issue of a bill of lading, but no bill was ever issued, and the consignee eventually chose to accept the issue of sea waybills instead of a bill of lading. It was in issue whether the Hague or Hague-Visby Rules applied, in either case whether the limit of liability was to be measured by reference to the container as the ‘package or unit’ or the tuna as ‘packages or units’, and whether there was an aggregate limit across the three containers.
Whether the Hague-Visby Rules applied turned on whether the contracts of carriage were covered by a bill of lading in accordance with Article I(b) of the Hague-Visby Rules, therefore making the Hague-Visby Rules applicable with the force of law pursuant to the Carriage of Goods by Sea Act 1971. Baker J held that despite a bill of lading never being issued, and sea waybills being issued instead, the contracts of carriage were nevertheless still covered by a bill of lading since the shipper had a right to demand a bill of lading and the issue of waybills instead made no difference.
This decision meant that the issue as to the effect of Article IV r 5 of the Hague Rules would not arise, but Baker J considered this point in any event. In this context, the question arose for decision for the first time whether goods only constituted a ‘package or unit’ if they could have been shipped as a ‘shipping unit’ i.e. in the same state without further consolidation or packaging if they had not been placed in a container. Baker J concluded that where cargo was packaged, it could not be considered ‘units’ even if it could have been shipped without packaging. Where cargo was unpackaged, if it was made up of identifiably separate items, those items would be ‘units’, irrespective of the fact it might only be possible to ship them ‘as is’ in a container. Each tuna loin was accordingly a separate ‘unit’, and each bag of tuna a separate ‘package’ for the purposes of limitation of liability.
The position under the Hague-Visby Rules turned on whether the tuna loins had been sufficiently enumerated in the bills under Article IV r 5(c) of the Hague-Visby Rules, where each bill stated “[number] PCS FROZEN BLUEFIN TUNA LOINS”. Baker J held that the enumeration needed to be of the number of units ‘as packed’ per the language of the rule, but that it was sufficient if the number recorded in the bill was accurate as to the number of separate units. There was no further requirement for the description in the bill to make clear (contrary to the Australian decision in El Greco (Australia) Pty Ltd v Mediterranean Shipping Co SA), whether the units were ‘as packed’, packed as separate unpackaged articles, or packed in packages. He therefore held that the tuna loins and not the containers were the relevant units, but had there been such a requirement, Baker J would have concluded there was not a sufficient enumeration, and the container would be deemed to be the relevant package or unit.
In respect of aggregation of the limit of liability, Baker J held that the meaning of ‘per package or unit’ was that a separate limit was applicable in respect of each package or unit; the limit was not in the aggregate.