The debate on the interpretation of limitation of liability under the Hague and Hague-Visby Rules appears not to be over as permission to appeal has been granted in The Aqasia and in The Maersk Tangier.
In The Aqasia, Sir Jeremy Cooke held that the package limitation under Article IV rule 5 of the Hague Rules, by reference to 'package or unit', does not apply to bulk cargoes and that if it could apply, the only legitimate application would be by way of interpreting the word ‘unit’ as ‘freight unit’. The word ‘unit’ refers to a physical item (or composite of items) rather than an abstract unit of measurement.
In The Maersk Tangier, Mr Justice Baker provided further guidance on the definition of what constitutes a ‘package or unit’ in both the Hague and Hague-Visby Rules. For the purpose of the Hague Rules containers do not constitute a ‘package’. You look at the contents of the containers rather than the wording of the bill of lading. The court held that individual items of the cargo were ‘units’ while bags of tuna parts were Hague Rules ‘packages’. In the words of Mr Justice Baker ‘there is no source in the language or purpose of Article IV, rule 5, for a special, added, rule calling for a focus not upon the cargo as shipped, but upon how (if at all) the cargo could have been shipped if not containerised’.
While the words ‘package’ or ‘unit’ have the same meaning under the Hague and Hague-Visby Rules, the bags of tuna parts had not been ‘enumerated’ on the waybill under which they were carried as required under Article IV rule 5(c) of the Hague-Visby Rules, therefore, for the purpose of limitation under the Hague-Visby Rules, the container was deemed to be the package for the bags, but the enumerated loins were still, each, a unit.
It is unlikely that we will hear what the decision of the Court of Appeal will be before, at least, mid-January 2018. In The Aqasia, the appeal judges will be confronted with the question of whether in fact there is a limitation of liability for bulk cargoes, in other words, was Sir Jeremy Cooke right? In The Maersk Tangier instead, given the number of issues that were considered, it is still unclear what the scope of the appeal will be. One thing is certain: whatever the appellant’s position is in The Aqasia, it will be a collateral challenge to The Maersk Tangier as the cases mutually reinforce each other on the meaning of ‘package or unit’.
This article originally appeared in the June 2017 edition of shipping case digest.