
Anastasis Kyriakou
Published: May 01, 2025
Summary
On 13 November 2024, the UK Supreme Court delivered its decision in the case of The Giant Ace. The Court clarified the applicability of the one-year time bar under Article III, Rule 6 of the Hague-Visby Rules for misdelivery claims occurring after discharge of the goods. It concluded that the time bar applies, bringing much-needed certainty to this long-debated issue. The decision highlights the importance of prompt legal action for all parties involved in maritime trade, particularly in cases of post-discharge misdelivery. The Supreme Court’s decision affirms the previous decision of the Court of Appeal – see Misdelivery Of Cargo After Discharge.
Facts
The case arose from the carriage of approximately 85,510 metric tons of coal onboard the vessel “Giant Ace”. The cargo was shipped from East Kalimantan, Indonesia, under 13 bills of lading. The bills of lading were issued on the 1994 Congenbill form and incorporated the terms of a voyage charterparty that expressly subjected the contract to English Law.
The Charterparty provided that it would have effect subject to the Hague-Visby Rules and that those Rules “shall apply to any bill of lading issued under this Charterparty”. The Hague-Visby Rules were accordingly incorporated. The reverse terms of the Bills of Lading read:
“The Carrier shall in no case be responsible for loss of or damage to the cargo, howsoever arising prior to loading into and after discharge from the Vessel…”
Upon discharge at various Indian ports, the cargo was delivered without presentation of the original bills of lading, against a Letter of Indemnity. The claimant, Fimbank Plc, held the Bills of Lading as security for financing provided to its customer, Farlin Energy & Commodities FZE, who subsequently sold the cargo to various sub-buyers. Fimbank alleged that the Carrier’s delivery to an unauthorized party resulted in its inability to recover the financed amount.
Fimbank commenced arbitration proceedings more than one year after final discharge. The Carrier’s case was that the claim was time-barred under Article III, Rule 6 of the Hague-Visby Rules. This issue became the central question in the case.
Issues & Arguments
The Supreme Court was asked to decide three issues:
Applicability of the Time Bar to Misdelivery Claims Post-Discharge:
The claimant contended that the time bar under Article III, Rule 6 of the Hague-Visby Rules applies only to claims arising within the Carrier’s “period of responsibility,” defined as the period from the commencement of loading to the completion of discharge. According to the claimant, since the misdelivery occurred post-discharge, it fell outside this period, and the time bar should not apply. The claimant also emphasized that the Rules were historically intended to govern only the sea carriage of goods and not post-discharge actions.
The Carrier argued that the broad language of Article III, Rule 6—particularly the phrases “in any event” and “all liability whatsoever”—unequivocally covers misdelivery claims, irrespective of whether they arose before, during, or after discharge. The Carrier also highlighted that the Rule’s purpose is to provide finality and ensure claims are brought within a defined timeframe.
Exclusion of the Time Bar via Contractual Terms:
The Bills of Lading included a clause that purported to exclude the Carrier’s liability for events occurring post-discharge. The claimant argued that this clause effectively disapplied the Hague-Visby Rules, including the time bar provision.
The Carrier countered that Article III, Rule 8 of the Rules nullifies any contractual terms that attempt to reduce or exclude liability in a manner inconsistent with the Rules. Therefore, any such exclusion clause could not override the one-year time bar mandated by the Rules.
Contractual Applicability of the Time Bar:
The Supreme Court considered whether the one-year time bar applied contractually under the terms of the Bills of Lading, even in scenarios where the Hague-Visby Rules’ statutory provisions were not compulsorily applicable. The Carrier maintained that the incorporation of the Hague-Visby Rules into the Bills of Lading extended their applicability to all claims arising under the contract of carriage, including those related to misdelivery.
The claimant argued that if the Hague-Visby Rules did not apply compulsorily, the time bar’s application depended on the specific wording and scope of the contractual incorporation clause.
Supreme Court’s Decision
Applicability of Article III, Rule 6: The Supreme Court held that the time bar under Article III, Rule 6 of the Hague-Visby Rules applies to misdelivery claims arising post-discharge. Key findings included:
Broad Language: The phrase “discharged from all liability whatsoever” and its French equivalent (“en tout cas”) underscore the comprehensive scope of the Rules.
Delivery as a Key Event: Article III, Rule 6 refers to “delivery of goods” as the trigger for the time bar, distinguishing it from “discharge,” which is a physical operation. Delivery, often occurring after discharge, represents the completion of the Carrier’s contractual obligations.
Importance of Finality: The time bar promotes legal and commercial certainty by ensuring disputes are brought promptly, allowing Carriers to close their books.
Contractual Exclusion: The Court rejected the argument that the Bills of Lading’s clause excluding liability post-discharge invalidated the time bar. It emphasized that Article III, Rule 8 nullifies contractual provisions that diminish or negate the rights provided by the Hague-Visby Rules. Therefore, any attempt to exclude the time bar was ineffective.
Contractual Applicability: The Court noted that even if the Hague-Visby Rules did not apply compulsorily, the terms of the Bills of Lading incorporated them contractually. Thus, the one-year time bar remained applicable to the claim.
Conclusion
The Supreme Court’s decision confirms that the one-year time bar under Article III, Rule 6 of the Hague-Visby Rules applies to misdelivery claims arising after discharge. This ruling has significant implications for maritime law and practice:
For Carriers: Carriers benefit from the finality and certainty offered by the time bar.
For Cargo Interests: Cargo owners, banks, and other stakeholders must be vigilant about ensuring claims are notified promptly within the one-year period, regardless of whether misdelivery occurs post-discharge.
For Contract Drafting: Parties should carefully consider the wording of clauses in bills of lading and charterparties to ensure compliance with the Hague-Visby Rules and avoid unenforceable exclusions.
1 Fimbank Plc v KCH Shipping Co Ltd (“The GIANT ACE”) [2024] UKSC 38. On appeal from: [2023] EWCA Civ 569 Fimbank Plc v KCH Shipping Co Ltd (“The GIANT ACE”) [2024] UKSC 38. On appeal from: [2023] EWCA Civ 569
Related Articles
Misdelivery Of Cargo After Discharge
Does the 12-month Hague-Visby Rules time bar apply?
On 24 May 2023 the Court of Appeal handed down its judgment in FIMBANK PLC and KCH SHIPPING CO LTD dealing with the issue of whether the 12-month time bar under the Hague-Visby Rules applies to claims for misdelivery of cargo after discharge.
Articles