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Time bar under the Hague Visby Rules
Legal Insight from HFW
Background
The court recently clarified what a “suit” is for the purpose of the time bar under Article III,6 of the Hague Visby Rules (HVR) in relation to claims under bills of lading (BOL).
Cargo was discharged from the relevant vessel in September 2019. No arbitration was commenced initially but on 18 August 2020 the Holders of the BOL issued proceedings in Singapore for the arrest of a sister ship. Arbitration proceedings were later commenced in December 2020, more than a year after the alleged misdelivery of the cargo.
Owners argued that the Holders’ claim was time-barred pursuant to Article III,6 of the HVR which provides that:
“the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered.”
The Holders argued that the Singaporean proceedings were sufficient to prevent the claim being time barred.
Decision
The Commercial Court held that the Singaporean proceedings were for security and that a determination on the merits of the Holders’ claim for misdelivery would (absent further agreement) require arbitration.
The Court commented as follows:
““suit” for the purposes of Article III, 6 means proceedings that can decide the claim…if time is to stop running it is substantive proceedings that are required, that is, proceedings to establish liability.”
Comment
The case highlights the importance of commencing proceedings within time. Commencing arbitration is normally a simple process and is often (at least at the commencement stage) inexpensive.
If you have any concerns as to whether your claim may be time barred or need any assistance commencing arbitration, please contact us.
By Brian Perrott & Lee Forsyth
Partner & Senior Associate, HFW
