21 October 2022
#Transport, Shipping & Logistics
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In a recent judgment handed down by the Federal Court of Australia, it was held that the owners and operator of the M.V. “Dijksgracht”, could rely on a limitation of liability clause in their standard terms and conditions and limit their liability to £100 per package. The implication of this decision is that, if the owners and operators are ultimately liable for the alleged damage, they will be able to limit their liability to £300 (for three packages), rather than approximately EUR1.2 million, being the full amount of the claim.
This case concerned a shipment of pontoons (or “breakwater units”) from Cork, Ireland to Geelong, Australia where they were to be installed at the Royal Geelong Yacht Club. The consignee, Poralu Marine Australia, alleged that the cargo was loaded on board the vessel in sound condition and that three pontoons were found to be damaged when the cargo was discharged.
The Booking Note and Seaway Bill purported to incorporate Articles I-VIII of the Hague Rules (but not extending to Article IX, which increases the stated liability limits by reference to the value of gold) and limited liability to £100 per package.
This was a complex case involving arguments as to the formation and terms of the contract, the applicability of the Hague-Visby Rules (HVR) under the law of the contract, and the applicability of the Australian Hague-Visby Rules as encompassed in the Carriage of Goods by Sea Act 1991 (Cth) (AHVR).
The key findings can be summarised as follows:
The effect of this judgment is that the AHVR will apply to most shipments to Australia, except in limited circumstances. Further, that in order to apply the liability regime applicable under another convention, that convention must be incorporated into the contract in full or with only minor or insignificant amendments.
One of the main exceptions to the applicability of the AHVR is if the contract of carriage is a charterparty, under which parties are free to agree to whatever terms they wish to govern their arrangement, unless they subsequently issue a ‘negotiable’ sea carriage document.
Our Shipping, Transport & Logistics team acted in this case for the successful owners and operators. An appeal has been filed by cargo claimants. The full judgment can be read here.
If you have any questions about the circumstances in which shipments to Australia will be subject to lower limitation regimes, please contact us below or send us your enquiry here.
Authors: Nathan Cecil & Melanie Long
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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