11 November 2022
6 min read
#Transport, Shipping & Logistics
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Time bars give maritime lawyers nightmares. The parameters can also be quite vague in regards to defining the relationship with our clients. Is our client the club that appoints us (and pays our bill)? Is our client the club’s member, the ‘shipowner’ or the ‘carrier’ under the bill of lading? If we refer to our ‘client’ or ‘clients’, or ‘owners’ or ‘the carrier’, to which legal entity are we referring, and what are we seeking to convey? This confusion is what makes time bars so daunting – who do you seek an extension from and make a subsequent claim against if ‘owner’ can refer to more than one owner and ‘client’ can be used as an umbrella term to refer to more than one client?
If you are unsure about the identity of the contractual carrier under a contract of carriage and are faced with an impending time bar, from whom could you seek an extension of the limitation period, or commence proceedings against? Under the Hague-Visby Rules, you have one year to pursue a claim against the ‘carrier’, being the “owner or charterer who enters into a contract of carriage”. This regularly means that it is necessary to seek an extension of the limitation period. This can be surprisingly complicated where the contract of carriage does not clearly or expressly identify the contractual carrier.
In the case of Ixom Operations Pty Ltd v Blue One Shipping SA [2022] FCA 1101 (Ixom Operations), the lawyer acting on behalf of both the registered owner and demise charterer of the vessel agreed to an extension of time on behalf of his ‘client’, being the ‘owners’. Ixom commenced proceedings within the extended period against the registered owner only, as opposed to the proper defendant – the demise charterer – and asserted that it had relied on representations that the registered owner was the proper defendant, the contracting carrier.
Time bars are a fact of life for maritime lawyers, and this article considers how they can (hopefully) avoid making a claim against the wrong party before being time-barred.
Ixom Operations Pty Ltd received a contaminated cargo of approximately 25,300 metric tonnes of sulphuric acid. The vendor and consignor was Trammo Pty Ltd, who had arranged for the carriage of the consignment aboard the MV “CS Onsan” (Vessel) under a Tanker Voyage Charter Party. Ixom was not a party to the charter party but was named as a consignee on the bill of lading. The Vessel’s registered owner was Blue One Shipping, and CS Marine Co Ltd was the demise charterer. A legal representative was appointed by the P&I Club (Club Lawyer) to act on behalf of both Blue One Shipping and CS Marine.
Following negotiations, the parties agreed to vary the arrangements for the discharge of the cargo subject to the P&I Club providing security for claims under the bill of lading in respect of any judgment against “owners or demise charterers of the Vessel”. At the same time, Ixom was seeking indemnity for cargo damage from its insurer, Vero. The legal representative retained on behalf of Vero notified Ixom’s lawyer that an extension of time needed to be sought to avoid being time-barred. This is where the source of the claim arises and is a step that many maritime lawyers will face when seeking extensions of the limitation period.
The lawyer acting on behalf of Ixom successfully sought a three-month extension of the limitation period from the ‘owners’ of the Vessel.
In response, the Club Lawyer confirmed that “our client agrees” to provide the time extension sought.
Various additional extensions were granted, on the same terms. Shortly before the expiry of the then current extension, Ixom commenced proceedings naming the registered owner (Blue One Shipping) as the first defendant. After the expiry of the time extension, Blue One Shipping filed a defence denying that it was a party to the bill of lading and contended that at all material times, the vessel was demise chartered to CS Marine, who was (therefore) the contracting carrier under the bill of lading.
CS Marine was joined as defendant to the proceedings and sought to rely on the time bar defence.
Ixom alleged that it relied on representations made in the defendant’s email reply to the initial request for an extension of time to the effect that the registered owner was in fact the carrier under the bills of lading.
Ixom pleaded that the defendants had engaged in misleading and deceptive conduct in breach of the Australian Consumer Law by failing to indicate who the ‘client’ was and advising Ixom that CS Marine, as demise charterer, was the contractual carrier as per the contract of carriage or that the extension of time had been given on behalf of both defendants. Further, by misrepresenting Blue One Shipping as the Vessel owner and/or party to the contract of carriage.
Ixom also argued that the email implied that the owner of the Vessel had given the extension and, as the contractual carrier, was able to grant the extension. Ixom pleaded that the defendants were estopped from denying that Blue One Shipping was a party to the contract of carriage as evidenced by the bill of lading.
The Court did not consider the email sent by the defendant’s lawyers, with the general reference to ‘our client’ in response to the applicant’s requests for extensions from the ‘owners’, misleading or deceptive. Instead, the Court believed that a ‘reasonable reader’ would have interpreted that Ixom had gotten what it sought, namely, an extension from whichever owner could grant one as the contractual carrier.
As disussed by the Court and as acknowledged by UK authorities, identifying the carrier under a contract evidenced by a bill of lading is generally not a straightforward process. This is largely due to the term ‘owner’ being ‘context-driven’ and having no specific agreed definition. ‘Owner’ can mean a registered owner or a demise charterer. Accordingly, where ‘owner’ or ‘carrier’ is ambiguous under the contract of carriage and where the identity of the contractual carrier cannot be ascertained from the other party, and a time bar is looming, it is prudent for extensions to be sought against both, which the Court confirmed can avoid debate.
Holding Redlich’s Transport, Shipping & Logistics team can assist you with understanding who your clients are to seek extensions on limitation periods. If you have any questions, please get in touch with us below or send us your enquiry here.
Authors: Geoff Farnsworth & Cara Cook
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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