INTRODUCTION Contributed by: Yoav Harris, John Harris (1940-2023) and Domiana Abboud, Harris & Co Maritime Law Office
After considering the evidence, the court con - cluded that it could not be persuaded, on the balance of probabilities, that – when issuing the L/C – UOB knew that the cargo had already been discharged and delivered into HLT’s possession. Considering that, at the time of the breach (the discharge and delivery of the cargo to HLT), UOB was not even in the picture, the court found it difficult to accept Maersk’s causation defence, submitting that had UOB been asked “Would you have agreed for the cargo to be delivered (to HLT) without production of the original bills of lading?”, UOB would have answered “Yes, of course”, especially when that proposition was never actually tested at trial with UOB’s wit - nesses. As all of the ship-owner’s pleaded defences failed, the court granted judgment in favour of UOB against Maersk, awarding a sum of USD39.3 million – being the market value of the cargo at the time of misdelivery as assessed by the court – together with interest at 5.33% per annum, reminding carriers and traders what the consequences – according to common practice – might be of discharging and delivering carried cargos not against presentation of the original bills of lading, with an LOI provided as indemnity for such a breach. The Wide Protection of the One-Year Time Bar Limitation Another matter of misdelivery was not favour - able to the financing bank, FIMbank, which financed a cargo of about 85,510 MT in bulk carried by the vessel Giant Ace between Indo - nesia and the Indian ports of Jaigarh and Dighi, and discharged between 1 and 18 April 2018 against letters of indemnity. Although it was held (following authorities reaching back to Glyn Mills v East and West India Dock (1882)) that it was common ground that delivery by a carrier
without the production of a bill of lading was a breach of contract with strict liability, such that fault or negligence did not have to be proved, because FIMbank served a notice of arbitration against the (contractual) carrier (KCH) on 24 April 2020, more than one year after the delivery of the goods, following Article III, Rule 6 of the Hague-Visby Rules, the claim was time-barred. The court of appeal found that although the Hague-Visby Rules applied only to the carriage by sea, which began on loading and ended at the discharge of the cargo, the revised word - ing of the Hague-Visby Rules at Article III Rule 6 (“shall in any event be discharged from all liabil - ity whatsoever in respect of the goods”) is wide enough to apply also to liabilities arising beyond the carriage and discharge of the cargo, and to shelter same under the one-year time bar limita- tion. The Supreme Court (FIMbank v KCH Ship - ping [2024] UKSC 38) added that the statement made in Article IV bis of the Hague-Visby Rules – “the defences and limits of liability provided for in these Rules shall apply in any action against the carrier… whether the action be founded in contract or in tort” – also made it clear that the defences according to the Rules are not limited only to breach of obligation and include misde - livery claims. Sanctions and Force Majeure US Sanctions raised the question of force majeure and a party’s freedom to reject a non- contractual performance in the matter of RTI v Mur Shipping [2024] UKSC, where the charterers (RTI) and owners (MUR) concluded a contract of affreightment (COA) for the carriage of 280,000 MT per month of bauxite between July 2016 and June 2018. Under the COA, payment of freight was agreed to be in US dollars. On April 2018, the US Department of Treasury’s Office of For - eign Assets Control applied sanctions to RTI’s parent company. MUR invoked the force majeure
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