CL-2021-000431 - [2025] EWHC 1940 (Comm)

The action essentially concerns a cargo claim. I take the facts from the helpful summaries given in the parties’ skeleton arguments and the Case Memorandum.

In March 2021, 51,587.190MT of Soybeans (“the Cargo”) were loaded on board the Claimant’s vessel “PAPA JOHN” (“the Vessel”) at Barcarena, Brazil. The Cargo was to be carried to Pivdennyi, Ukraine. Seventeen bills of lading were issued by the Master which recorded that the Cargo was shipped “in apparent good order and condition”. These were endorsed to the Second Defendant.

Upon arrival near Pivdennyi on 12th April 2021, for reasons which are in dispute between the parties (but which are immaterial for present purposes), the Vessel was unable to discharge the Cargo in Ukraine.

The Vessel remained off Ukraine until 6th May 2021 when she sailed for Aliaga, Turkey pursuant to agreement between the parties. This agreement resulted in the issuance to the Second Defendant by the Claimant on 12th May of eight replacement or “switch” bills of lading (“the Switch Bills”), all of which were back-dated to the loading of the cargo in Brazil and attested to the apparent good order and condition of the cargo as at the original date and place of shipment. Switch Bills 1 to 3 were endorsed to the First Defendant and Bills 7 & 8 were endorsed to the Third Defendant.

Like the earlier bills which they replaced, each of the Switch Bills of Lading incorporated the Hague Rules by way of a Clause Paramount.

The Claimant now accepts (but had previously refuted in strong terms) that while the Vessel was off Ukraine, various quantities of cargo were discarded by the crew from the Vessel.

As it is now put in the Claimant’s Re-Amended Reply and Defence to Counterclaim at para. 83A.2:

“a very small proportion of the Cargo was removed and discarded by two members of the crew using dustpans and buckets. In the period between 16-19 April 2021, a minimal quantity of approximately 150kg of the Cargo was removed. From approximately 21 April 2021 until the Vessel's arrival at Aliaga, approximately 2 - 2.3 mt of the Cargo was removed. In total, at maximum, 2.5mt (representing c.0.005%) of the Cargo was removed.”

The alleged reason for this discarding of cargo is that this “was in accordance with common practice” (para. 83.A.3) and was the result of droplets and lines of condensation occurring on the top of the Cargo and found by the crew during April while waiting off Ukraine: see para. 83.A.1. That explanation is not accepted by the Defendants.

Following arrival at Aliaga, the Cargo was jointly inspected between 10th and 11th May, therefore before the issuance of the Switch Bills.

It is common ground that the Cargo on that inspection was revealed not to be in apparent good order and condition as at that date. The Defendants’ pleaded case as to what was observed as set out in paras. 22(2) to 22(4) of the Amended Defence and Counterclaim is as follows:

“(2)

Accessible cargo in the hatchway of each hold was found to have spoiled revealing “lumpy cargo, colour change, smell, high temperature/ moisture and damaged accordingly in hold no 1, 2, 3, 4 5. The average temperatures, are more than 45 degrees and moistures are more than 20%”.

(3)

Photographs taken by Control Union show mould affected and blackened soya beans on the surface of the cargo piles in way of which the exposed cargo hold boundary plating is heavily moisture-stained. (4) Moreover, photographs of electronic thermometers show spear temperatures up to 53oC and surface moisture content to 23.7%.”

As already noted above, the Switch Bills were issued on 12th May 2021, following the inspection. They were issued on behalf of the Master of the Vessel by Portinvest Logistic LLC (“the Agents”) pursuant a Letter of Authorisation emailed to the Agents by the Master at 1649 hours on 12th May.

Discharge of the Cargo commenced on 25th May and was completed on 17th June 2021.

It is accepted, for present purposes, that the one year time bar in Article III Rule 6 of the Hague Rules began to run from this date (17th June 2021), being the date of “delivery of the goods or the date when the goods should have been delivered”. Accordingly, for present purposes, it is accepted that the time for bringing suit in accordance with Article III Rule 6 expired on 17 June 2022.