Carrier issues waybill but Court of Appeal says the contract of carriage was “covered by a bill of lading”. Go figure… (Maersk Tangier – Part 1)

It is a testament to the ingenuity (and, cynics might say, powers of self preservation) of English law and lawyers that in certain circumstances the effect of the law can actually be entirely contrary to what it would on first glance, appear. By way of illustration, this article considers one of the issues considered in the Maersk Tangier case (AP Moller-Maersk A/S trading as Maersk Line v Kyokuyo Limited [2018] EWCA Civ 778).

The Hague Visby Rules apply to contracts of carriage but, due to the restricted definition of a “contract of carriage” in Article (1)(b) of the Rules, they only apply to those “covered by a bill of lading or any similar document of title”.

In the Maersk Tangier case the parties had entered a contract of carriage under which it was agreed that a bill of lading would be issued. They subsequently agreed (for convenience) to the issue of a waybill instead.

A waybill is not a “similar document of title” so the question was whether this was a contract of carriage covered by a bill of lading under the Hague-Visby Rules, such that the limitation of liability provisions therein might apply.

Perhaps surprisingly it was the party seeking to argue that the contract was not covered by a bill of lading that was up against it due to a number of previous authorities which confirmed that where a contract of carriage envisaged the issue of a bill of lading the rules would apply regardless of whether or not one was actually issued. Potentially in their favour though was the fact that in none of the previous cases had the parties gone further and, by agreement, issued a waybill instead.

Based on the previous authorities the Court of Appeal held that the contract of carriage was one covered by a bill of lading. Of overriding importance was the fact that at its inception the contract of carriage provided for the issue of a bill of lading on demand. Based on the previous authorities (including Pyrene v Scindia [1954] 2 QB 402) LJ Flaux, delivering the leading judgement, held that in those circumstances it was no answer to say that no bill of lading was ever in fact issued. In his judgement, he said:

“…in circumstances where the appellant expressly eschews any case of variation or waiver or estoppel, the fact that sea waybills were issued can make no difference to the correct analysis. Because the contract of carriage entitled the respondent to ask for the issue of a bill of lading on demand, the contract of carriage was from its inception one which was “covered by a bill of lading” within the meaning of Article 1(b) of the Hague-Visby Rules and a contract which “by implication provides for the issue of the bill of lading” within the meaning of section 1(4) of the 1971 Act.

The Court of Appeal also came to a fascinating and very important conclusion in respect of the meaning of “packages” for the purposes of the package limitation provisions… but readers will have to wait until the next exciting instalment in this series for a summary of the conclusions they reached and an outline of their guidance in relation to those provisions.

Stay tuned!