The plaintiff, established in New York, brought an action against the first defendant based in Oporto, the second defendant based in Switzerland, the third defendant based in Bermuda and the fourth defendant vessel, represented by the fifth defendant, seeking payment of USD 67,199.44 for damages arising from the delay in delivering its goods carried by sea. The plaintiff had contracted with the first two defendants (as freight forwarder and carrier respectively) to arrange for the transport of its goods from the port of Leixões to Hong Kong on board the fourth defendant vessel, a Russian merchant ship carrying general cargo. The third defendant was sued as the insurer of the transport contract.

The court of first instance dismissed the plaintiff's claims except in relation to action in rem against the fourth defendant vessel, ordering it to pay USD 67,199.44. The plaintiff appealed to the Court of Appeal.

Held: The plaintiff's claims are not time-barred but the action in rem against the fourth defendant vessel is disallowed.

The first issue on which the appeal is based is whether the right exercised by the plaintiff - a claim for compensation for alleged damage suffered as a result of the delay in the delivery of its goods - has expired because of the time bar in art 3.6 of the Hague Rules. Article 10 of the Hague Rules provides that its provisions shall apply to all (export) bills of lading created in one of the Contracting States. In turn, art 27 of DL 352/86, which gives the Hague Rules domestic effect, provides that the 'rights of compensation provided for in this statute shall be exercised within two years from the date on which the injured party became aware of his/her right'. Thus two expiry periods potentially apply. As is known, by constitutional rule, the law of international Conventions received into the domestic order prevails over domestic law. Moreover, art 2 of DL 352/86 provides that contracts of carriage by sea are 'governed by the international treaties and conventions in force in Portugal and, in the alternative, by the provisions of this statute'. The DL thus affirms the primacy of treaties and Conventions in force in Portugal, relegating to itself a subsidiary field of application, applying where such treaties or Conventions are inapplicable.

Since the DL is subsidiary in application, it is the Hague Rules that are applicable to the present case, since it concerns international containerised sea transport of goods from the port of Leixões to Hong Kong. It is therefore unquestionable that the one-year expiry period laid down by the Brussels Convention applies. For situations not covered by the Convention, the longer term of DL 352/86 governs.

The plaintiff, having received the goods on 6 August 1988, brought the action on 16 August 1989, during the summer judicial vacation. From a construction of arts 296 and 279.e of the Civil Code it follows that when the period of expiry ends during the period of judicial vacation, it is transferred to the first working day after the vacation. Accordingly, the plaintiff's claim was brought in time.

The second issue is whether, in the present case, an action in rem could have been brought against the fourth defendant vessel. The plaintiff brought the action against the ship because it was allegedly not possible to identify precisely who the carrier was who was in charge of the transportation of its goods. In terms of arts 10.1 and 28.1 of DL 352/86, if the sea carrier is not identifiable on the basis of the information given in the bill of lading, the ship carrying the cargo shall be answerable by an action in rem to the interested parties in the same terms as the carrier would respond. The ratio of this rule is to avoid situations of maritime fraud when the identification of the real carrier is not known, since the transport involves the intervention of several actors.

The sea carrier includes both the owner of the ship and the charterer who has been a party to a contract of carriage with a shipper - see art 1.a of the Hague Rules. In the Portuguese version of this Convention, the word 'carrier' was translated as 'shipowner' and this is defined as 'the owner of the ship or the charterer who was a party to a contract of carriage with a shipper'. Here, the bill of lading clearly stated the shipowner's identity. Therefore, there is no basis for an action in rem on the basis of non-identification of the carrier.

The third issue is whether the first defendant is liable, as an agent of the carrier, for the late arrival of the goods to Hong Kong, as it did not act diligently. With due respect, the plaintiff is relying on the existence of a sea carriage contract to which the Brussels Convention applies, yet has made no claim for any loss or damage to the goods in question. This is sufficient reason for not accepting the argument. The Hamburg Rules were later drafted to introduce the principle of the carrier's liability for delay in the delivery of the goods in arts 5.1, 5.2 and 5.4.a.ii (and in very limited cases). This is an indication that the Hague Rules did not include such grounds of carrier responsibility.

But even if that were not so, the first defendant, as freight forwarder, cannot be held responsible for the late delivery of the goods. The shipowner, in the bill of lading, did not assume an obligation to deliver within the period to which the plaintiff refers. The plaintiff has not proved that the ship did not follow the usual route or that there was a reason for the alleged delay or negligence of the shipowner. The first defendant did not undertake, either with the exporter or with the importer of the goods, to get them to Hong Kong by a particular date. It merely stated that the 'travel time was about 35 to 45 days'. The consequential losses complained of by the plaintiff are also too remote to claim.

[For the subsequent unsuccessful appeal to the Supreme Court of Justice, see CMI610.]