Ascoba Co Ltd (the plaintiff: P) exported 1,501 containers of telephones to Dabouqi (the buyer) in Jordan. Safco Logistics (HK) Ltd (the second defendant: D2) was P's freight forwarder. Gardenia Services (Gardenia) was D2's agent in Jordan.

P alleged that a contract for carriage was made with D2 before three bills of lading (BLs) were issued to P, either by D2, or by Safco International Freight Corp (the first defendant: D1) as D2's agent.

P instructed D2 that delivery of goods beyond Gardenia should be made only upon presentation of the original BLs. P gave the BLs to HSBC in Hong Kong with the same instructions. The buyer would obtain the BLs after paying Union Bank in Jordan. HSBC sent the BLs to Union Bank for the buyer to collect upon payment. The goods were shipped out of Hong Kong in July 1999.

P was never paid. P learned from D2 that Gardenia had released the goods in August 1999 without presentation of the BL. P received the BLs returned by Union Bank. P commenced proceedings in August 2000. P sued D2 for breach of contract of carriage and/or negligence as a bailee. P claimed USD 74,700 as the value of the goods. At trial, the dispute was only between P and D2.

D2 argued that there was no contract between D2 and P. D2 also argued that D2 was not a principal as D2 was a mere secretary for D1.

D2 further argued that P's claim was time-barred by cl 19 of the BL, which set a 9 months time-bar. P counter-argued that cl 7 of the BL, being a 'Paramount Clause' referring to the Hague-Visby Rules (HVR), gave P 12 months to sue.

D2 did not raise any defence as a bailee for negligence, but P conceded that P's case rested on breach of contract and not bailment.

D2 did not dispute: (1) that misdelivery occured; (2) that P was never paid; (3) the value of the goods; and (4) that P's claim was not limited by the applicable weight limitation under HVR art 4.5.a.

Held: Judgment for P.

P was entitled to USD 74,700.

On the evidence, there was a contract between D2 and P. D2 was a principal.

P was not time-barred. The time-bar was 12 months after delivery of the goods.

First, cl 7 of the BL was titled 'Paramount Clause', and the HVR, being the law in Hong Kong, permits a 12-month time bar after delivery or intended delivery of the goods.

Second, cl 19 of the BL was not a 'specifically negotiated' clause.

Third, D2's reliance on Bhatia Shipping and Agencies Pvt Ltd v Alcobex Metals Ltd [2004] All ER (D) 265 (Bhatia) was misplaced. Bhatia did not reject the possibility of a 12-month time bar being applicable: Bhatia [21]-[22].

Fourth, the loss or damage in this case was not 'known to occur within a particular stage of the carriage shorter than would apply to it under the relevant Convention': Finagra (UK) Ltd v OT Africa Line Ltd [1998] 2 Lloyd's Rep 622, 630-631.

Fifth, HVR art 3.8 provides that 'any clause … lessening such liability … shall be null and void'.

Sixth, if there are conflicting time bars, the longer time bar is to be preferred: Finagra; Sabah Flour & Feedmills Sdn Bhd v Comfez Ltd [1988] Lloyd's Rep 18, 20.