The claimant chartered a product tanker Casco from the respondent owners on the Shelltime 4 form. Clause 27(a) of the charterparty provided exceptions to liability while cl 27(c)(ii) provided that the exceptions in sub-clause (a) shall not apply in respect of:

(ii) any claim (whether brought by charterers or any other person) arising out of any loss of or damage to or in connection with cargo. All such claims shall be subject to the Hague-Visby Rules or the Hague Rules, as the case may be, which ought pursuant to Clause 38 hereof to have been incorporated in the relevant bill of lading (whether or not such Rules were so incorporated) or, if no such bill of lading is issued, to the Hague-Visby Rules.

Article 3.6 of the Hague-Visby Rules sets out a one-year time bar:

… the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods unless suit is brought within one year of their delivery or of the date when they should have been delivered.

Before the vessel was delivered into the charterparty, it carried a cargo of palm oil. After discharge, the vessel proceeded to Amsterdam as ordered and the tank cleaning started. The claimant sub-chartered the vessel for the carriage of gasoline. When the sub-charterer intended to start loading the cargo, their surveyors inspected the tanks and issued a letter of protest stating that the vessel was not ‘ready and suitable in every respect to load the intended cargo’. The sub-charterer cancelled the charterparty. Further cleaning was undertaken and further inspection was carried out by the surveyors, who concluded that the tanks were ‘substantially not suitable to load the nominated cargo’. In particular, the cargo tanks were in a very poor condition due to the state of the epoxy coating and tankwashing by hot water was not sufficient. However, centre tanks 4 and 8 were accepted for lading gas oil. The vessel was re-delivered.

The claimant asserted the breach of a number of charterparty terms and claimed losses arising from the cancelled sub-charterparty, wasted bunkers, and a balance of account on the final hire statement. The respondent contended that the claims for the first two items were time-barred. The judge considered whether the claimant’s claim arose out of ‘any loss of or damage to or in connection with cargo’ in the meaning of cl 27(c)(ii) of the charterparty and whether so it was subject to the Hague-Visby Rules limitation.

Held: Clause 27(c)(ii) is concerned with ‘cargo claims’. It refers only to claims sufficiently connected with cargo, that is claims (original or derivative) of the sort which are normally brought by cargo-interests (bill of lading holders), claiming loss or damage arising in relation to the cargo and measured by reference to the cargo. Claims included in this category are claims for physical loss of cargo, physical damage to cargo, and financial loss (eg a fall in value of the cargo, costs of storage and transhipment). In the case before the judge, no claim was made for loss of cargo or damage to cargo or loss in connection with cargo or damage in connection with cargo. The claimant’s claim was not a cargo claim; it was a claim for damages for loss of use of the vessel. Consequently, the charterer’s claim did not come under the Hague-Visby Rules and it was not time-barred.