The plaintiff was the owner of goods in 16 containers shipped on the Leverkursen Express for carriage in mid-1993 from Hong Kong to Hamburg under 11 bills of lading issued by the defendant. The plaintiff claimed against the defendant for the non-delivery of the goods. It was common ground that the vessel arrived in Hamburg some time in 1993 but the defendant released the 16 containers without the production of the original bills of lading or to persons not entitled to receive the containers. A shipowner 'who delivers without production of the bill of lading does so at his peril' (Sze Hai Tong Bank v Rambler Cycle Co [1959] AC 576).

The plaintiff had sold the goods to the buyer Tegro (the first third party) by way of letters of credit but the documents were rejected and there were attempts to obtain payment. Eventually the plaintiff had to rely on the bills of lading. When they were presented to the defendant for the delivery of the goods in May 1994, the plaintiff was told that the goods were gone. On 20 June 1994 the plaintiff issued the writ of summons. In 1995 the defendant sought and was given leave to issue third party proceedings against four separate parties:

• Tegro, (first third party) the buyer of the goods from the plaintiff who obtained possession of the goods without production of the bills of lading.
• The second third party and third third party were the freight forwarders whose agent, the fourth third party, obtained delivery of the goods and released the goods to Tegro without the production of the bills of lading.
• The fourth third party, who was the Hamburg handling agent of the third third party.

The first third party defaulted in acknowledging service of the third party notice and was out of the picture. The second, third and fourth third parties disputed jurisdiction.

The defendant sought to escape liability by relying on a none-month contractual defence and the one-year Hague-Visby Rules limitation defence and made an application for an order that the question of limitation defences be tried first.

Held: Application dismissed.

As a matter of case management and as an exercise of discretion it is not just and convenient to make the requested order of separate trials. In relation to costs, there is doubt as to the scope of the oral evidence and what directions the Court should give on witness statements if a separate trial is ordered. One example of the difficulty is that under both the nine-month limitation defence of cl 23 and under the 12-month limitation defence under art 3.6 of the Hague-Visby Rules, the question of the time when each container should have been delivered is vital for the calculation of whether the claim in relation to that container might be time-barred. The considerations on costs are further weighed against the defendant because of the uncertainty of the law. There is much learned literature on the matter of contractual shorter time limits being in conflict with the Hague-Visby Rules. In the absence of any binding authoritative statement from the highest court, it is likely that the first instance judgment after the separate trial on the limitation defences would have to be resolved, first by the Court of Appeal, and then by the Court of Final Appeal. Instead of costs being saved, the parties may well find that, as a result of the separate trial, more costs will be incurred. This involves not just additional costs but additional time and delay.

In the event, if the defendant failed on the two limitation defences after the matter had been contested all the way to the Court of Final Appeal, the plaintiff would suffer greatly by the delay caused by a separate trial ordered by the Court. Even on the best case of the defendant, seven containers or five bills of lading would not be caught by the Hague-Visby Rules 12-month limitation defence. There is no certainty or even a very strong likelihood that the defendant will succeed on the nine-month contractual defence. The Court is being asked to take a risk on this application. The Court should decline to take this risk. It is a recipe for injustice and inconvenience.