Citrona BV claimed for damage to a cargo of oranges carried from Alexandria, Egypt, to Rotterdam, The Netherlands, on the MV Beniali, owned by Naviera de Exportación Agrícola SA (the defendant). The ship arrived at the destination on 28 January 1976, and the discharge operations were finalised the day after. A substantial part of the cargo was reported as damaged. The plaintiff immediately submitted a protest. On 27 January 1978, the lawyer of the defendant’s insurer sent a letter granting an extension of the period to file a lawsuit until 28 April 1978. The plaintiff filed a request for conciliation, and the parties held a meeting for that purpose on 11 May 1978, but the lawsuit was filed on 13 July 1978.

The defendant appeared in the process and rejected liability alleging, among other defences, that the agreement to extent the period to bring suit had no interrupting effect of the one-year time bar, meaning that the action had elapsed (caducada). The first instance Court rejected this defence, stating that such a period was a time limitation (prescripción), and that the parties' agreement interrupted it. However, the Court dismissed the claim as there was no evidence of negligence on the part of the carrier or the master. On appeal, the Court of Appeals held that the one-year period stated in art 22 of the Law of Carriage of Goods by Sea under Bills of Lading of 22 December 1949 (LCGS), was a lapsing period (caducidad) that does not allow for interruption. Hence, the action had elapsed. The LCGS incorporated the Hague Rules into the Spanish legal regime. The plaintiff recurred this decision on cassation before the Tribunal Supremo/Supreme Court (SC), based on three arguments. First, the LCGS did not apply to the claim because art 24 provides that it only governs carriages between nations that have ratified the Hague Rules. Hence the Code of Commerce (CCom) was applicable. Article 952.2 of the CCom establishes a lapsing period (caducidad) to submit a protest and a limitation period (prescripción) to file a lawsuit. As the protest was submitted on time, the plaintiff was entitled to file an action for damage within one year as it is a time limitation (prescripción) that allows interruption by the regular means. Second, if art 22 of the LCGS (art 3.6 of the Hague Rules) is applicable and the one-year period to bring suit is held to be a lapsing period (caducidad), there was no legal provision that deprived the parties of suspending or extending this period. Hence, any agreement between the parties in that regard cannot be held as null and void. Third, art 10 of the LCGS (art 3.8 of the Hague Rules) prohibits any clause that excludes or lessens the carrier's liabilities. But, by contrast, art 13 of the LCGS (art 5 of the Hague Rules) admits the validity of agreements by which the carrier surrenders its rights and immunities and improves or ameliorates the position of the shipper or consignee. Therefore, the decision denying value to the agreement extending the one-year period benefits the carrier, violates these provisions, and hampers the judicial solution of the claim.

Held: The SC affirmed the decision. The SC confirmed that the one-year period to bring suit stated in art 22 of the LCGS was a lapsing period that does not allow for interruption. The plaintiff assumed, explained the SC, that the negotiations held between the date of the discharge of the cargo and the date of filing the complaint had an interrupting effect if that period was considered as a time limitation (prescripción). But such interruption is not admissible in the cases of lapsing periods. For these cases, the legislator, attending to reasons of general interest such as the prevention of situations of uncertainty in juridical acts, only grants expiring effects to the objective inactivity of the rights holder. This is different in cases of time limitation. For these cases, the legislator deemed that these interests have a lower impact in the community and only considers the subjective point of view of a presumption of a waiver of rights. Therefore, the decision of the Court of Appeal was correct. It was not only based on the literal wording of the provision that establishes that an action for damages and losses is only allowed during a limited time frame and that inactivity during such a period releases the carrier and the ship, ‘in any event’, from liability. That conclusion was also supported by the decisions of this Court that have repeatedly stated that the character of a lapsing period (caducidad) implies that the means for interrupting the time limitation has no effect against it. From the date of the discharge of the cargo to the date of the lawsuit, the one-year period had excessively expired. Regarding the second argument, the SC agreed that, based on the principle of the autonomy of the parties, an extension of that period does not contradict the law, morals or public policy. However, the agreed extension cannot produce the effects alleged by the plaintiff. Regardless of whether the extension was granted by the insurer's lawyer without evidence of whether it was authorised for that act, it cannot be ignored that by 27 January 1978, when the letter was sent, the right to file suit was already extinguished. It is known that an elapsed period cannot be subject to an extension. The third argument was rejected for the same reasons.