El Greco (Australia) Pty Ltd (El Greco) loaded a 20 ft container of posters and prints destined for Aigion, Greece, onto the MSC Melbourne at Port Botany, Sydney, for transport to Antwerp, Belgium. The container was transhipped and loaded onto the Aquitania at Antwerp for shipment to Piraeus, Greece, where it was unloaded and transported by road to Aigion.

Mediterranean Shipping Co SA (MSC) issued a sea carriage document entitled a 'Bill of Lading' for the shipment. It identified the shipper as El Greco and the consignee as Mr Theodorakopoulous. The document described the goods as '200945 pieces posters and prints' and enumerated the packages as '1'. Clause 1 provided that it had effect subject to the Hague Rules, the Hague-Visby Rules and the Protocol signed at Brussels on 21 December 1979 (the SDR Protocol). Clause 21 provided that '[w]here the goods have been packed into containers by or on behalf of the Merchant, it is expressly agreed, that such container shall constitute one package for the purpose of the application of limitation of the Carrier's liability'.

At Aigion, the container was opened. Most of the cargo was found to be damaged by moisture and subsequently dumped. El Greco claimed that the loss or damage occurred during the period of MSC's responsibility for the cargo. MSC disputed this assertion and denied El Greco's right to sue for the loss.

Held: MSC was liable for the damage. The goods were damaged by seawater during the voyage. The package limitation in art 4.5 of the Hague-Visby Rules was not to be calculated by reference to one container.

The 'amended Hague Rules' have the force of law in Australia (s 8 of the Carriage of Goods by Sea Act 1991 (Cth) (COGSA)). The text is set out in Sch 1, as modified by the schedule of modifications, Sch 1A. The unmodified text of Sch 1 is the translation of arts 1-10 of the Hague Rules, as amended by arts 1-5 of the Visby Protocol and art 2 of the SDR Protocol (s 7 of COGSA). The period of responsibility under the Hague-Visby Rules is enlarged by the Carriage of Goods by Sea Regulations 1998 (Cth).

Article 3.3.b of the Rules provides that the carrier is to issue to the shipper a sea carriage document showing '[e]ither the number of packages or pieces, or the quantity, or weight, as the case may be, as furnished in writing by the shipper'.

The sea carriage document that MSC issued was a 'sea waybill' under the Sea-Carriage Documents Act 1996 (Qld), s 3. It acknowledged receipt of

the containers other packages or units bearing marks and/or numbers indicated in the 'Carrier's Receipt' above, said to contain the quantity of goods, weights and measurements indicated in the 'Particulars furnished by the Shipper …' in apparent external good order and condition.

The document also contained the contract of carriage. It was not a bill of lading, as it was not capable of transfer.

Article 4.5.c of the Rules suggests that, as a general rule, a container is to be considered a package or unit. Article 4.5.c also overcomes a language difficulty in equating a container with a package, which existed prior to the Visby amendments (see River Gurara v Nigerian Shipping Line Ltd [1998] QB 610, 617-618 (CMI819)).

A shipper can enumerate the number of packages or units as packed in it to signal otherwise. A sea carriage document which is said to contain a number and description of packages (eg 20 packages) or units of cargo (eg 20 crates of typewriters) within a container will sufficiently enumerate the packages or units of cargo within the container. The reference for the calculation in art 4.5.c of the Rules will be taken from the packages or units as identified. Accordingly, the container will not be taken as the package or unit for the purpose of the calculation.

The description of the cargo in the sea carriage document as 'pieces' and 'posters and prints' did not refer to either packages or units. El Greco relied on the classification of pieces as units rather than packages. MSC did not suggest that the packaging of the pieces should influence the determination as to whether the individual posters and prints can be units within the meaning of the rule. It did not follow that whatever is not a package is a unit. A 'unit' refers to an individual piece of cargo (see Falconbridge Nickel Mines Ltd v Chimo Shipping Ltd [1973] 2 Lloyd's Rep 469, 476 (CMI942)). A unit of goods is legally distinct from the 'customary freight unit' as utilised in legislation in the United States (see Falconbridge 475-476).

The container will be taken as the package or unit if it is said to contain 'general merchandise' without enumeration. The description 'posters and prints' arguably refers to general merchandise, even if they are enumerated. However, the insertion of the word 'pieces' suggests that the posters and prints are to be treated as individual pieces, or units, of cargo. Its enumeration also disqualifies the container as the 'unit' for the purposes of art 4.5 of the Rules.

The goods were to be valued at AUD 63,570. The evidence of the value at the port of discharge was inadequate, and so reference should be taken from the value of the goods in Australia. Where there is no current market price, art 4.5.b of the Rules permits the value of the goods to be fixed by reference to the 'normal' value of the goods. The method of calculating the value of the national currency was in terms of a Special Drawing Right, as applied by the International Monetary Fund.

Clause 21 was null and void by reason of art 3.8, which provides that '[a]ny clause which lessens the liability of the carrier or the ship from liability, otherwise than as provided in the rules, shall be null and void and of no effect'.

[For the appeal and cross-appeal to the Full Court of the Federal Court, see El Greco (Australia) Pty Ltd v Mediterranean Shipping Co SA [2004] FCAFC 202 (CMI1).]