A cargo of detergent powder was confiscated by customs authorities in St Petersburg, Russia, en route from Tughlakabad, India, to Moscow, Russia.

The plaintiff claimed that the defendants agreed to transport the cargo to the destination via Kotka, Finland. However, the defendants had changed the port of discharge from Kotka to Hamburg, Germany, without informing or obtaining consent from the plaintiff. This deviation caused the consignee to reject the shipment for non-compliance with the contract terms. The customs confiscated the cargo because the defendants mishandled the entire transaction. The defendants breached trust and their obligations under the Carriage of Goods by Sea Act 1925 (the Act) by failing to inform the plaintiff that they never had direct service to Moscow via Kotka. The defendants were jointly and severally liable to pay the losses and damages suffered by the plaintiff, including loss of business, reputation and goodwill, and loss of consignment.

The defendants argued, among other things, that the suit should be dismissed as time-barred. According to art 10 of the bill of lading, any suit to be instituted should be brought within 9 months from the date of the cause of action. Therefore, the suit should have been filed within 9 months from the date the goods arrived at St Petersburg (16 November 1997) or the expected date of dispatch from St Petersburg (18 November 1997). The present suit was brought in January 1999, nearly 14 months from the date of the alleged cause of action. In any eventuality, under art 3.6 of the Schedule to the Act, the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. This rule further states that notice of loss or damage, and the general nature of such loss or damage, should be given in writing to the carrier or its agent at the port of discharge, or if the loss or damage is not apparent, within 3 days. In the present case, the notice was given on 10 September 1998, nearly 10 months after the date of the alleged cause of action.

Held: Suit dismissed.

Under art 3.6 of the Schedule to the Act, the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. Article 3.6 shows that there are two situations contemplated. In the first situation, the goods are delivered, in which case the suit ought to be brought within one year of the delivery. The second case would be when the goods are not delivered, in which case the suit ought to be brought within one year from the date when the goods should have been delivered.

In this case, the goods should have been delivered in Moscow. However, they were never delivered there and were instead confiscated in St Petersburg. Hence, the first condition under art 3.6 would not apply. The defendants had the onus to prove that the suit was barred by limitation. They have not shown that there was any date on which the goods should have been delivered.

The delivery process continued until 6 February 1998, when the defendants informed the plaintiff of the confiscation of the goods. If the goods had not been confiscated, the delivery would have been made only after this date. Even if this date is taken as the date when the goods should have been delivered, the suit, having been filed in January 1999, was well within the limitation of one year under art 3.6 of the Schedule to the Act.

It was clear that, initially, as per the contract, the defendants were to deliver the goods to Moscow via Kotka. However, by their conduct, the parties agreed and acquiesced that the goods would be sent to Moscow via St Petersburg from Hamburg.

On a balance of probabilities, the cargo was confiscated due to the consignee's default. Therefore, the charges for the release of the cargo could not be recovered from the defendants, and the plaintiff would not be entitled to seek any damages or compensation from the defendants for any loss suffered by it on account of the confiscation of the cargo.