The plaintiff, a Cyprus bank, claims CYP 20,886.05 and interest for loss or damage suffered by the non-delivery of eight containers of soybeans. The first defendant is an Israeli company engaged in maritime transport.

Kyriakos Andreou Ltd asked the plaintiff to issue two documentary credits worth CYP 22,800 and CYP 20,700 respectively in favour of the Israel Export and Trust Corp Ltd from Tel-Aviv to import 60 tonnes of soybeans in each instance. The plaintiff opened the two documentary credits. Israel Export and Trust Corp Ltd presented the letters of credit to its bank, Bank of America International New York, and received payment. The plaintiff informed Kyriacos Andreou Ltd of the payments and charged its account.

The goods were dispatched to Cyprus in two consignments. They arrived in Limassol on 19 August and 10 October 1981 respectively. The containers were delivered directly to Kyriakos Andreou Ltd despite the fact that the plaintiff held the bills of lading. Kyriakos Andreou Ltd and its guarantors failed to pay the plaintiff. On 11 November 1982, the plaintiff brought an action against Kyriakos Andreou Ltd and the present defendants in the District Court of Nicosia. On 7 April 1984, the District Court of Nicosia issued judgment against Kyriakos Andreou Ltd and its guarantors. However, since the District Court of Nicosia has no jurisdiction in maritime matters, the suit against the present defendants was withdrawn on 14 June 1986.

Before the Supreme Court, the defendants argued that (1) the plaintiff's claim had merged into the judgment of the District Court of Nicosia, and (2) the plaintiff's claim was time-barred.

Held: Argument (1) rejected; argument (2) upheld.  

As to argument (1) the Court held that the underlying cause of action in the District Court case was a debt under the credit arrangement, whereas the basis of the present action was the breach of a contract for the carriage of goods and their conversion. Charging the account of the person to whom the goods had been delivered on the basis of credit facilities, unless paid, did not eliminate or affect the liability of the first defendant as carrier.

As to argument (2), the provisions of the Carriage of Goods by Sea Law, Chapter 263, which make the Hague Rules applicable to the carriage of goods by sea on ships from a port in Cyprus to a foreign port or between ports in Cyprus, did not apply. In the present case the transfer was from a port outside the Republic to a port of the Republic. However, cl 3.1 of the relevant bills of lading contractually incorporated the Hague Rules, and cl 15 of the bills of lading expressly mirrored art 3.6 of the Hague Rules in providing for a one-year limitation period. 

The plaintiff was the consignee of the cargo in the two containers. It knew the delivery time, and/or the time that the goods ought to have been delivered. It paid the value of the goods to the consignors via a foreign bank. It charged the client account of Kyriakou Andreou Ltd. It submitted the action to the District Court in 1982. This case was filed on 20 July 1984, much later than the one-year period provided for in cl 15 of the bill of lading and art 3.6 of the Hague Rules.

After one year the first defendant as carrier was relieved of any liability because no claim was filed. 'Suit' means an action before the competent court. The filing of an action in an inappropriate court and its withdrawal are of no effect in suspending the limitation period.