This was an appeal against the judgment and decree of a Subordinate Judge in favour of the plaintiff, the People's Republic of Bangladesh, represented by the Chairman of the Bangladesh Railway Board, Chittagong, for BDT 13,650.03 with costs from the first defendant, Hellenic Lines Ltd, and its local agent. On 18 February 1969 the first defendant entered into a contract of carriage with the supplier, Economics Laboratory Inc of New York, for transport of one consignment of cleaning compound from New York to Chittagong. The bill of lading was made out in the name and order of the National Bank of Pakistan as per the terms of the letter of credit opened in the name of the supplier.

The consignment was taken onto the defendant's ship, the SS Hellenic Splendor. This ship did not come to Chittagong, but of the 78 drums, 16 drums arrived at Chittagong per the SS Clan Grant and the balance of 62 drums were carried by the SS Ocean Princess belonging to the Maldivian National Trading Corp. After observing customs formalities the plaintiff took delivery of the 16 drums carried by the SS Clan Grant. The remaining 62 drums on the SS Ocean Princess were found to be in a damaged condition as most of the steel drums containing liquid chemical had been leaking and some cardboard drums containing powder chemical were torn. The plaintiff requested a ship survey within 24 hours. The local agent, however, only allowed a joint survey to be held within 4 days. A claim was then made. The first defendant did not revert. The first defendant argued that the drums sustained further damage during the long period when they were lying under the care and custody of the port authorities. The first defendant carrier was thus not liable. It was provided in the bill of lading that: 'The carrier shall not be liable in any capacity whatever for any delay, nondelivery, misdelivery, loss of, or damage to the goods occurring while they are not in the actual custody of the carrier'.

The trial Court found in favour of the plaintiff. The defendants appealed.

Held: The appeal is dismissed.

The defendants argue that since the carrier was at liberty to tranship the cargo into any other ship for forwarding to the port of discharge, and since it was provided in the bill of lading that the 'carrier shall not be liable in any capacity whatever for any delay, nondelivery, misdelivery, loss of, or damage to the goods occurring while they are not in the actual custody of the carrier', the defendants are not liable under any circumstances for any damage caused to the cargo while it was in the on-carrying ship. The plaintiff counters by relying on the decisions in the cases of East & West Steam Ship Co v Hossain Bros (CMI846) and other cases. Plaintiff's counsel also referred to arts 3.2, 3.3 and 3.8 of the Hague Rules.

Hellenic Lines Ltd undertook to convey the consignment in question from the port of lading, ie New York, to the port of discharge, ie Chittagong. If the first defendant through its agent made any transhipment it is for its own convenience but its liability does not cease until the goods are reached in good condition at the Chittagong Port. The carriage of goods continues under the same risk and obligation to the cargo owner during the substituted transport as it would have been under if the conveyance had been continued in the first defendant's own ship.