This was a cargo claim regarding a shipment of domestic and industrial sewing machines and other parts from India to Dubai, UAE, on the Orient Stride under a bill of lading. While destuffing the container, it was noticed that part of the consignment had been badly damaged. The plaintiff's suit was filed more than two years after the alleged damage to the consignment took place. The petitioners applied for dismissal of the suit, pleading limitation.

The petitioners' application was initially dismissed on the ground that the question of limitation was a mixed question of law and fact, and should thus be treated as a preliminary issue.

The petitioners contended that limitation would be governed by the provisions of the Multimodal Transportation of Goods Act 1993, which prescribed the period of limitation as 9 months from the date of delivery of goods or the date when goods should have been delivered. In the alternative, under the Indian Carriage of Goods by Sea Act 1925 (COGSA), the carrier and the ship are discharged from all liability in respect of loss or damage unless suit is brought within one year after the delivery of goods or the date when the goods should have been delivered.

To buttress their arguments, the petitioners relied on East & West Steamship Co v SK Ramalingam AIR 1960 SC 1058:

It is useful to remember in this connection the international character of these rules, as has been already emphasized above. Rules of limitation are likely to vary from country to country. Provisions for extension of periods prescribed for limitation would similarly vary. We should be slow therefore to put on the word[s] 'discharged from liability' an interpretation which would produce results varying in different countries and thus keeping the position uncertain for both the shipper and the ship-owner. Quite apart from this consideration, however, we think that the ordinary grammatical sense of 'discharged from liability' does not connote 'freed from the remedy as regards liability' but are more apt to mean a total extinction of the liability following upon an extinction of the right.

The issue is whether limitation is to be governed by COGSA, or in the alternative by the provisions of the Limitation Act 1963 (the Limitation Act)?

Held: COGSA applies. The claim is time-barred.

Clause 6 of the bill of lading provides:

1. Clause Paramount A. Subject to Clause 13 below, this Bill of Lading, insofar as it relates to sea carriage by any vessel whether named herein or not, shall have effect subject to the Hague Rules or any legislation making such Rules or the Hague-Visby Rules compulsorily applicable (such as COGSA or COGWA) to this Bill of Lading and the provisions of the Hague Rules or Applicable Legislation shall be deemed incorporated therein. The Hague Rules (or COGSA or COGWA if this Bill of Lading is subject to US or Canadian Law respectively) shall apply to the carriage of Goods by inland water ways and reference to carriage by sea in such Rules or Legislation shall be deemed to include reference to in land water ways. If and to the extent that the provisions of the Harter Act of the United States of America 1893 would otherwise be compulsorily applicable to regulate the Carrier's responsibility for the goods during any period prior to loading on or after discharge from the vessel the Carrier's responsibility shall instead be clause 6(3) below, but if such provisions are found to be invalid, such responsibility shall be subject to COGSA.

The other relevant clause of the bill of lading is cl 6(4)(G):

The Carrier shall be discharged of all liability unless suit is brought in the proper forum and written notice thereof received by the carrier within nine months after the delivery of the goods or the date when the goods should have been delivered. ...

It appears that the Court below did not notice this clause which clearly was printed on the back of the bill of lading and therefore committed a manifest error in concluding that the suit, having been filed within 3 years of limitation prescribed under the Limitation Act, was maintainable. Clause 6(1)(A) makes it amply clear that the bill of lading is subject to COGSA. According to s 4 of COGSA, therefore, limitation has to be governed by art 3.6 of the Hague Rules.

Liability for claims regarding transportation of goods by sea stands extinguished upon expiry of one year from the date of delivery of goods in the ordinary course, unless the same is extended by three months. In any case, the claim stood extinguished at the most after 15 months, whereas here the suit was filed after a lapse of 2 years.

The suit is therefore dismissed, being barred by limitation.