The plaintiff was the shipper of batches of plastic toys under a contract of carriage evidenced by two bills of lading. The defendant was the carrier who issued the bills of lading. The plaintiff commenced action against the defendant and alleged, amongst other things, that the defendant was obliged to deliver cargo only on the production of original bills of lading.

The defendant filed a summons to preliminarily determine three issues of law, namely: (i) whether the terms on the reverse side of the bills of lading were incorporated into the contract of carriage; (ii) whether the defendant was subject to an implied obligation to deliver the cargo only against production of original bills of lading; and (iii) whether the plaintiff's claim ws time-barred.

Held: The Court found the facts unsuitable for a preliminary determination and dismissed the defendant’s application.

First, the disposal of the claim would require the Court to make a finding on the terms incorporated into the contract of carriage. This was difficult because the Court would need to embark on a detailed analysis of the facts, in particular, the prior dealings, business arrangements as well as agreements between the parties. As there was no oral and documentary evidence available pertaining to the matters mentioned, this issue was unsuitable for preliminary determination and should be left to be heard at trial.

Second, by virtue of the Carriage of Goods by Sea Ordinance (Cap 462), there is no dispute that the Hague-Visby Rules applied compulsorily. Thus, in relation to the issue of limitation period, the parties, by virtue of the operation of art 3.8 of the Rules, will be bound by the relevant provisions of the Rules regarding the limitation period regardless of whether the express provisions on the limitation period appearing at the back of the bills were found to be incorporated. Given the governing effect of the Rules, the plaintiff did not seek to dispute that it had not instituted the claim within the limitation period of one year under art 3.6 of the Rules. However, the plaintiff argues that the time limit was extended by agreement of the parties after the cause of action had arisen. It is necessary that oral evidence be adduced before the Court is able to properly adjudicate on this.

Third, the bone of contention in this case is essentially whether the defendant was entitled to deliver the goods without production of any originals of the bills. A literal reading of cl 3.2 appearing at the reverse side of the bills does seem to exonerate the defendant from any wrongdoing as the bills in question are described to be non-negotiable or 'straight' bills, which permit a carrier to release goods to a named consignee without the requirement of the production of the original of a bill of lading. Indeed, this argument by the defendant finds support from Waung J in the Hong Kong case of The Brij [2001] Lloyd’s Rep 431.

This issue may have been more straight forward had Stone J in Carewins Development (China) Ltd v Bright Fortune Shipping Ltd [2006] HKCFI 860 (CMI1136) also shared the same view as Waung J in The Brij. The learned Judge, however, agreed with Voss v APL Co Pte Ltd [2002] 2 Lloyd’s Rep 707, a decision of the Singapore Court of Appeal, which held that a carrier in such circumstances would be required to deliver the cargo only against presentation of the original of a bill of lading.

In light of the two conflicting first instance decisions, the law on this issue regarding the carrier’s obligation to deliver goods against presentation of documents is still in a state of flux. It would not be appropriate for the Court to summarily determine this question of law without hearing evidence on matters such as the prevailing commercial practice in sea carriage, the previous course of dealings, the inferred/imputed intention of the parties and so forth.