Philco Ushuaia SA (the shipper) entered into an agreement with the shipowner of the Gladiator (the carrier) for the transport of 15 containers carrying tubes and deflection coils used in the manufacture of colour television from Los Angeles, USA, to Ushuaia, Argentina. The containers were transported on deck, as was authorised by the bill of lading. Eight containers went missing during the voyage as a result of the vessel being hit by Hurricane Lester. La Buenos Aires Cía Argentina de Seguros SA, the insurer of the cargo (the insurer), indemnified the shipper for all damages suffered in connection with the loss of cargo and filed a claim against the carrier for the reimbursement of the amount paid to the shipper.

The National Court of Appeals in Federal Civil and Commercial Matters (Court of Appeals) reversed the judgement issued by the Court of First Instance and denied the insurer’s claim based exclusively on arguments under domestic law.

The insurer filed an extraordinary appeal against the decision of the Court of Appeals claiming, amongst other things, that the clause whereby the parties established that the cargo could be transported on deck was contrary to the Hague Rules, and should therefore be considered void.

Held: The Supreme Court upheld the Court of Appeals' decision. It stated that the agreement between the insurer and the carrier was an international agreement, since the bill of landing was issued in one jurisdiction (USA) and the goods were carried across to another jurisdiction (Argentina). And, since the USA is a contracting State under the Brussels Convention of 1924, the bill of lading falls within the scope of art 10 of the Hague Rules.

However, considering that: (a) the bill of lading allowed for 'on deck' shipment; (b) the carrier did in fact transport the cargo on deck; and (c) the Hague Rules excludes such types of shipment from its scope (art 1.c, Hague Rules), providing no conflict of laws provision with which to govern such types of shipment, the Supreme Court concluded that the parties had agreed on a special set of rules specific to their particular relationship, and therefore the bill of lading did not contradict the Hague Rules, but instead fell outside their scope, and should therefore not be considered void.