The respondent imported 100 bags of dates from Singapore. The goods were on the appellant’s vessel, the Lin Petaling III. After the arrival of the vessel at the discharging port, Kuching Sabah, 53 bags of dates were missing. The respondent was indemnified by its insurer in the amount of MYR 1,354.20. Pursuant to the doctrine of subrogation, the respondent’s insurer filed a claim against the appellant for the loss of the goods.

It was held by the first instance court that the respondent was entitled to MYR 1,354.20 plus the interest at the rate of 8% from the date of judgment until the date of settlement as special damages.

The appellant appealed. One of the grounds of the appeal was that the first instance court was wrong in construing that cl 4(B) of the bill of lading was only applicable to the deterioration of the goods rather than the disappearance of the goods. In addition, the appellant claimed that the first instance court should have also held that there was prima facie evidence of delivery of the 100 bags of dates by the appellant to the respondent since the respondent had not given notice of the loss of the 53 bags of dates to the appellant within 3 days as required under art 3.6 of the Merchant Shipping Ordinance 1960 (based on art 3.6 of the Hague Rules).

Held: Appeal dismissed.

Clause 4(B) of the bill of lading provided that: 'Fish, fruits, vegetables and all perishable goods to be handled and carried at the sole risk of the shipper. Breakage of glass, china, castings and other goods of a bottle or fragile nature shall be taken to be due to inherent defect, quality or vice of the goods or insufficiency of packing in the absence of evidence of negligence, fault or failure in the duties and obligations of the carrier'.

By virtue of the Merchant Shipping (Implementation of Conventions Relating to Carriage of Goods by Sea and to Liability of Ship Owners and Others) Regulations 1960 (1960 Regulations), the Hague Rules was applicable to the bill of lading.

Articles 3.2, 3.8, 4.2 of the Hague Rules should be considered in this case. It would be inconsistent with art 3.2 of the Hague Rules if cl 4(B) of the bill of lading was construed to cover both the deterioration and disappearance of the goods while on board the vessel. Article 3.2 was designed to define the terms of the agreed scope of duties. Clause 4(B) would also be null and void and of no effect according to art 3.8 of the Hague Rules, since this article prevents a carrier from restricting its liability for carrying out an operation which it has agreed to perform under the contract. Therefore, once the scope of the contract has been defined by the parties, art 3.2 of the Hague Rules defines the terms of the agreed scope of duties and art 3.8 of the Hague Rules prevents the carrier from restricting its liability under the requirements of art 3.2.

In addition, art 4.2 of the Hague Rules is not wide enough to allow the appellant’s construction of cl 4 (b) of the bill of lading.

Therefore, for the foregoing reasons, it was wrong to construe cl 4(B) as a blanket protection to the appellant as a result of the total loss or disappearance of the goods. However, cl 4(B) could be used to exempt the appellant’s liability regarding deterioration of the goods by virtue of art 3.1.c of the Hague Rules.

As to the appellant’s notification argument, the court found that the 3 days notification requirement in art 3.6 of the Hague Rules is not a time limitation provision. Therefore, provided the respondent had proved its loss, the appellant should be liable for the loss even in the absence of such notification.