Mutua General de Seguros (the plaintiff), an insurance company acting under an assignment of rights, claimed for a missing cargo of vegetable oil. On 4 September 1979, 250,000 kg of vegetable oil were loaded on the MV Medea to be carried from Hamburg, Germany, to Las Palmas, Spain. The vessel arrived at the destination on 14 September 1979. The discharge operations were finalised on 17 September and 23,090 kg of oil was reported missing. The consignee of the cargo sent a letter of claim on 29 October 1979. The plaintiff filed the lawsuit on 2 July 1981 against Transportes y Consignaciones Marítimas SA (Transcoma), and Ibérica Canaria SA (Ibérica), the cargo and ship’s agents respectively.

Transcoma and Iberica appeared in the process and alleged, among other defences, that the claim had lapsed (caducada). They argued that the final delivery of the cargo took place on 17 September 1979, while the consignee sent a written notice over a month later, and the plaintiff filed the lawsuit after the one year established by law. They acknowledged that the plaintiff had requested a conciliation process and held a meeting for that purpose on 23 July 1980, but argued that the interrupting effects of that meeting had ceased by the time of the filing of the lawsuit. The first instance Court dismissed the claim, declaring that the action had lapsed (caducada). On appeal, the decision was affirmed. The plaintiff recurred this decision on cassation before the Tribunal Supremo/Supreme Court (SC).

Held: The SC affirmed the decision. The SC stated that the of the Law of Carriage of Goods by Sea under Bills of Lading of 22 December 1949 (LCGS) governed the contract. The LCGS incorporated the Hague Rules into the Spanish legal regime. Article 22 of the LCGS establishes that in any event the carrier and the ship shall be discharged from all liability for loss or damage unless a lawsuit if brought within one year after the delivery of the goods or the date when the goods should have been delivered (art 3.6 of the Hague Rules). This period must be qualified as a lapsing period (caducidad) and not as a time limitation (prescripción). Caducidad does not admit interruption while prescripción does. This interpretation is not only based in the literal wording of the provision that establishes that an action for damages and losses is only allowed during a limited time frame. The inactivity of the claimant during such a period releases ‘in any event’ the carrier and the ship from liability. This conclusion was also supported by the decisions of the Court that have repeatedly held that the character of a lapsing period (caducidad) implies that the means for interrupting the time limitation, such as the complaint of conciliation, have no effect against it. Considering the date of the cargo delivery, and the date of the presentation of the lawsuit, it is clear that the one-year period had elapsed. This is so, regardless of the conciliation meetings held between the parties within that period.