One of the first appellant/carrier's ships, the MV Weissenfels, landed a consignment in Karachi on 11 June 1962 in a damaged condition. The consignee was a textile mill, and the consignment was insured with the respondent. The consignee learned of the damage immediately on arrival and had the damaged cargo surveyed. It received delivery of the damaged cargo and had another survey at its godown. The respondent paid the consignee PKR 13,700.

The respondent then presented its claim to the second appellant, which was the local agent of the first appellant. Considerable correspondence ensued between the parties, and the respondent was informed that the period of limitation for filing a suit had, by agreement, been extended to 17 September 1963, but by its letter dated 5 June 1963, the second appellant informed the respondent that its claim had been repudiated.

The respondent filed a suit on 1 July 1964 against the appellants in the Court of a Civil Judge, Karachi. As the damage to the consignee's cargo was discovered on 11 June 1962, the suit was filed nearly two years later. However, the respondent argued that the appellants were putting off the question of settlement of claim under the pretext that the same was under consideration of their principals and for that purpose they have been extending the time for filing the claim until 5 June 1963, when the appellants repudiated their liability.

As the District Court of Karachi was closed for its summer vacation in the month of June 1964, the respondent filed the suit on 1 July 1964, the re-opening day of the Courts. The appellants filed a joint written statement repudiating liability for the damage on the ground that it had been caused by the perils of the sea. They further pleaded that the suit was barred by limitation, and that it was also barred under art 3.6 of the Schedule to the Carriage of Goods by Sea Act (the Act).

The Judge held that the appellants were not liable for the damage to the consignee's cargo, because it had been caused by perils of the sea, and he also held that the suit was time-barred. Accordingly, he dismissed the respondent's suit, but also observed that the respondent had produced no evidence 'to prove the value of the goods in suit'. The respondent appealed in the District Court, which appeal was heard and decided by an Additional District Judge. The Additional District Judge held that as the appellants had extended the period of limitation 'up to 17th September 1963, the suit, which had been filed on 1st July 1964, was within time'. Further, reversing the view of the trial Court, the Additional District Judge held that the damage to the consignment insured with the respondent had been caused by the negligence of the first appellant. But, whilst the respondent's claim was for PKR 14,700, the Judge decreed it in the sum of PKR 11,500 with costs and interest. The appellants filed a second appeal in this Court

Held: Appeal allowed with costs; the judgment and decree of the trial Court to be restored, and the judgment and decree of the first appellate Court to be set aside.

The appellants had pleaded the bar both of limitation and of art 3.6 of the Act. The difficulty is that the Act does not apply in terms to cargo shipped to Pakistan from a foreign country. But art 3.6 of the Act is identical to the corresponding provision in the Hague Rules, and as the bill of lading, under which the consignment was shipped, contained a clause that the contract of affreightment was governed by the Hague Rules, the respondent submitted that it was entitled to rely on art 3.6 as a matter of contract; therefore, in view of the Gold Clause Agreement, the suit was within time.

If this rule is construed as a period of limitation, the alleged Gold Clause Agreement on which the respondent attempted to base its case would be hit by s 3 of the Limitation Act 1908. But the position would be quite different if the said rule is construed to be a period of prescription, and not of limitation. In Chowdhury v The Muhammadi Steamship Co Ltd PLD 1961 SC 340 their Lordships held that the rule was a period of limitation and as a period of limitation cannot be extended by agreement. But, whilst parties cannot extend limitation by agreement, a plaintiff can always claim the benefit of the provisions for extension of time under the Limitation Act. However, the letters written by the appellants in the instant case neither amounted to an agreement to pay the respondent its claim, nor to any representations or estoppels, and this means that the suit was time-barred by exactly one year.

Further, according to the trial Court, the respondent had not produced any evidence to prove the loss suffered by the consignee. The respondent neither gave evidence of the market price of the goods imported nor any evidence to show that these goods did not have a market. The respondent submitted that the value of the goods had been proved through the bill of lading issued by the first appellant, which contained an entry for the description of the packages and goods shipped which read: 'Hydrolit (Chemical, yarn humidifying and preserving agent) as per pro forma Invoice of suppliers, dated 31-1-1962'.

The respondent's argument was that as the invoice was referred to in the bill of lading, it was part of it, so that the value declared in the invoice was the value declared in the bill of lading. The submission is frivolous, because the reference to the invoice in the bill of lading is with regard to the description of the goods in the bill of lading. Under art 3.3 of the Act, the carrier is required under cl (a) to state on the bill of lading the leading marks of the cargo shipped provided they are legible. It is required under cl (b) of the rule to state the number of packages or their weight, and under cl (c) to state the apparent order and condition of the cargo received by it. Art 3.4 reads: 'Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraph 3 (a), (b) and (c)'. Whilst art 3.4 creates a presumption about the declarations required to be made under art 3.3, art 3.3 does not impose any obligation to declare the value of the goods shipped, so that there is absolutely no evidence of the loss suffered by the consignee. The appellants clearly objected to the amount of compensation claimed by the respondent. The result was that the respondent had to prove its claim, and assuming without conceding that the claim could be proved through the shipper's invoice, then the failure to prove this invoice amounted not merely to negligence but to gross negligence.