Minmetals South-East Asia Corp Pte Ltd (the plaintiff, a Singapore company) contracted with an NVOCC, Nakhoda Logistics Sdn Bhd (the defendant, a Malaysian company), for the carriage of consignments of timber from Port Klang, Malaysia, to Shanghai, China. The consignments were made pursuant to purchase contracts with Trinity Tripartners Pte Ltd and Oriental Century Ltd and sale contracts with Shanghai Unidev. The sea carriage was performed by Yang Ming Marine Transport Corp, which issued ocean bills of lading.

The plaintiff was not paid for the sale - there were discrepancies in the L/C and no direct payment was made by Shanghai Unidev. The plaintiff made arrangements to collect the cargo upon presentation of the house bills of lading, which were still in its possession. It was later discovered that these bills bore no particulars of carriers/agents in Shanghai for the plaintiff to collect the cargo from.

Held: The plaintiff has failed to establish its case against the defendant on the balance of probabilities that the defendant has breached the contract. It was the plaintiff who failed to take delivery of the contract. Alternatively, the plaintiff's claims are time-barred.

Article 3.6 of the Hague Rules provides that suit must be brought within one year after the delivery of the cargo. Article 3.6 of the Hague Rules was referred by the Federal Court in Peninsular & Oriental Steam Navigation Co Ltd v Rambler Cycle Co Ltd (CMI670). This decision was applied by Nallini J in PT Karya Sumiden Indonesia v Oceanmasters Marine Services Sdn Bhd (CMI139) where her Ladyship held as follows: 'Based on the foregoing reasoning of the Federal Court, it would follow that article III rule 6 of the Hague Rules does not apply to or encompass misdelivery as the application of the rules ceases upon ‘discharge’ of the cargo, as opposed to delivery ... [T]he preferable view to be adopted in relation to the interpretation of article III rule 6 of the Hague Rules is that it encompass the contract of carriage from the point of loading until the point of discharge and does not extend to delivery'.

The above cases clearly establish that under art 3.6 of the Hague Rules, limitation sets in after one year from the point of discharge of the cargo. Since the cargo under the relevant bills of lading was discharged more than one year before the filing of this suit, the bills of lading are barred by limitation under art 3.6 of the Hague Rules. In this case, it is not a misdelivery, as submitted by the plaintiff. The plaintiff knew that the cargo had been discharged at the Shanghai port, but failed to take delivery and possession of the same.

[For the successful appeal to the Court of Appeal (Putrajaya), see Minmetals South-East Asia Corp Pte Ltd v Nakhoda Logistics Sdn Bhd [2018] 6 MLJ 152 (CMI323).]