The plaintiffs claimed damages in respect of alleged wetting to their cargo of steel coils carried on the Sea Maas from Newport, Wales, to Anzio and La Spezia, Italy, under 13 separate bills of lading. The bills of lading contained a general paramount clause incorporating the Hague-Visby Rules. The plaintiffs were four different Italian consignees. The defendant was the owner or demise charterer of the vessel.

The issue was whether the plaintiffs must sue the defendant in Holland, where it was domiciled, or could litigate in England.

The plaintiffs' case was that they have successfully arrested the vessel not once, but, in order to meet objections by the owners, twice, in an English action in rem, and that they had therefore established jurisdiction in England under art 7 of the Arrest Convention 1952.

The defendant contended that the plaintiffs could not bring themselves within art 7 of the Arrest Convention 1952 and must, therefore, fail to sustain jurisdiction in England unless they could bring themselves within art 5.1 of the Brussels Convention on Jurisdiction and the Enforcement of Judgement in Civil and Commercial Matters 1968 (the Brussels Convention 1968).

The plaintiffs submitted that the principal obligation in question was the obligation under art 3.1 of the Hague-Visby Rules that 'the carrier shall be bound before and at the beginning of the voyage to exercise due diligence' to make the ship seaworthy and the holds fit and safe for the cargo's reception, carriage, and preservation. In this case that obligation fell to be performed at the port of loading, Newport. There was, therefore, jurisdiction in the courts of England and Wales. In as much as there was also an obligation under art 3.2 of the Hague-Visby Rules to carry and care for and discharge the cargo in good order and condition, this was to be regarded as a principal obligation too. The plaintiffs should have an option to choose jurisdiction in the place where either principal obligation fell to be performed.

The defendant submitted that the principal obligation was the duty to deliver the goods carried under the bills of lading in the like good order and condition as when shipped. That was the fundamental obligation of contracts of carriage by sea, as was demonstrated by the language of the 'shipped ... in apparent good order' clause on the face of the bills. It was also the obligation mentioned first and foremost in the plaintiffs' statement of claim. It made good sense to have a single, clear, simple rule which could be applied in every case of a bill of lading contract, that a special jurisdiction could be founded at the Courts for the port of discharge. That would tend to enable consignees to sue in their own jurisdiction, which would make good sense as an alternative to the jurisdiction of the domicile of the shipowner mandated by art 2 of the Brussels Convention 1968.

Held: The plaintiffs are entitled to found jurisdiction in England.

There is no authority either in England or in the European Court of Justice which decides how art 5.1 of the Brussels Convention 1968 operates in the context of a bill of lading cargo claim. This may well demonstrate that most such cases are brought within the Arrest Convention 1952.

The 'obligation in question' cannot be interpreted as referring to any obligation whatsoever arising under the contract in question, but is rather that which corresponds to the contractual rights on which the plaintiffs' action is based.

It is an error to characterise a cargo damage claim under a bill of lading incorporating the Hague-Visby Rules or Hague Rules as one based on an obligation to discharge goods in the same good order and condition as when loaded. That is to reflect the language of bailment. The fundamental obligation under a Hague or Hague-Visby Rules contract of carriage, however, is not the obligation to keep and return cargo (subject to proof that any loss or damage has occurred without fault), but the obligation to exercise due diligence.

It follows that everything will depend on the nature of the bill of lading holder's claim. If the fundamental matter of complaint is that the shipowner never provided a seaworthy vessel, the place of performance of the obligation of question would be at the port of loading.

The defendant submitted that there may be breach of the obligation under art 3.1 of the Hague-Visby Rules, to exercise due diligence to make the ship seaworthy, but no damage: the failure of due diligence only becomes relevant at the discharge if damage has occurred. Rix J stated that the defendant mistook the issues of breach and damage. There must be many situations where the contractual breach is of an obligation which falls to be performed at one place, whereas the damage consequential on that breach takes place at another place or, with luck, never takes place at all.

Although the plaintiff's pleadings begin with art 3.2 of the Hague-Visby Rules, the gravamen of the complaint is that 'the hatch covers to the holds in which the Anzio cargo and/or Spezia cargo were carried were not watertight and/or were not properly battened down during or at the commencement of the voyage to Anzio and/or Spezia thereby allowing seawater to enter the holds'. That leads naturally to the complaint under art 3.1 of the Hague-Visby Rules that the shipowners failed to exercise due diligence to provide a seaworthy ship or holds fit for the cargo.

Therefore, the 'obligation in question' upon which the plaintiffs' claim was based was the failure to use due diligence to provide a seaworthy ship at the commencement of the voyage, and the plaintiffs were entitled on that ground to found jurisdiction in England.