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. The plaintiff’s claim against the defendant in the High Court for contractual damages of USD 13,591,622.62 for misdelivery was unsuccessful as it was held to be time-barred (see Minmetals South-East Asia Corp Pte Ltd v Nakhoda Logistics Sdn Bhd (CMI899). The plaintiff appealed.

This appeal involved the applicability of the one-year time bar in art 3.6 of the Hague Rules to claims for the non-delivery of cargo, which would entail a consideration of arts 2 and 1.e of the Hague Rules. Article 2 sets out the scope and applicability of the Hague Rules and excludes limitation for time and liability limits in respect of cases relating to the delivery of cargo; and art 1.e provides the coverage of the Hague Rules over 'the period from the time when the goods are loaded on to the time when they are discharged from the ship'.

Held: The Court allowed the appeal against liability and quantum.

The defendant was under an obligation to ensure that delivery of the goods was against the house bills, representing title to the cargo, which were in the possession of the plaintiff, but instead allowed delivery without production of the original bills of lading (it simply discharged the cargo, instead of delivering to the party entitled to possession and legal ownership). The defendant was therefore in breach of the contract of carriage, and was, accordingly, liable for the losses suffered by the plaintiff. The one-year time bar in art 3.6 of the Hague Rules applied only to breaches of contract or duty that took place between loading to discharge; it did not apply to claims for non-delivery of cargo because 'delivery' was outside the scope of the limitation prescribed under art 3.6, by virtue of art 2 of the Hague Rules.