The plaintiff entered into a freight forwarding service agreement (FFSA) with the first defendant, Panalpina Inc (Panalpina). Panalpina agreed to act as the principal and to be fully responsible for the services according to the agreement. Panalpina contracted with the second defendant, Logistec Stevedoring Inc, for the storage of the plaintiff's goods. In addition, Panalpina contracted with the third defendant, Desgagnés Transarctik Inc, for the transportation of the plaintiff's cargo by sea.

The third defendant's vessels, the Sedna Desgagnés and the Zelada Desgagnés, were used for the transportation in May and October. Upon arrival of the goods, damage was discovered to both of the shipments.

More than a year later, the plaintiff filed a claim against the defendants for the cargo damage. The core issue for the court to determine was whether Panalpina was entitled to invoke the nine-month time bar contained in the Canadian International Freight Forwarders Association Standard Trading Conditions (CIFFA terms) or whether any of the defendants could rely upon the one-year time limitation as stated in art 3.6 of the Hague Rules, which had been incorporated by reference in the sea waybills issued by the third defendant.

The plaintiff denied the applicability of CIFFA terms on two grounds. First, the plaintiff had never been advised of the application of CIFFA terms by Panalpina. Secondly, the CIFFA terms contradicted the FFSA's terms.

Held: The plaintiff's claim is dismissed. Summary judgment for the defendants.

The plaintiff was to be caught by either a nine-month or one-year limitation period. In this particular case, according to the provisions of the FFSA, Panalpina acted as the plaintiff's freight forwarder and assumed duty for carriage on the basis of its own expertise. The plaintiff knew that Panalpina was a member of CIFFA from the outset. It was commonly agreed and accepted that freight forwarders in the business of carriage of goods usually offer their transportation arrangement service and other related services on the basis of standard terms and conditions. In addition, the application of CIFFA terms had been explicitly stated in Panalpina’s quotes relating to the shipments. The quotes had been submitted by Panalpina to the plaintiff. The plaintiff ought to have known of the standard CIFFA terms and conditions. The CIFFA terms should therefore be applied here even though the plaintiff alleged that it failed to take proper notice of the terms.

As to the plaintiff's second argument, there was no term in the FFSA to deal with the limitation period issue. Thus, there was no contradiction between the CIFFA terms and the FFSA terms.

Furthermore, the plaintiff was entitled to reject the CIFFA terms on reviewing the quotes from Panalpina. However, it failed to do so. Therefore, the plaintiff was bound by the CIFFA terms and the action against Panalpina was time-barred.

The action against the second and third defendants was also time-barred since both of them could rely on s 2 of the CIFFA terms. Section 2 of the CIFFA terms is by its nature a Himalaya clause which aims to extend the benefits of the carrier's contractual limitations to sub-carriers or other relevant third parties who are engaged by the carrier to participate in the transportation of goods. Therefore, every participant in the contract of carriage is entitled to rely upon the time bar in this contract.

In the alternative, the sea waybills were the best evidence of the contracts of carriage of goods. The plaintiff was a party to the carriage contract and therefore bound by its terms and conditions. The paramount clause of the sea waybills, although contractually incorporating the Hague Rules, also provided that '[i]n the event said rules are in contradiction with the other terms, provisions and conditions of this contract, said other terms, provisions and conditions shall prevail'.

Therefore, the nine-month time bar contained in the CIFFA terms should prevail over art 3.6 of the Hague Rules.