This is an appeal by Norway & Asia Lines (the appellant) against a judgment and decree passed by the Subordinate Judge, Additional Court, Chittagong, in a suit for realisation of money on account of non-delivery of one case of textile machinery to Adamjee Jute Mills Ltd (the respondent). The respondent imported 1,111 cases of textile machinery from Japan, which were carried on a ship owned by the appellant.

The appellant, while accepting the allegation of short delivery, contended that in terms of the bill of lading, the courts in this country had no jurisdiction to try the suit, and that the claim of the respondent cannot exceed the amount in Pakistani currency equivalent of GBP 100 in paper currency at the prevailing exchange rate. The Subordinate Judge held that he had jurisdiction to try the suit and that the shipowner was liable to pay to the consignee the value of GBP 100 pound (gold sovereigns) in Pakistani currency, ie the value of 67.5 tolas of gold, at the then price of gold in Pakistan, and he accordingly decreed a sum of PKR 9,950 against the shipowner, being the value of 67.5 tolas of gold, ie the weight of 100 gold sovereigns, each piece weighing 11 annas. The appellant appealed.

Held: Appeal dismissed.

On appeal, the appellant argued that the courts in Pakistan had no jurisdiction since the parties had mutually agreed and chosen a foreign court, ie the court of the country of the shipowner, for settlement of the dispute. This issue has been settled by the Supreme Court of Pakistan in the case of Chowdhury v MS Mitsui QSK Lines Ltd 22 DLR(SC) 334 in which it has been held that an 'exclusive jurisdiction clause in the Bill of Lading whereby the jurisdiction of local Courts in Pakistan is ousted in respect of any dispute referred to in the bill of lading being opposed to public policy and derogatory to [the] country's sovereignty is void.'

The appellant next contended that the Subordinate Judge was wrong in awarding compensation for the loss of one package, the value of £100 guineas of 67.5 tolas of gold, and that the plaintiff was not entitled to recover more than the equivalent in Pakistan currency of GBP 100 sterling in English paper currency. The relevant provision of the bill of lading reads as follows: 'It is mutually agreed that the value of each package or other freight unit carried does not exceed the value of £100 (in paper) to which amount the liability of the carrier is restricted'.

Articles 4.5 and 9 of the Hague Rules should be read together for the purpose of interpretation of cl 20 of the bill of lading. Article 9 of the Hague Rules states that monetary units mentioned in these Rules are to be taken in gold value. Article 9 of the Rules clearly states that 'pound' mentioned in art 4.5 is to be taken to be the gold pound or sovereign. The language of art 9 is such that it would not discharge the carrier from its liability in the event of loss of an undeclared package by paying GBP 100 in notes. The provision in the bill of lading for payment of the equivalent of GBP 100 in English legal tender in paper currency in the bill of lading is therefore void as being contrary to art 4.5 of the Hague Rules. The Subordinate judge was justified in awarding compensation in Pakistani currency of the gold value of 100 pounds ie '£100 gold sovereigns', each weighing 11 annas.