The third defendant, Pakistan National Shipping Corp (PNSC), applied for an order stating that the plaintiff's claim against it was time-barred.

The plaintiff agreed to purchase a consignment of goods from the first defendant for the plaintiff’s thermal power station at Jamshoro Sindh. The consignment was to be carried from Belgium to Pakistan on the Pacific Express. However, the plaintiff was advised on 30 June 2008 that the consignment was not traceable at the port of arrival. On 18 March 2009, PNSC offered GBP 100 to the plaintiff in full and final settlement of its claim under the Hague Rules, which was rejected by the plaintiff, as were two further offers of higher compensation in 2011. There was ongoing correspondence between the parties regarding the claim from 2009-2011.

PNSC argued that while the suit against the first defendant was within time, as limitation was three years in view of the contract of sale between the parties, the suit against PNSC was time-barred, as the limitation for filing the suit was governed by the Hague Rules. PNSC contended that the port of shipment of the consignment in question was Antwerp, Belgium, making the Hague Rules applicable to the carriage of the consignment. Article 3.6 of the Hague Rules provides: 'In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless Suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.' Even if the port of shipment was not ascertainable, the Carriage of Goods by Sea Act 1925, which is also based on the Hague Rules, would apply, and arts 30 and 31 of the First Schedule to the Limitation Act 1908 would apply, which also provide a limitation period of only one year for filing suit against the carrier. The period of one year had commenced on 30 June 2008, when a Short Landing Certificate was issued by the Karachi Port Terminal, and the plaintiff became aware that its goods were no longer available. The suit instituted on 29 June 2011 was thus barred.

The plaintiff contended that limitation is a mixed question of law and fact that cannot be decided without evidence, or on the basis of only one document, namely the Short Landing Certificate dated 30 June 2008. The plaintiff argued that the two bills of lading issued by PNSC were fictitious, as the consignment described therein was never received on the vessel and was never discharged or delivered at the Karachi Port, PNSC did not inform the plaintiff about the arrival of the vessel, and copies of shipping documents were delivered to the plaintiff for the first time on 3 March 2008. These disputed questions of fact could not be decided without evidence. The plaintiff's claim was not merely a claim on the basis of the bills of lading. The plaintiff had also applied for declarations that shipment of the consignment in question was not made, and that the alleged bills of lading in respect of the consignment, which was never received on the vessel, are fabricated documents. The plaintiff therefore argued that the suit was not barred as the prescribed period of limitation for such relief is six years under art 120 of the Limitation Act.

Held: Application dismissed. The suit against PNSC is not barred by limitation.

The allegations and counter-allegations by the parties clearly indicate that they are at variance on questions of fact which cannot be resolved without recording their respective evidence. It is well-settled that a plaint cannot be rejected in such cases without affording opportunity to the parties to adduce evidence and without providing chance of hearing to them.

The plaintiff's argument that in view of the declaration sought by the plaintiff the suit is not barred as the prescribed period of limitation for such relief is six years under art 120 of the Limitation Act is incorrect. The prayer made in the plaint clearly shows that a declaration has been sought by the plaintiff against the first and second defendants, but no such declaration has been sought against the third defendant, PNSC.

PNSC is correct in saying that limitation for filing suit against it should be governed by the Hague Rules, which provide limitation of one year after delivery of the goods or the date when the goods should have been delivered, and by arts 30 and 31 of the First Schedule to the Limitation Act, which also provide limitation of one year from the date when the loss or injury occurs or when the goods ought to be delivered, respectively.

Before expiration of the limitation period of one year from 30 June 2008, PNSC in its letter dated 18 March 2009 offered GBP 100 to the plaintiff to settle the claim, which was not only rejected by the plaintiff through its letter dated 5 September 2009, but it also insisted on its full claim. Thereafter, there was ongoing correspondence until 2011. The above facts, which are based on admitted correspondence between the parties, clearly show that the one-year period of limitation never expired in this case, and before expiration of the period PNSC acknowledged its liability in writing and offered to settle the plaintiff's claim. The effect of PNSC's mentioning in its letters that the offer was being made without prejudice and without admitting its liability, can be considered at the stage of final hearing. Needless to say that such mention in its offers by PNSC cannot override the principle and effect of acknowledgment in writing enunciated in s 19 of the Limitation Act. It is clarified that the observations made in this order are tentative in nature, which shall not affect the merits of the case of any of the parties in any manner whatsoever, and the suit shall be decided on its merits in accordance with the law.