A Liberian registered company, Armstel Shipping Corp (Armstel) sought to set aside an order granting the plaintiffs leave to add Armstel as a first defendant named in the writ in substitution for a Gibraltar-registered company, Oceanview Ltd (Oceanview), and extending the writ for four months.

Held: Armstel's application succeed. The order must be discharged and the proceedings of the plaintiffs against Armstel must be struck out.

Article 3.6 of the Hague Rules provides: 'In any event the carrier and the ship shall be discharged from all liability whatsoever 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'.

In Aries Tanker Corp v Total Transport Ltd [1977] 1 WLR 185, 188 (CMI2194) Lord Wilberforce, with whose speech the other members of the House of Lords agreed, said:

It is a time bar of a special kind, viz., one which extinguishes the claim ... not one which, as most English statutes of limitation (e.g. the Limitation Act 1939 ...) … do, bars the remedy while leaving the claim itself in existence. … The charterers' claim, after May 1974 and before the date of the writ, had not merely become unenforceable by action, it had simply ceased to exist …

This statement of the law was followed by this Court in The Nordglimt [1988] QB 183 (CMI2230).

It has been conceded by the plaintiffs that the action as originally constituted, that is to say an action started by a writ naming only Oceanview and Panthai Shipping Ltd as defendants did not suffice to stop the operation of the Hague Rules time limit on 9 March 1991. On that date, Armstel was discharged from all liability whatsoever in respect of the goods covered by this bill of lading, and the plaintiffs' cause of action against Armstel had not merely become unenforceable by action, it had simply ceased to exist.

Whilst accepting that this was the position as at the end of March 1991, the plaintiffs submitted that by a doctrine of relation back recognised by English law it was possible for that state of affairs to be retrospectively reversed. Thus the joinder of Armstel as a defendant on 19 July 1991 related back to the original date of the issue of the writ, 28 February 1991, and therefore had the consequence that under English law it must now be accepted, contrary to the true facts, that suit had been brought against Armstel before 9 March 1991.

The plaintiffs argued that s 35 of the Limitation Act 1980 and, as a rule made under that rule-making power, O 20, r 5(3) were capable of applying to a contractual time limit under the Hague Rules. This contention, despite the fact that it appears to have been accepted in The Joanna Borchard [1988] 2 Lloyd's Rep 274, is unsustainable. Section 35 starts with the words, 'For the purposes of this Act' and s 35(3) expressly says 'after the expiry of any time limit under this Act'. Similarly s 39 is also unequivocal. The scheme of these provisions is confined to the statutory time limits under that Act and has no application to contractual or substantive time limits. They have no application to the Hague Rules time limit whether it becomes effective, as in this case by contract, or by statute under the Carriage of Goods by Sea Act 1971.

In any event O 20, r 5 cannot deprive a party of a substantive defence. Neither the statutory provisions under which the rule was made nor any general power to regulate the procedure of the courts can deprive a person of an accrued substantive legal right or, more precisely in the present context, create a substantive legal cause of action which did not previously exist. If O 20, r 5 and the inclusion in it of the words 'any applicable limitation period' is to be construed as referring to substantive provisions which extinguish causes of action, it would be ultra vires; but the correct approach is that the words must be read as referring only to limitation periods properly so called which impose a procedural restriction only. Where the Hague Rules time limit is involved, the rule will not assist a party whose cause of action has already been extinguished.