The plaintiff was the sub-charterer of the Korean Pioneer which shipped goods carried under two bills of lading incorporating the Hague Rules. The plaintiff commenced arbitration proceedings in Hamburg against the owners of the vessel for cargo loss and damage but these proceedings were dismissed because the Hamburg tribunal found that it had no jurisdiction.

The plaintiff then commenced an action in Hong Kong but this was done more than a year after the delivery of the goods. The Court ordered a trial on the preliminary issue as to whether the plaintiff’s claim was time-barred pursuant to art 3.6 of the Hague Rules.

As the contract of carriage was governed by German law, the plaintiff argued that s 212(2) of the German Civil Code extended the limitation period by 6 months after the decision of the arbitrators which held that the arbitration was impermissible. The Hong Kong proceedings were commenced within these 6 months. The plaintiff therefore argued that its claim was not time-barred.

Held: The plaintiff's claim is time-barred. Action dismissed.

First, as Hobhouse J pointed out in The Nordglimt [1988] 1 QB 183 (CMI2230), an action brought before an incompetent court would neither protect suit time nor prevent the carrier from being discharged of its obligations under the Hague Rules. Art 3.6 of the Hague Rules requires a plaintiff to commence litigation before the correct court or tribunal within one year of the date of delivery of the goods, failing which the claim is time-barred. Since the claim was wrongly brought in German arbitration proceedings, and was never rightfully commenced in the correct jurisdiction within the limitation period, the claim was time-barred.

Second, based on the expert evidence available, the Court found that s 212(2) of the German Civil Code was a procedural provision which had no application to the current case since procedural matters are governed by the lex fori, which is Hong Kong law.

Third, s 212(2) of the German Civil Code also had no application to the current case where liability is not time-barred on a procedural basis. Lord Wilberforce in Aries Tanker Corp v Total Transport Ltd [1977] 1 WLR 185 (CMI2194) said that after a Hague Rules limitation period has expired, the claim no longer has any existence in law and would have no relevance in proceedings commenced. A procedural rule like s 212(2) of the German Civil Code has no effect on a claim that is substantively time-barred pursuant to art 3.6 of the Hague Rules.