S&T entered into a transport contract with the carrier (the defendant) to export an air-cooled heat exchanger to PT Gunanusa Utama Fabricators. The International Convention for the Unification of Certain Rules of Law relating to Bills of Lading 1924 (the Hague Rules) applied to the transport contract.

The goods were damaged in the course of transportation. S&T’s insurer (the plaintiff) paid out on the insurance contract and filed a claim against the defendant for indemnification. A dispute arose involving the quantification of the indemnity.

The present appeal concerned the interpretation of ‘pounds sterling’ in art 4.5 of the Hague Rules, which the trial court constructed as meaning British Pounds (GBP).

Held: The court reversed the decision of the trial court and held that ‘pound sterling’ in art 4.5 meant the gold value of a pound in the context of art 9 of the Hague Rules. Pound sterling as a gold value ceased to exist as a currency unit in 1931 when the UK ended gold convertibility. Since then, the package limit in art 4.5 of the Hague Rules was calculated according to the gold content and purity required of gold coins under the UK Coinage Act of 1870. While 100 pounds sterling might be deemed to be 100 gold value pounds, it might not be equated with the value of GBP 100, the nominal currency unit of the UK today. Additionally, the introduction of the Hague-Visby Rules was not a ground to deem 100 pounds sterling under art 4.5 of the Hague Rules to mean GBP 100 - it was revised to adopt the Special Drawing Right (SDR) as the criterion for quantifying carriers’ liability limitations.