UNICEF loaded its goods on the Armar, which was owned by the defendant, for transportation from Rotterdam, the Netherlands, to Havana, Cuba, in accordance with a clean bill of lading. UNICEF claimed CYP 9,538 from the defendant as damages for loss or short delivery of its goods. The Armar arrived at Havana, Cuba, on 17 September 1975. Clause 2 (paramount clause) of the bill of lading provided that the Hague Rules as enacted in the country of Shipment 'shall apply to this contract'.

The defendant contends that the plaintiff's claim is time-barred as this action was not brought within one year. Under cl 3 of the bill of lading jurisdiction to solve any dispute arising under the bill is vested in the Court of the country where the carrier has its principal place of business and the law of such country is the proper law of the contract.

Held: Judgment for the defendant. Where a charterparty or a bill of lading incorporates the provisions of the Hague Rules that any suit for loss or damage should be brought within one year, the claim is not merely barred under the Limitation Acts, but is completely extinguished if no proceedings have been brought within the year.

The Hague Rules as implemented in the Carriage of Goods by Sea Law, Cap 263, cannot be deemed as incorporated by legislation into the bill of lading under consideration as the law applies only to outward shipments from Cyprus, which is not the case in the present action. However, the Hague Rules have been incorporated by contract and they have the force of a term in the contract. Once the right of action has been extinguished as no proceedings have been taken within the period envisaged by the bill of lading, the plaintiff has no cause of action against the defendant.

The contention of counsel for the plaintiff that the time limitation clause is invalid as violating s 28(1) of the Contract Law, Cap 149, is untenable.