Hague Rules remain “Paramount” in the face of inconsistent contractual provisions: “The Alion”

Where the Hague or Hague Visby Rules have been contractually incorporated into a bill of lading but conflict with other contractual provisions under that same bill, which regime should take priority? The Rules, said the Commercial Court in Tanga Pharmaceuticals Plastics Limited & Ors v Emirates Shipping Line FZE (The Alion) [2025] EWHC 368 (Comm).

The Alion concerned an application for summary judgment brought by the Defendant carrier against the Claimant cargo interests. The Defendant alleged that the Claimants’ claims were time-barred because certain contractual provisions contained in the applicable bills of lading displaced the ordinary one-year time bar set out in Article III Rule 6 of the Hague Rules (which had been incorporated into the bills of lading via a Clause Paramount). The Court, however, disagreed and dismissed the Defendant’s application. 

Material Facts

The Claimants had interests in 548 containers and their contents (the “Cargo”), which the Defendant had agreed to carry from India, the UAE, and Saudia Arabia to Mombasa, Kenya, under identical bills of lading (the “Bills of Lading”). Each Bill of Lading was subject to English law and contained an English jurisdiction clause.

During the voyage, the vessel suffered a motor engine failure, which resulted in salvage services being rendered and general average being declared. The Cargo was discharged after salvage security and general average security having been provided. 

The Claimants therefore notified the Defendant that they were going to seek to be indemnified by the Defendant for their liability to the salvors and (in some cases) for particular average.

The Claimants issued their claims within the Hague Rules limitation period, but service was not effected until a year later. The Defendant contended that the claims had not been issued within time, in light of the contractual provisions contained in the Bills of Lading. 

The Relevant Provisions in the Bills of Lading

Clause 2 of the Bills of Lading was the “CLAUSE PARAMOUNT”, and provided that Articles I to VIII of the Hague Rules applied as a matter of contract (except in certain named circumstances that were not applicable on the facts).

Under Article III of the Hague Rules: 

Rule 6 – the limitation period for bringing a claim is one year from the date of delivery of the goods or the date when the goods should have been delivered; and
Rule 8 – any contractual provision that seeks to relieve a carrier’s liability by seeking to impose more stringent limitation provisions than those provided under Article III is null and void.

However, Clause 18 of the Bills of Lading, titled “NOTICE OF LOSS OR DAMAGE, TIME BAR” provided amongst other things that:

any claim against the carrier for “any claim other than for loss or damage to Goods” had to be submitted to the carrier “within 20 days from the day when the Goods were or should have been delivered”, failing which such claim would be time-barred (the “20-day Provision”); and
suit would not be considered to have been brought in time “unless process [had] been actually served and/or jurisdiction obtained” over the carrier “within such time” (the “Service Provision”). 

The Parties’ Positions on the Relevant Provisions

The Defendant claimed that because the Hague Rules applied only as a matter of contract, Clause 18 took precedence over the Rules. The purported effect of this was that the Claimants’ claims were time-barred because they:

• Were claims “other than for loss or damage to Goods” and had not been submitted to the Defendant carrier within 20 days, in breach of the 20-day Provision; and
• Had not been served on the Defendant carrier as prescribed by Clause 18. 

The Claimants counterargued that their claims were not time-barred because they had commenced their claims within a year of discharge of the Cargo, in line with the Hague Rules as incorporated under Clause 2. 

Issues before the Court

The Court considered the following three questions to be determinative of the Defendant’s application: 

1. Is the incorporation of the Hague Rules in Clause 2 made subject to Clause 18, such that Clause 18 prevails in so far as there may be any inconsistency?
2. If Clause 18 prevails, does the 20-day Provision apply?
3. In any event, is the Service Provision compatible with Article III Rule 6 and Rule 8? 

The Court answered all three questions in the negative. 

Judgment 

The Hague Rules prevailed over Clause 18

The Court held that the Hague Rules, as contractually incorporated into the Bills of Lading, prevailed over Clause 18. The Court noted that the authorities were clear: although parties are able to modify the Hague Rules where they apply only as a matter of contract, if a party wishes to exclude or limit its liability clear words must be used. Parties do not forego valuable rights without it being made clear that that was their intention. On the Court’s reading of the Bills of Lading, such intention to forego valuable rights had not been evinced.  

The Court reached this conclusion for the following reasons: 

1. The title of Clause 2 – “CLAUSE PARAMOUNT” – was a term whose meaning was well understood in the shipping industry; it is a clause which overrides any express exemption that is inconsistent with it.
2. The Bills of Lading had not simply incorporated the Hague Rules without qualification (what the Court referred to as a “vanilla” incorporation”). On the contrary, certain Articles had been omitted, notably Article IX, and Clause 2 had listed circumstances where the incorporated Articles would not be applicable. The implication of this was that outside such circumstances, the parties had intended for the Rules to have their usual effect, which in the context of Article III Rule 8 meant it acting as a repugnancy clause, i.e. a clause whose provisions are to have priority over anything inconsistent or repugnant.
3. Clause 18 did not express that it was intended to prevail over Clause 2 and other provisions in the Bills of Lading provided for the carrier’s liability to be determined in accordance with Clause 2, i.e. the Hague Rules. 
4. If the Claimants had intended to forego valuable rights under Articles III Rules 6 and 8, they would have said so. 

The 20-day Provision was not applicable 

Given the Court’s finding on the priority to be afforded to the Hague Rules, it was not necessary for the Court to consider whether the 20-day Provision was applicable in the circumstances as it was squarely inconsistent with Article III Rule 6 (and therefore null and void under Article III Rule 8). Nonetheless, the Court proceeded to make obiter comments on what the position would have been absent the Hague Rules. 

The Court disagreed with the Defendant’s contention that the reference to “loss or damage to Goods” in the 20-day Provision should be understood in a physical / literal sense. Applying the Court’s reasoning in The Thorco Lineage by way of analogy, the Court held that the terms “loss or damage” must be understood to also encapsulate economic damage. As such, even if the Hague Rules had not applied, the 20-day Provision would not have been applicable on the facts. 

The Service Provision was not compatible with Articles III Rule 6 and Rule 8 

The Court found that the Service Provision was incompatible with Article III Rules 6 and 8 of the Hague Rules. The Court disagreed with the Defendant’s assertion that a provision stipulating when suit is to be deemed to have been brought is not one that relieves/limits the carrier from liability within the meaning of Article III Rule 8 because Article III Rule 6 is neutral as to what constitutes the bringing of suit. 

The Court was mindful that if the parties were entitled to stipulate the circumstances in which suit can be said to have been brought then it was not apparent why it would not also be acceptable to stipulate for other events that are unlikely to occur within a year, e.g. “suit shall not be considered to have been brought unless pigs fly, or England win the World Cup.” 

The Court held that as a matter of construction, the Service Provision fell to be interpreted in light of the English governing law and jurisdiction clause contained in the Bills of Lading. Under English law, suit is brought when the claim form is issued. It was therefore “incontestable” that the Service Provision was capable of relieving the carrier from liability and accordingly null and void under Article III Rule 8. 

Key Takeaways 

This case serves as a helpful reminder to pay close attention to provisions that are to be incorporated by reference in contract of carriage documents, and to use express language when seeking to exclude valuable rights. Although it is perhaps unsurprising that the Court was prepared to find that the Hague Rules prevailed in this case, the Court’s reasoning was closely focused on the individual wording under the Bills of Lading so it is not inconceivable that a case may arise in the future where the Court finds that the negotiated provisions of the applicable contractual document take precedence over the Hague Rules.