## Facts

- A drilling machine was shipped from Liverpool to Wellington under a bill of lading issued by the contractual carrier, Federal Steam Navigation Co. Ltd., naming A.M. Satterthwaite & Co. Ltd. as consignee.
- The bill of lading contained a Himalaya clause extending the carrier’s defenses, exemptions, and limitations to its “servants, agents and independent contractors,” and included a one-year time bar for suit after delivery.
- New Zealand Shipping Co. Ltd. performed stevedoring services at Wellington and negligently damaged the drill while unloading.
- The goods were delivered in 1964; Satterthwaite sued New Zealand Shipping in negligence in 1967, more than one year after delivery.
- New Zealand Shipping was not the contractual carrier and was not named as a contracting party on the bill of lading, but relied on the Himalaya clause and the time bar as a defense.

## Issues

1. Whether a stevedore/independent contractor not party to the bill of lading could enforce the bill’s exemption/limitation provisions against the consignee despite privity.
2. Whether the stevedore’s unloading performance supplied consideration for an enforceable promise of protection, even though the stevedore owed an existing contractual duty to the carrier to perform the work.
3. Whether the bill of lading could be construed as the carrier contracting as agent for the stevedore (with authority or ratification) to confer the benefit of the protective clauses.
4. If the stevedore could rely on the clause, whether the consignee’s claim was barred by the one-year limitation period.

## Decision

- The Privy Council held that New Zealand Shipping was entitled to the benefit of the bill of lading’s protective provisions, including the one-year time bar.
- The Himalaya clause clearly intended to protect stevedores as “independent contractors.”
- The carrier was treated as contracting both for itself and as agent for the stevedore; authority or ratification could be inferred from the commercial arrangements and performance.
- A separate unilateral contract arose between the cargo owner/consignee and the stevedore: the bill’s terms operated as an offer of protection accepted by the stevedore’s performance (unloading).
- The stevedore’s performance constituted sufficient consideration for the promise of protection, notwithstanding the stevedore’s existing duty to the carrier.
- Because suit was brought more than one year after delivery, the claim was time-barred and failed.

## Legal Principles

- A properly drafted Himalaya clause can extend contractual exemptions and limitations to non-party stevedores if the contract shows an intention to protect them and establishes a contractual mechanism for enforcement.
- A carrier may contract as agent for stevedores to confer the benefit of limitation/exclusion clauses, provided authority or subsequent ratification exists.
- A unilateral-contract analysis can avoid privity objections where the cargo owner’s promise of protection is accepted by the stevedore’s performance.
- Performance of an existing contractual duty owed to a third party may be valid consideration for a separate promise from another party when that performance is rendered on the terms offered.
- Where applicable, contractual time bars incorporated into the bill of lading may be invoked by protected third parties to defeat late-filed cargo damage claims.

## Conclusion

The Privy Council enforced the bill of lading’s Himalaya clause and one-year time bar in favor of the stevedore by construing the bill as creating, through agency and performance, a separate enforceable contract between the consignee and the stevedore supported by consideration.


N.Z. Shipping Co. v. A.M. Satterthwaite & Co., [1974] 1 All E.R. 1015 (P.C. 1974)