## Facts

- Cargo (refrigerated/frozen meat) was carried by sea from New Zealand to London under bills of lading issued on behalf of the owners of the *Arawa*.
- The bills of lading incorporated the Hague Rules by a paramount clause and also contained exemption/limitation wording directed at loss or damage occurring in connection with discharge and delivery.
- When the vessel arrived in London, direct discharge to a berth/warehouse was not practicable within the time required, and the shipowners arranged for discharge by lighters from the ship’s side to a wharf for landing and collection.
- Shore handling and landing were carried out through port/wharf arrangements involving a wharfinger (and associated labour and facilities) rather than being performed by the ship’s crew.
- Delays occurred during the landing/wharf phase, and the cargo suffered deterioration while waiting to be landed and/or while awaiting proper cold conditions ashore.
- Cargo interests claimed the shipowners were responsible for the loss because the damage occurred during the carrier’s arrangements for lighterage and landing, and alleged fault in the way those arrangements were made or carried out (including reliance on alleged negligence by the wharfinger).
- The shipowners denied liability and relied on (i) the contractual terms in the bills of lading and (ii) Hague Rules protections, arguing that the landing arrangements were authorized by the contract of carriage and that any negligence was not theirs (and, on the facts, not that of a “servant or agent” for whom they were answerable within the Rules).
- The dispute reached the Court of Appeal after an Admiralty Court decision addressing whether the carrier’s bill of lading obligations and protections extended to this lighterage/landing stage and how responsibility for the wharfinger’s conduct should be treated.

## Issues

1. Whether the shipowners’ arrangements for lighterage from ship’s side and landing at the wharf were authorized as part of the contractual service under the bills of lading, or were outside the agreed carriage/delivery obligations.
2. Whether, for loss occurring during the lighterage/landing stage, the shipowners were liable for negligence of the wharfinger (or others involved in landing) as if that party were the shipowners’ servant or agent.
3. Whether, assuming the loss was attributable to delay or mishandling during landing, the shipowners could rely on the Hague Rules (notably arts. III(2) and IV(2)(j) and/or IV(2)(q)) and/or bill of lading exemption clauses to defeat or limit liability.
4. How art. III(2) of the Hague Rules operates: whether it fixes the minimum content of the carrier’s service (what tasks must be undertaken) or regulates the standard of performance for those tasks the carrier has undertaken.

## Decision

- The Court of Appeal held that the shipowners were entitled to rely on protections in the bills of lading and/or the Hague Rules in respect of the damage said to have occurred during the lighterage/landing stage.
- The Court accepted that art. III(2) of the Hague Rules is directed to the manner in which the carrier performs the functions it has undertaken, and does not, of itself, dictate the full range of services that must be supplied in every contract of carriage.
- On the facts and on the contractual terms, the lighterage/landing arrangements were treated as within the contractual framework so that the bill of lading regime (including exemptions and the incorporated Rules) governed the parties’ rights and liabilities at that stage.
- The shipowners were not fixed with liability merely because the cargo was damaged during the wharf-side phase; whether responsibility attached depended on (among other things) whether the relevant fault was that of the carrier or of a party properly characterised as the carrier’s servant or agent for Hague Rules purposes.
- The shipowners succeeded on the basis that the claim was met by the applicable contractual and Rules protections, including reliance on Hague Rules exceptions framed by absence of the carrier’s “actual fault or privity” and (where applicable) absence of fault of the carrier’s servants or agents.

## Legal Principles

- Article III(2) of the Hague Rules regulates how the carrier must perform the tasks it has undertaken under the contract of carriage; it does not, by itself, define the full scope of the carrier’s promised service.
- A bill of lading may permit or contemplate discharge by lighterage and landing at a wharf as part of the contractual method of delivery; where so, the contractual allocation of risk and the incorporated Hague Rules can apply during that stage.
- The carrier is not automatically liable for negligence of a wharfinger or other shore-side operator involved in landing; liability turns on proper characterisation of that party’s role and the contractual/Rights regime (including whether the party is a “servant or agent” for Hague Rules purposes).
- Hague Rules art. IV(2)(q) can protect the carrier where the loss arises without the carrier’s actual fault or privity (and, depending on the case analysis, without fault of the carrier’s servants or agents), and bill of lading exemption clauses may also operate so far as they are consistent with art. III(8).
- Construction of the bill of lading and the surrounding commercial arrangement is central: the court will ask what service the carrier undertook and which risks were allocated to cargo interests during discharge and landing.

## Conclusion

The Court of Appeal treated the shipowners’ lighterage and wharf-side landing arrangements as governed by the bill of lading contract and the incorporated Hague Rules, and held that the shipowners could rely on those contractual and Rules protections to defeat liability for deterioration occurring during the landing/wharf phase, including where allegations focused on wharfinger fault and delay rather than fault of the carrier itself.


*The Arawa*, [1977] 1 Lloyd’s Rep. 150 (C.A.)

The Arawa, [1977] 1 Lloyd’s Rep. 150 (C.A.)