This article was originally published on Lloyd’s Maritime and Commercial Law Quarterly and is republished with permission.
In this bulletin, we once again draw on our annual reports on French shipping law published by Andrew Tetley and Antoine Guillemot in the Lloyds Maritime and Commercial Law Quarterly Yearbook.
In this bulletin, Andrew Tetley and Antoine Guillemot focus on limitation of liability. In a recent case, and after multiple appeals, CMA CGM was able to limit its liability to £100 sterling (equivalent of 823 SDRs) for damage done to containerized bulk cargo.
Calculation of a carrier’s limitation of liability for bulk carriage under the Hague Rules: corn cobs or containers?
A Senegalese company sold a number of shipments of bulk sweetcorn to a British company, transported in refrigerated containers by CMA CGM from Senegal to England under various bills of lading. The bills contained a Paramount clause incorporating the original Hague Rules. At delivery, a shipment of 56,000 corn cobs weighing 19,040 kg, transported in bulk in one container, was found damaged due to malfunction of the refrigerating equipment.
Cargo insurers claimed against CMA CGM for the cargo damage. In defence, CMA CGM argued that it was entitled to limit its liability to £100 sterling (or 823 SDRs), on the basis that the single container constituted the relevant unit/package in terms of the Hague Rules. Cargo insurers argued that the relevant units were the corn cobs (i.e. 56,000 x 823 SDRs).
The Court of Appeal found that CMA CGM could limit its liability to 823 SDRs, based on the single container being the relevant unit.
On further appeal, the French Supreme Court quashed the finding on limitation of liability on the grounds that the Court of Appeal had failed to refer to the “freight unit” chosen by the parties. The matter was remitted back to the Court of Appeal on this issue.
By judgment dated 30 May 2024 (post-dating the linked article below), a reconstituted Court of Appeal confirmed limitation at 823 SDRs, making express reference to the bill of lading having recorded “1 BATCH OF CORNS”, and thereby indicating the “unit chosen by the parties”.
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