Anyone who deals with cargo claims under the Hague-Visby Rules (“HVR”) knows the drill: if cargo is lost, damaged or misdelivered, the carrier can only be sued within one year of delivery or the date when the goods should have been delivered. Fail to comply, and the claim does not just become harder to bring – it disappears entirely. This is the effect of Article III rule 6 of the HVR.

 

What had never been directly decided, until now (4 September 2026), is whether proceedings brought purely to obtain security – typically a ship arrest – counts as “suit” under Article III rule 6 of the HVR.

 

The English Court of Appeal (“COA”) in Batavia Eximp & Contracting (S) Pte Ltd v Pedregal Maritime SA (The Taikoo Brilliance) [2026] EWCA Civ 1158 (“The Taikoo Brilliance”) has now answered this  question, and has also settled a second, equally practical issue, i.e. where cargo covered by a bill of lading is carried partly on and partly under deck, what statement must there be on the face of the bill to engage the exception in Article I(c). In summary, the COA held that:-

 

1. 1. Proceedings brought purely to obtain security for a claim, such as the arrest of a vessel, is not a “suit” within the meaning of Article III rule 6 of the HVR. The one-year time bar will therefore only be satisfied by substantive proceedings commenced in a competent forum.

 

2. 2. Where only part of a cargo consisting of items of differing value is carried on deck, the bill of lading must specifically identify the cargo carried on deck, such as by parcel number or serial number, for that cargo to be excluded from the HVR under Article I(c) of the HVR.

 

BRIEF FACTS

 

Pedregal Maritime SA (“Owners”) were the owners of the vessel, “Taikoo Brilliance” (“Vessel”), which carried 36,934 Japanese Agricultural Standard cubic metres (“JAS CBM”) of New Zealand pine logs (“Cargo”) from New Zealand to Kandla, India. Batavia Eximp & Contracting (S) Pte Ltd (“Holders”) were the holders of 4 bills of lading issued by the Owners in respect of the Cargo (“Bills”). 2 of the 4 Bills stated that some of the timbers were carried on deck (22,994 and 11,092 pieces respectively), but did not identify which pieces, from which lots – a crucial fact in this case as Article I(c) of the HVR takes deck cargo outside the HVR altogether.

 

The Cargo was discharged from 16 September 2019 to third parties without production of the Bills, against a letter of indemnity provided to the Owners by the charterer. The Holders alleged mis-delivery by the Owners.

 

The Bills contained a London arbitration clause, but no arbitration was commenced initially. Instead, on 18 August 2020, the Holders issued a writ in the High Court of Singapore for the arrest of the Vessel’s sister ship, the “Navios Koyo”, which was subsequently arrested on 18 September 2020 and released against security (“Singapore Arrest Proceedings”). The Owners obtained a stay of the Singapore Arrest Proceedings in favour of the arbitration on 20 December 2020. The Holders did not commence arbitration until 22 or 24 December 2020 – more than a year after delivery (or as in this case, alleged mis-delivery) of the Cargo.

 

The Owners contended that the Holders’ claim was time-barred under Article III rule 6 of the HVR, which discharges the carrier and the ship from “all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered”. The arbitrator found that:-

 

1. 1. the Singapore Arrest Proceedings was not a “suit” and the Holders’ claim was therefore time-barred[1]; but

 

2. 2. the time bar only applied to cargo carried under deck and did not apply to the Cargo carried on deck, as the statements in the Bills (identifying the relevant commodity, quantities loaded both on board the Vessel and on deck) were sufficient to exclude the on-deck Cargo from the ambit of HVR under Article I(c) of the HVR [2].

 

Both parties’ appeals to the English High Court were dismissed, and both parties appealed further to the COA. The COA dismissed the Holders’ appeal and allowed the Owners’ appeal.

 

ISSUE 1: IS AN ARREST FOR SECURITY “SUIT” THEREBY STOPPING THE CLOCK UNDER ARTICLE III RULE 6 OF THE HVR?

 

The established position based on previous authorities is that proceedings brought in breach of an arbitration clause or an exclusive jurisdiction clause are deemed not brought in a “competent” jurisdiction and cannot be “suit” for the purposes of Article III rule 6. The Singapore Arrest Proceedings had to be regarded as a claim for security only, in which the Owners’ liability could not be determined. However, the Holders argued that the Singapore Arrest Proceedings was still a “suit” within Article III rule 6 because, among others: (i) the term “suit” was not expressly qualified in any way (i.e. proceedings that must be brought to enforce liability); (ii) with reference to the English text of the HVR, the word “action” in Article III rule 6 bis and Article IV bis referred to proceedings to enforce liability and so the use of “suit” in Article III rule 6 connotes a difference in meaning; and (iii) the Singapore Arrest Proceedings placed the Owners on notice that a claim was coming.

 

The COA rejected the Holders’ arguments and held that:-

 

1. 1. As the term “suit” is not defined or qualified, its meaning must be ascertained from its context. Since the bringing of suit in time prevents the carrier from being discharged from all liability, the natural reading is that the suit must be one seeking to establish such liability [3].

 

2. 2. The French text, which is the official and authoritative version of the Rules, uses the same word (“action”) in Article III rule 6 as in Article III rule 6 bis and Article IV bis of the HVR, both of which were accepted to refer to proceedings to enforce liability[4].

 

3. 3. The object and purpose of the time bar is not merely to achieve finality and enable shipowners to clear their books if no claim has been notified within one year, but to ensure the prompt making and pursuit of substantive claims[5].

 

The COA therefore agreed with the High Court that “suit” means “proceedings that can decide the claim”. The Singapore Arrest Proceedings therefore did not stop the clock. The only proceedings capable of deciding liability was the London arbitration, and that commenced more than 1 year later, rendering the Holders’ claim time-barred.

 

ISSUE 2: WHAT MUST A BILL SAY TO TAKE PART OF A CONSIGNMENT OF CARGO OUT OF THE HVR?

 

Article I(c) of the HVR excludes from the definition of “goods” any “cargo which by the contract of carriage is stated as being carried on deck and is so carried”. Such cargo falls outside the HVR altogether, including the time bar in Article III rule 6.  Hence, if the statements in the Bills were sufficient, the Holders’ claim in respect of the Cargo carried on deck would not be time-barred.

 

The arbitrator found that the statements in the Bills were sufficient as the Bills identified the commodity, the total quantity, the quantities in identifiable lots and the number of pieces loaded on deck. The High Court held that he was not wrong in law to do so. The COA disagreed and allowed Owners’ appeal for the following reasons:-

 

1. 1. As a matter of ordinary meaning, cargo can only be “stated” to be carried on deck if it is identified or identifiable as the cargo in question. Where some items of a cargo, which is not homogenous, are carried on deck and others below deck, it is difficult to see how the items on deck can be “stated” to be so carried unless they are specifically identified [6].

 

2. 2. The statement subjects two parts of a single consignment to two different contractual regimes, one incorporating the HVR and one not. Such a division cannot logically be effected unless the items carried on deck are specifically identified [7].

 

3. 3. The purpose of the statement is to allow the shipper and any subsequent holder of the bill of lading to know which items of cargo are carried on deck and are not subject to the HVR, so that they can make an informed assessment of the risks and arrange insurance accordingly. If the items of cargo vary in value to any extent, the items carried on deck would need to be identified so that they are distinguishable from cargo carried below deck [8].

 

Accordingly, the COA held that for the exclusion in Article I(c) of the HVR to be engaged in relation to part only of a cargo consisting of items of differing value, the statement on the bill of lading “must specifically identify the cargo to be carried on deck, such as by parcel number or serial number”. As the logs varied in weight and therefore in value, and the Bills did not meet this requirement , the whole Cargo was accordingly deemed “goods” within Article I(c), and the time bar applied to the entirety of the Holders’ claim.

 

The COA left open the question of what is required where the cargo is homogenous or otherwise does not differ in value between its constituent elements.

 

Commentary

 

The Taikoo Brilliance is a reminder that the arrest of a vessel, while a legitimate means of obtaining security, does not by itself protect a cargo claim from the 1-year time bar under the HVR or the Hague Rules. This is of practical importance in jurisdictions like Malaysia and Singapore, where vessels can be arrested as security for claims to be determined in arbitration. Although not binding on the Malaysian Courts, the decision is persuasive given the importance of interpreting international conventions uniformly.

 

Based on The Taikoo Brilliance, a cargo claimant ought to:-

 

1. 1. ascertain at the outset whether the bill of lading contains or incorporates an arbitration clause or an exclusive jurisdiction clause, as proceedings commenced in breach of such a clause will not constitute “suit”;

 

2. 2. commence substantive proceedings in the competent forum within one year of the delivery or the date when the goods should have been delivered, or obtain the carrier’s agreement to an extension of time, regardless of whether a vessel has been arrested or security has been obtained elsewhere; and

 

3. 3. not assume that a general statement on the bill of lading that part of the cargo is carried on deck takes all or part of that cargo outside the HVR and the one-year time bar.

[1] Paragraph 5

[2] Paragraph 7.

[3] Paragraph 40.

[4] Paragraph 39.

[5] Paragraphs 46 to 50.

[6] Paragraphs 66 and 67.

[7] Paragraph 68.

[8] Paragraphs 71 and 73.

 

Disclaimer: This article is for general information only and does not constitute legal advice or legal opinion. It should not be relied upon as a substitute for specific legal advice. No person should act (or refrain from acting) based on this article without obtaining advice on the specific facts and circumstances. Halim Hong & Quek does not accept responsibility or liability for any loss or damage arising from reliance on this article. Halim Hong & Quek reserves the right to update, amend or withdraw this article at any time. All rights reserved.

 

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About the authors

Siva Kumar Kanagasabai
Senior Partner
Head of Dispute Resolution Practice Group
Halim Hong & Quek
kumar@hhq.com.my

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Pavidren Sivananda Ratnam
Associate
Dispute Resolution
Halim Hong & Quek
pavidren@hhq.com.my

○

Lishantan Kumar
Associate
Dispute Resolution
Halim Hong & Quek
lishanthan@hhq.com.my

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