222 LLOYD’S LAW REPORTS [2012] Vol 1

PART 4 The “Genius Star 1” [QBD (Comm Ct)

QUEEN’S BENCH DIVISION Hague, Hague-Visby Rules or Hamburg Rules

therein.
(COMMERCIAL COURT)
Time Bar
31 October; 28 November 2011 (6) Recovery under this Agreement by an Owner
or Charterer shall be deemed to be waived and
——————
absolutely barred unless written notification of the
cargo claim has been given to the other party to the
M H PROGRESS LINES SA charterparty within 24 months of the date of delivery
v of the cargo or the date the cargo should have been
ORIENT SHIPPING ROTTERDAM BV delivered, save that, where the Hamburg Rules or
(THE “GENIUS STAR 1”) any national legislation giving effect thereto are
compulsorily applicable by operation of law to the
contract of carriage or to that part of the transit that
[2011] EWHC 3083 (Comm) comprised carriage on the chartered vessel, the
period shall be 36 months. Such notification shall if
possible include details of the contract of carriage,
Before Mr Justice TEARE the nature of the claim and the amount claimed.
...
Charterparty (Time) — NYPE form — Charterparty
incorporating NYPE Inter-Club Agreement 1996 — Governing Law
Time bar — Charterparty expressly providing that (9) This Agreement shall be subject to English
claims to be made within 12 months of final dis- Law and Jurisdiction, unless it is incorporated into
charge — NYPE Inter-Club Agreement providing the charterparty (or the settlement of claims in
that claims barred unless notified in writing within respect of cargo under the charterparty is made sub-
24 months of delivery of cargo — Whether 12 ject to this Agreement), in which case it shall be
months or 24 months limit applied to cargo claim. subject to the law and jurisdiction provisions gov-
The vessel Genius Star 1 was chartered by the claim- erning the charterparty.”
ant owners to Orient Shipping (the head charterers) on The vessel was sub-chartered to Nordana for a single
an amended NYPE 1946 form. Clause 26 provided: trip time charter. She loaded a cargo of wind turbine
“Clause 26 parts for carriage from Brake, Germany, to Albany,
. . . all cargo claims to be settled as per Nype USA. The cargo was discharged at Albany on 19 Sep-
Interclub Agreement 1996 and any amendments tember 2006. A cargo claim was brought against the
thereto, same as when trading for their own sub-charterers by cargo interests. The sub-charterers
account.” settled the claim for US$425,000 on 21 February 2008
Clause 39 contained a London arbitration clause, and and sought to recover that sum from the head charterers
also provided: either as an indemnity pursuant to ICA 96 or by way of
damages for breach of the sub-charter. The head chart-
“Any claim must be made in writing and the erers in turn sought to pass the claim up the line to the
claimant’s arbitrator appointed within 12 months of owners under the head charter.
final discharge and where this provision is not com-
plied with the claim shall be deemed to be waived Although the sub-charterers were aware of the cargo
absolutely barred.” claim within the one-year limitation period prescribed
by clause 39, they only notified the head charterers in
The NYPE Inter-Club Agreement 1996 (ICA 96)
was analogous to “knock-for-knock” agreements in writing on 22 January 2008 and did not commence
motor insurance, and provided for a more or less proceedings against the head charterers within 12
mechanical apportionment of financial liability. months of final discharge.
The relevant provisions of ICA 96 were as A dispute arose as to whether or not the one-year
follows: time limit in clause 39 of the head charter applied to
cargo claims which were to be settled and apportioned
“(1) This Agreement applies to any charterparty
in accordance with ICA 96.
which is entered into after the date hereof on the
New York Produce Exchange Form 1946 or 1993 or The arbitrators, on the determination of preliminary
Asbatime Form 1981 (or any subsequent amend- issues, held that the time limit in clause 39 did not
ment of such forms). apply to a cargo claim which was to be settled and
(2) The terms of this Agreement shall apply not- apportioned in accordance with ICA 96.
withstanding anything to the contrary in any other The owners appealed to the High Court, submitting
provision of the charterparty; in particular the provi- that the arbitrators had erred in law.
sions of Clause (6) (time bar) shall apply notwith- ————Held by QBD (Comm Ct) (TEARE J) that the
standing any provision of the charterparty or rule of appeal would be dismissed. The time bar in clause 39
law to the contrary. did not apply to claims under ICA 96. Clause 39 and
... ICA 96 could be read together by virtue of clause (2) of
(5) This Agreement applies regardless of legal ICA 96 expressly resolving the conflict between the
forum or place of arbitration specified in the charter- time bar in clause 39 and the time bar in clause (6) of
party and regardless of any incorporation of the ICA 96 in favour of the latter (see para 41).
[2012] Vol 1 LLOYD’S LAW REPORTS 223

QBD (Comm Ct)] The “Genius Star 1” [TEARE J

—————— JUDGMENT
The following cases were referred to in the
judgment: Mr Justice TEARE:
A/S Det Dansk-Franske Dampskibsselskab v Com- 1. This is an appeal pursuant to section 69 of the
pagnie Financiere d’Investissements Transatlan- Arbitration Act 1996 brought with the leave of the
tiques SA (The Himmerland) [1965] 2 Lloyd’s court. The appeal is against an award of Mr O’Do-
Rep 353; novan, Mr Marshall and Mr Farrington dated 28
A/S Iverans Rederi v KG MS Holstencruiser January 2011. The award was made in two related
GmbH (The Holstencruiser) [1992] 2 Lloyd’s but not consolidated references which determined
Rep 378; preliminary issues which arose in both references.
Ben Line Steamers Ltd v Pacific Steam Navigation Those issues concerned the interplay between the
Co (The Benlawers) [1989] 2 Lloyd’s Rep 51; Inter-Club Agreement 1996 (“ICA 96”) and an
Cobelfret Bulk Carriers NV v Swissmarine Services amended Centrocon arbitration clause.
SA (The Lowlands Orchid) [2009] EWHC 2883 2. The appeal was brought by the owners of the
(Comm); [2010] 1 Lloyd’s Rep 317; vessel Genius Star 1, M H Progress Lines SA
D/S A/S Idaho v Peninsular and Oriental Steam (“Progress”), and was resisted by Nordana Project
Navigation Co (The Strathnewton) (CA) [1983] 1 & Chartering (“Nordana”), the sub-charterers. Ori-
Lloyd’s Rep 219; ent Shipping Rotterdam BV (“Orient”), the charter-
E B Aaby’s Rederi A/S v The Union of India (The ers, did not appear but were content to be bound by
Evje) (HL) [1974] 2 Lloyd’s Rep 57; [1975] AC the decision of this court.
797; 3. The appeal was argued by reference to the
Fiona Trust & Holding Corporation v Privalov terms of the head charterparty which was a time
(HL) [2007] UKHL 40; [2008] 1 Lloyd’s charterparty dated 30 May 2005 on an amended
Rep 254; NYPE 1946 form. The charter was for a period of
Homburg Houtimport BV v Agrosin Private Ltd about two years +/− one month in charterers’ option
(The Starsin) (HL) [2003] UKHL 12; [2003] 1 with a further optional third year. The sub-charter
Lloyd’s Rep 571; [2004] 1 AC 715; was for a single trip time charter duration 20 to 25
days dated 25 August 2006.
Mary Elle, The, 3 August 1990, unreported;
4. The material terms of the head charter were as
Sabah Flour and Feedmills Sdn Bhd v Comfez Ltd follows:
(CA) [1988] 2 Lloyd’s Rep 18;
Sparta Navigation Co v Transocean (The Stepha- “Clause 26
nos) [1989] 1 Lloyd’s Rep 506. . . . Charterers to pay any extra crew war bonus,
crew, and all other matters, all cargo claims to be
—————— settled as per Nype Interclub Agreement 1996
and any amendments thereto, same as when
trading for their own account.
This was an appeal by M H Progress Lines SA ...
the owners of the vessel Genius Star 1 from an
arbitration award determining, in favour of the Clause 39
charterers of the vessel, Orient Shipping Rotterdam [1] All disputes from time to time arising out
BV, and the sub-charterers, Nordana Project & of this contract shall unless the parties agree
Chartering, that a cargo claim settled in accordance forthwith on a single arbitrator, be referred to the
with the NYPE Interclub Agreement 1996 was not final arbitrament of two arbitrators carrying on
time-barred. business in London, who shall be members of the
Nigel Jacobs QC, instructed by Clyde & Co LLP, Baltic Exchange and engaged in the shipping
for the owners; Nigel Cooper QC, instructed by trades, one to be appointed by each of the parties,
Bentleys Stokes & Lowless, for the sub-charterers; with power to such arbitrators to appoint an
the head charterers did not appear. umpire.1
The further facts are stated in the judgment of [2] Any claim must be made in writing and the
Teare J. claimant’s arbitrator appointed within 12 months
Judgment was reserved. of final discharge and where this provision is not
complied with the claim shall be deemed to be
Monday, 28 November 2011 waived absolutely barred.

1 As noted in para 8 of the award, the parties agreed that clause 39 be

—————— amended by reference to a third arbitrator.
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TEARE J] The “Genius Star 1” [QBD (Comm Ct)

[3] No award shall be questioned or invali- the provisions of Clause (6) (time bar) shall
dated on the ground that any of the arbitrators is apply notwithstanding any provision of the char-
not qualified unless objections to his acting be terparty or rule of law to the contrary.
taken before the award is made. ...
[4] In the event the amount of claim does not (5) This Agreement applies regardless of legal
exceed US$25,000 the parties agree to refer any forum or place of arbitration specified in the
dispute to a sole arbitrator in accordance with the charterparty and regardless of any incorporation
LMAA Claims Procedure 1989. of the Hague, Hague-Visby Rules or Hamburg
[5] This Charter Party shall be governed by Rules therein.
and construed in accordance with English
Time Bar
Law.2
... (6) Recovery under this Agreement by an
Owner or Charterer shall be deemed to be waived
Clause 50 and absolutely barred unless written notification
. . . Clause Paramount . . . deemed to be incor- of the cargo claim has been given to the other
porated in this Charter Party.”3 party to the charterparty within 24 months of the
5. ICA 96 is the third edition of the Inter-Club date of delivery of the cargo or the date the cargo
Agreement.4 It applies (pursuant to its express should have been delivered, save that, where the
terms) where a cargo claim has been properly set- Hamburg Rules or any national legislation giving
tled or compromised or paid by the owners or the effect thereto are compulsorily applicable by
charterers and “apportionment” of such claim is operation of law to the contract of carriage or to
sought. In the first case dealing with the Inter-Club that part of the transit that comprised carriage on
Agreement, D/S A/S Idaho v Peninsular and Ori- the chartered vessel, the period shall be 36
ental Steam Navigation Co (The Strathnewton) months. Such notification shall if possible
[1983] 1 Lloyd’s Rep 219, the agreement was include details of the contract of carriage, the
described as “analogous to ‘knock-for-knock’ nature of the claim and the amount claimed.
agreements in the field of motor insurance; the ...
essential feature of such agreements is to avoid any
investigation of blameworthiness as between the Governing Law
parties for the events which have occurred . . . [it] (9) This Agreement shall be subject to English
provides for a more or less mechanical apportion- Law and Jurisdiction, unless it is incorporated
ment of financial liability”; per Kerr LJ at pages into the charterparty (or the settlement of claims
223 and 224. Experience has shown however that in respect of cargo under the charterparty is made
some evidence is still required to operate the agree- subject to this Agreement), in which case it shall
ment and the agreement has itself given rise to be subject to the law and jurisdiction provisions
litigation; see Ben Line Steamers Ltd v Pacific governing the charterparty.”
Steam Navigation Co (The Benlawers) [1989] 2 7. The material facts of the instant case are that
Lloyd’s Rep 51 at page 62 per Hobhouse J, A/S Nordana loaded a cargo of 108 pieces of wind
Iverans Rederi v KG MS Holstencruiser GmbH turbine parts for carriage from Brake, Germany, to
(The Holstencruiser) [1992] 2 Lloyd’s Rep 378 at Albany, USA. The cargo was discharged at Albany
page 389 per Hobhouse J and P&I Clubs Law and on 19 September 2006. A claim was brought
Practice by Hazelwood and Semark, 4th Edition, against Nordana by General Electric in respect of
para 15.42. the carriage of the cargo. Nordana settled the claim
6. The material provisions of ICA 96 were as for US$425,000 on 21 February 2008 and sought to
follows: recover that sum (together with related costs) from
“(1) This Agreement applies to any charter- Orient either as an indemnity pursuant to ICA 96 or
party which is entered into after the date hereof by way of damages for breach of the sub-charter.
on the New York Produce Exchange Form 1946 Orient has in turn sought to pass the claim “up the
or 1993 or Asbatime Form 1981 (or any sub- line” to Progress under the head charter.
sequent amendment of such forms). 8. Although Nordana must have been aware of
(2) The terms of this Agreement shall apply General Electric’s cargo claim within the one-year
notwithstanding anything to the contrary in any limitation period prescribed by clause 39 (an
other provision of the charterparty; in particular amended form of the Centrocon arbitration clause),
Nordana only notified Orient in writing on 22
2 The paragraph numbers in clause 39 are not in the text of the charter-
party but have been inserted by me for ease of reference. January 2008 and did not commence proceedings
3 This had the effect of incorporating the Hague Rules into the against Orient within 12 months of final discharge.
charterparty.
4 There is now a 4th Edition dated September 2011; see Scrutton on For their part Orient did not seek or obtain an
Charterparties and Bills of Lading, 22nd Edition, at page 510. extension of time from Progress.
[2012] Vol 1 LLOYD’S LAW REPORTS 225

QBD (Comm Ct)] The “Genius Star 1” [TEARE J

The issue of law party. Do those provisions include the time bar in
clause 39?
9. The issue of law which has to be determined is 13. The terms of the charterparty and the incor-
whether or not the one-year time limit in clause 39 porated ICA 96 must be read as a whole. In seeking
of the head charter between Progress and Orient to do that account must be taken of clause (2) of
applies to cargo claims which are to be settled and ICA 96 which expressly deals with the applicability
apportioned in accordance with ICA 96. In other of the time bar in clause (6) of ICA 96. It states that
words, are the respective claims of Nordana against “the provisions of clause (6) (time bar) shall apply
Orient and Orient against Progress deemed to be notwithstanding any provision of the charterparty
waived and absolutely barred because both Nor- or rule of law to the contrary”. It seems to me, or at
dana and Orient failed to make any claim in writing any rate my first impression was, that clause (2)
and appoint an arbitrator within 12 months of final answers both questions of construction identified in
discharge in compliance with clause 39 of the the previous paragraph. The time bar in clause (6)
respective charters? It was common ground that of ICA applies to claims under ICA 96 notwith-
neither Nordana nor Orient in fact commenced pro- standing the contrary time bar in clause 39 of the
ceedings within 12 months of final discharge. charterparty. Clause (9) of ICA 96 is not to be read
10. Mr Jacobs QC, counsel for Progress, sub- as incorporating the time bar in the law and juris-
mitted that the arbitrators were wrong to hold that diction provisions in clause 39 of the charterparty
the time limit in clause 39 did not apply to a cargo because the applicable time bar is expressly stated
claim which was to be settled and apportioned in by clause (2) of ICA 96 to be that in clause (6) of
accordance with ICA 96. Mr Cooper QC, counsel ICA 96.
for Nordana, submitted that the arbitrators were 14. I have therefore tested that first impression
right so to hold. Wilford, Time Charters, 6th Edi- against the several arguments advanced by Mr
tion, at paras 20.71 to 20.72 supports Mr Jacobs. Jacobs in support of his submission that the time
Hazelwood and Semark, P&I Clubs Law and Prac- bar in clause 39 of the charterparty applied to
tice, 4th Edition, at para 15.48 supports Mr Cooper claims under ICA 96.
and the arbitrators.
11. Clause 26 of the head charter provides that The differing “purposes” of para [2] of clause 39
“all cargo claims” are to be settled as per ICA 96. and clause (6) of ICA 96.
Clause (6) of ICA 96 contains a time bar provision
with regard to recovery under ICA 96, namely, that 15. The assumption underlying the construction
recovery will be barred unless written notification of the charterparty which appeared to me on first
of the cargo claim has been given to the other party impression to be correct is that there is a conflict
within 24 months of the date of delivery of the between para [2] of clause 39 and clause (6) of ICA
cargo or the date the cargo should have been deliv- 96. However, it was said that there was in fact no
ered (save where the Hamburg Rules apply, in conflict between the two clauses because para [2] of
which case the period shall be 36 months). Clause clause 39 deals with the time for the commence-
(9) of ICA 96 provides for English law and jurisdic- ment of substantive arbitration proceedings,
tion unless ICA 96 is incorporated in a charterparty whereas clause (6) of ICA 96 deals with the time
in which case it provides for the law and jurisdic- for written notification of a claim.
tion provisions governing the charterparty. Clause 16. Mr Jacobs adopted the argument set out in
39 of the charterparty provides for arbitration of Wilford, Time Charters, 6th Edition, at paras 20.71
“all disputes arising out of this contract” and and 20.72 which may be summarised as follows.
requires that “any claim” must be made in writing Clause (6) of ICA 96 is not concerned with a
and the claimant’s arbitrator appointed within 12 limitation period in the sense of the period within
months of final discharge, failing which the claim which arbitration or litigation must be commenced.
shall be barred. (Clause 50 of the charterparty That limitation period may be either statutory or
incorporates the Hague Rules and in particular the contractual. By contrast clause 39 para [2] intro-
time bar in article III rule 6. It is however not duces a contractual limitation period, namely, a
disputed that that time bar does not apply to claims period of 12 months within which arbitration must
under ICA 96.) be commenced. That provision is not contrary to
12. These contractual provisions give rise to two the time bar in clause (6) of ICA 96 because the
possible difficulties of construction. First, both latter does not deal with the period within which the
clause 39 of the charterparty and clause (6) of ICA arbitration must be commenced but instead deals
96 provide for time bars but they are in different with the time within which written notification of
terms. Which applies to cargo claims under the claim must be given.
ICA 96? Second, clause (9) of ICA 96 incorporates 17. Thus the effect of the two provisions, on Mr
the law and jurisdiction provisions of the charter- Jacobs’ argument, is that a claim under ICA 96 will
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TEARE J] The “Genius Star 1” [QBD (Comm Ct)

be defeated if arbitration proceedings are not com- not appear to have considered such a limit uncom-
menced within 12 months of final discharge (para mercial. The reason why it is not so regarded may
[2] of clause 39) or written notification of the claim be that, in very many cases, once a claim has been
is not given within 24 months of the date of deliv- notified within 24 months, apportionment pursuant
ery of the cargo (clause (6) of ICA 96). to ICA 96 is a mechanical exercise and arbitration
18. The opinion expressed in Wilford is to be will usually be unnecessary. (By contrast the arbi-
contrasted with the opinion expressed in Hazel- trators found the suggestion that there must be an
wood and Semark at para 15.48 that, as a result of arbitration commenced within 12 months with a
clause (2) of ICA 96, “the time bar provision in further 12 months to submit written notification of
clause (6) of the Agreement will prevail over any a claim “clearly uncommercial”: see para 23 of the
other right which might appear to be in conflict, reasons.)
such as a Centrocon Arbitration Clause”. 22. There is a further respect in which para [2] of
19. It is of course correct that ICA 96 does not clause 39 is inconsistent with clause (6) of ICA 96.
provide for a period within which litigation or arbi- The requirement in the former, that claims must be
tration must be commenced. However, it does pro- made in writing within 12 months, is inconsistent
vide for a time bar, namely a requirement which, if with the requirement in the latter that claims should
not complied with, results in the claim being be notified in writing within 24 months. It was
suggested by Mr Jacobs (and also by Wilford, Time
waived and absolutely barred. Clause 39 also pro-
Charters at para 20.72) that the requirement in
vides for a time bar, namely a requirement which, if
clause 39 that claims be made in writing within 12
not complied with, results in the claim being
months is not inconsistent with the requirement in
waived and absolutely barred. The requirement in
ICA 96 that written notification be given “within 24
each case is different. In the one case it is a require- months”. I agree that 12 months is “within 24
ment that written notification of the claim be noti- months” but clause 39 provides that a claim will be
fied in writing within 24 months of the date of waived and absolutely barred if it is not made in
delivery. In the other case it is a requirement that a writing within 12 months. Under ICA 96 written
claim be made in writing and arbitration com- notification of a claim may be given after 12
menced within 12 months of final discharge. months has expired and before 24 months has
Because the requirement constituting the time bar expired without the claim being waived and abso-
in clause 39 is different from the requirement con- lutely barred. Clause 39 is therefore contrary to
stituting the time bar in ICA 96 clause 39 is, in my ICA 96 in this respect also.
judgment, “contrary” to ICA 96.
23. The reason why ICA 96 provides for written
20. That is the manner in which the charterparty notification of claims to be made within 24 months
would be understood by a reasonable man having (or within 36 months in the case of the Hamburg
the background knowledge reasonably available to Rules) is not hard to identify. It provides the person
the parties. If he asked himself what time bar gov- seeking apportionment of a cargo claim under ICA
erns claims under ICA 96 he would find two poten- 96 with one year in which to give written notifica-
tially applicable time bar provisions expressed in tion of his claim after the time limited for claims to
different terms. He would also note that clause (2) be made against the owners or charterers by third
of ICA 96 expressly dealt with the question of what parties (either one year under the Hague Rules or
should happen if there were a time bar in the char- two years under the Hamburg Rules) has expired;
terparty contrary to the time bar provision in ICA see Hazelwood and Semark, P&I Clubs Law and
96, namely, that the time bar provision in ICA 96 Practice at para.15.66. Thus if a claim is made
“shall apply”. He would conclude that the time bar against the owner or charterer just before the expiry
in ICA 96 is the applicable time limit. of the one or two-year limit the owner or charterer,
21. Mr Jacobs submitted that the result of that as the case may be, has a further 12 months in
construction of the charterparty is that there is a six- which to give the other notice of his claim for
year statutory time limit for commencing arbitra- apportionment. Were the time limit in clause 39 to
tion (assuming that written notification of the claim apply the owner or charterer against whom a claim
has been given within two years) which, he said, is made just before the expiry of the one-year limit
was “incongruous” and unlikely to reflect the par- might be unable to give notice of his claim for
ties’ intentions. There is some force in this but I am apportionment before the one-year time limit in
not persuaded that there is so much force in it that clause 39 had expired.
clause 39 and ICA 96 cannot be read together as a 24. I therefore remain of the view that para [2] of
whole in the manner I have suggested or that Mr clause 39 is “contrary” to clause (6) of ICA 96 and
Jacobs’ construction of the charterparty must be that such conflict is resolved by clause (2) of
right. The commercial arbitrators recognised that ICA 96 providing that the applicable time limit is
there would be a six-year limitation period and do clause (6) of ICA 96.
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QBD (Comm Ct)] The “Genius Star 1” [TEARE J

The “interdependence” of paras [1] and [2] of Additional clauses compared with standard
clause 39 clauses and incorporated clauses
25. It was said that paras [1] and [2] of clause 39 32. It was submitted that clause 39, being an
cannot be divorced from each other. Thus in E B additional clause expressly added to the charter-
Aaby’s Rederi A/S v The Union of India (The Evje) party, should prevail over the standard form and
[1975] AC 797 it was held that where a claim for over any provision incorporated by reference; see
general average is made which arises out of the Cobelfret Bulk Carriers NV v Swissmarine Services
SA (The Lowlands Orchid) [2010] 1 Lloyd’s Rep
charterparty such claim is governed by both paras
317 at para 20 per Beatson J. However, for the
[1] and [2] of the Centrocon clause. They cannot be
reasons I have given clause 39 and ICA 96 can be
divorced from each other; see the speech of Lord read together so there is no need for any term to
Morris at page 810A to F. “prevail” over another. In any event the incorpora-
26. I agree that where a claim other than a cargo tion of ICA 96 by clause 26 was itself the result of
claim pursuant to ICA 96 is concerned it is plain an addition to the standard form of the NYPE form.
that both paragraphs must apply. However, in the If clause 39 and ICA 96 could not be read together
present case there are words in the charterparty the applicable rule of construction would, in my
which show that the parties intended that the time judgment, be that which states that “general things
bar in para [2] of clause 39 was not to apply to do not derogate from special things”: see Sabah
cargo claims under ICA 96, namely clause (2) of Flour and Feedmills Sdn Bhd v Comfez Ltd [1988]
ICA 96. Thus the parties intended that, to that 2 Lloyd’s Rep 18 at page 20 col 2 per Staughton LJ.
extent, there was to be a divorce between paras [1] On that basis the provision which applies specially
and [2] of clause 39. to claims under ICA 96 would prevail over the
general provision (para [2] of clause 39). But clause
(2) of ICA 96 makes it unnecessary to have resort to
“Any claim” in para [2] of clause 39 any such principles of construction.
27. It was said that para [2] of clause 39 refers to
“any claim” without restriction. “Any” does not Authorities
normally permit of any restriction.
33. There are no decided cases on the true con-
28. But in the present case para [2] must be read struction of ICA 96 but it is necessary to refer to
with ICA 96, clauses (2) and (6) of which indicate three cases which have considered the Inter-Club
an intention that the words “any claim” in para [2] agreements in its previous versions. The first case
of clause 39 were not to apply to claims under was The Strathnewton. This case was decided on
ICA 96. the basis of the original form of the Interclub
Agreement which dated from 1970. The question
Paragraphs [1] and [3] to [5] was whether the time bar in article III rule 6 of the
Hague Rules (which had also been incorporated
29. It was said that these paragraphs apply to any into the charterparty) applied to claims for the
dispute including one under ICA 96 and therefore apportionment of cargo claims under the Inter-Club
the parties must have intended that clause 39 was to Agreement. The Court of Appeal held that it did
apply to such disputes in its entirety. not. Kerr LJ held (at page 225 col 2) that the Inter-
Club Agreement “cuts right across any allocation of
30. I agree that those paragraphs do apply to functions and responsibilities based on the Hague
disputes under ICA 96 but, having regard to clauses Rules”. In those circumstances article III rule 6
(2) and (6) of ICA 96, it does not follow that the “has no place in a settlement between owners and
parties intended that para [2] of clause 39 would charterers under the Inter-Club Agreement”; see
apply to such disputes. page 226 col 1. It does not appear that the form of
Inter-Club Agreement then in use contained its own
Cargo claims other than those under ICA 96 time bar. None is mentioned by Kerr LJ.
34. The second case is The Benlawers. This case
31. It was said that since other claims relating to also considered the original 1970 form of the Inter-
cargo not covered by ICA 96 would be governed by Club Agreement (see page 54 col 2). One question
the entirety of clause 39 it would be surprising if which arose was whether the incorporation of the
cargo claims which were subject to ICA 96 were Inter-Club Agreement affected liability under the
not so governed. But clauses (2) and (6) of ICA 96 charterparty (see page 59 col 1 and page 60 col 1).
make clear, it seems to me, that cargo claims sub- Hobhouse J. held that it followed from the decision
ject to ICA 96 are not governed by the time bar in in the Strathnewton that it did. He pointed out (at
para [2] of clause 39 of the charterparty. page 56 col 1) that the references in that case to the
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TEARE J] The “Genius Star 1” [QBD (Comm Ct)

Hague Rules were references to the Hague Rules as time bar in clause (6) of ICA 96 is applicable to
incorporated in to the charterparty “and therefore claims under ICA 96.
are really a reference to the charterparty terms.” He 37. It seems to me that clause (2) of ICA 96
said (at page 56 col 2): “The essence of that deci- states expressly what Kerr LJ had said in The
sion was that the inter-Club Agreement provides its Strathnewton was the effect of the incorporation of
own code which, in that case, was independent of the Inter-Club Agreement, namely, that the Inter-
the incorporation of the Hague Rules into the Club Agreement “cut across” the liabilities and
charterparty”.
defences set out in the other terms of the charter-
35. In May 1984 there was an amended Inter- party, such as the liabilities and defences of the
Club Agreement which included a provision that Hague Rules when incorporated into the charter-
any claims under the Agreement should be notified party. Thus clause (2) of ICA 96 states that “the
to the other party in writing as soon as possible but terms of this Agreement shall apply notwithstand-
in any event within two years from the date of ing anything to the contrary in any other provision
discharge. There was no provision comparable to of the charterparty”. It then gives a particular exam-
clause (2) of ICA 96. The 1984 edition of the Inter- ple; the provisions of the time bar in clause (6) shall
Club Agreement was considered in the third case, apply notwithstanding any provision of the charter-
The Mary Elle, an unreported decision of Evans J party to the contrary.
given on 3 August 1990. In that case the charter-
party provided that all cargo claims were to be 38. Clause 50 of the charterparty incorporates the
settled according to the Inter-Club Agreement Hague Rules, including the time bar provision in
amended May 1984. The charterparty also included article III rule 6. It seems to me that, just as the time
an arbitration clause on the Centrocon form of arbi- bar in clause 39 is contrary to the time bar in ICA
tration clause providing for arbitration to be com- 96 clause (6), so the time bar in article III rule 6 of
menced within three months of redelivery. The the Hague Rules (which discharges the carrier from
question of construction was whether the three- liability if suit is not commenced within 12 months
month time limit in the Centrocon arbitration clause of delivery) is contrary to the time bar in ICA 96.
applied to claims under the Inter-Club Agreement. 39. Progress accepts that although the Hague
Evans J held that the time limit in the Centrocon Rules have been incorporated into the head charter
arbitration clause applied with the result that the by clause 50 it follows from The Strathnewton that
claim was time-barred because arbitration had not the time bar in article III rule 6 does not apply to
been commenced within the three-month period. claims under ICA 96. However, Progress maintains
His reasoning was that where parties have agreed a that the time bar in clause 39 does apply to such
three-month time limit for the commencement of claims. Mr Jacobs sought to justify this stance by
arbitration in respect of all claims it would take saying that neither The Strathnewton nor The Ben-
much to indicate that, notwithstanding that express
lawers concerned an express time bar provision
and apparently all-embracing agreement, the parties
which was part of a clause applicable to “all dis-
nevertheless intended that some term of an incorpo-
putes” and specifically referred to “all claims”.
rated document should impose a different limit in
Clause 39 was a “stand-alone” clause dealing with
some but not all of the cases with which that other
clause was concerned. The judge had in mind that the application of English law and arbitration and,
not all cargo claims were within the scope of the as an integral part of the arbitration process, the
Inter-Club Agreement and on this account distin- time limit for bringing claims by way of arbitration.
guished the decision in Sabah Flour v Comfez. He I agree that clause 39 is a stand-alone provision in
made no reference either to The Strathnewton or to respect of “all claims” whereas article III rule 6 is
The Benlawers. part of the package of rights and liabilities con-
tained in the Hague Rules and only bars cargo
36. The Inter-Club Agreement was further claims against the carrier. But I am unable to accept
amended in 1996. The most material addition was
the conclusion that whereas the time bar in article
of course clause (2) which expressly deals with any
III rule 6 does not apply to claims under ICA 96 the
inconsistency between the terms of ICA 96 and the
time bar in clause 39 does apply to such claims.
terms of the charterparty in which it had been incor-
porated. Whether or not that amendment was in Each is a time bar (though expressed in different
reaction to the decision in The Mary Elle (as to terms) and each is contrary to ICA 96 because each
which there was no evidence) the amendment cer- leads to a time bar operating on a claim in different
tainly enables that decision to be distinguished. circumstances from those in which the time bar in
Clause (2) of ICA 96 makes clear, for the reasons I ICA 96 applies.
have already given, that, notwithstanding the appar- 40. Mr Jacobs relied upon a number of other
ently unlimited reach of para [2] of clause 39, the cases in support of his argument, including Sparta
[2012] Vol 1 LLOYD’S LAW REPORTS 229

QBD (Comm Ct)] The “Genius Star 1” [TEARE J

Navigation Co v Transocean (The Stephanos) Conclusion

[1989] 1 Lloyd’s Rep 506, A/S Det Dansk-Franske 41. For all these reasons I have reached the
Dampskibsselskab v Compagnie Financiere d’In- conclusion that para [2] of clause 39 does not apply
vestissements Transatlantiques SA (The Himmer- to claims under ICA 96. Both clause 39 and ICA 96
land) [1965] 2 Lloyd’s Rep 353, Fiona Trust & can be read together by virtue of clause (2) of ICA
Holding Corporation v Privalov [2008] 1 Lloyd’s 96 expressly resolving the conflict between the time
Rep 254 and Homburg Houtimport BV v Agrosin bar in clause 39 and the time bar in clause (6) of
Private Ltd (The Starsin) [2003] 1 Lloyd’s Rep ICA 96 in favour of the latter. That is the manner in
571; [2004] 1 AC 715. However, none of these which the clauses would be understood by a reason-
cases concerned the interplay between the time bar able man having the background knowledge availa-
in ICA 96 (or its predecessor) and another time bar ble to both owners and charterers. The arbitrators
in the charterparty which incorporated ICA 96 (or reached the correct conclusion and the appeal must
its predecessor). therefore be dismissed.