Clause paramount – the one year time limit and inconsistent provisions

In a Judgment handed down last Thursday in the case of “The Alion” (Tanga Pharmaceuticals Plastics Limited and others v Emirates Shipping Line FZE [2025] EWHC 368 (Comm)), on a summary judgment application the Commercial Court found against a carrier (“Owners”) who had sought to escape liability on the basis of contractual time-bar provisions which imposed a shorter time limit than the 1-year time limit set out in the Hague Rules.

The Claimants had an interest in 548 containers and their contents (the “Cargo”), shipped aboard the MV “ALION” under a number of identical Bills of Lading (the “Bills”) for carriage from India, the UAE and Saudi Arabia, to Mombasa, Kenya. The Claimants’ claim was for an indemnity against salvage costs and particular average, after the Vessel’s main engine failed during the voyage.

The Bills contained a Clause Paramount on their reverse incorporating the Hague Rules into the contract of carriage. The Hague Rules would not have otherwise applied compulsorily.

The clauses on the rear of the Bills went on to impose a short notice requirement (within 20 days of delivery) in relation to any claims for charges, expenses, or anything other than loss or damage to the goods. They also stipulated that any claims will be time-barred if suit is not brought and process served within 1 year of delivery. The latter point differs from the position under English Law, which only requires that a Claim Form be issued to protect time, and that it may be served at a later date (as had been the case in this instance).

Articles III(6) and (8) of the Hague Rules state in relevant part as follows:

“6. … In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered…

 …

8. Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with goods arising from negligence, fault, or failure in the duties and obligations provided in this article, or lessening such liability otherwise than as provided in this convention, shall be null and void and of no effect…”

The case raised interesting questions around how the provisions of the Hague Rules may be modified in circumstances where they apply as a matter of contract.

The judge acknowledged the general rule from Finagra v OT Africa Line [1998] that, where provisions are incorporated from a text outside of the contract, the express terms of the contract will usually take precedence. This will however depend on the circumstances and on the proper construction of the contract.

The Judge noted that such an exercise in contractual construction can be complex, but that he did not consider it to be so in this case. Finding against Owners on the question of whether service must have been effected within the one year time bar, he found that the provisions of the Hague Rules took precedence over the conflicting provisions of the contract of carriage for reasons summarised (in part) below:

(i) Clause 2 was titled “Clause Paramount”. The meaning of these words is well-known within the industry to mean that the clauses of the Hague Rules are “paramount”, and that they will override any inconsistent provision of the contract.

(ii) The Clause Paramount did not simply incorporate the Hague Rules; it notably omitted Article IX and set out specific circumstances where Article III(8) would, and would not, apply. If Owners intended that Article III(8) should not apply at all, the Clause Paramount could have been drafted to make this clear.

(iii) If it had been intended that the Claimants were to forego the valuable rights under Article III rules 6 and 8, clear wording evidencing this intention would be required, as per MUR v RTI [2024].

For the reasons stated above it was not necessary for the Judge to rule on the question of whether the 20 day notice requirement applied, as this was inconsistent with the position under the Hague Rules.

This judgment reminds us of the complexity of determining contractual time limits in circumstances where there is no compulsorily applicable international convention.  Where there is ambiguity, a careful and considered approach must be taken to ensure that time limits are not inadvertently overlooked or misunderstood.