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	England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Linea Naviera Paramaconi SA v Abnormal Load Engineering Ltd [2001] EWHC 534 (Comm) (23 February 2001) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2001/534.html Cite as: [2001] 1 Lloyd's Rep 763, [2001] 1 All ER (Comm) 946, [2001] EWHC 534 (Comm)

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IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		23rd February 2001

Mr Justice Tomlinson:

1. The court has before it a preliminary issue directed to be tried by Longmore J. The issue is whether part of the Defendants' counterclaim a draft of which was served on 31 July 2000 is time barred. The issue arises only in relation to that part of the counterclaim for service of which conditional permission was granted by Longmore J on 13 September 2000. Longmore J declined to permit part of the proposed counterclaim to be served in any event.
2. The Claimants are the owners of the barge "Sophie J". By a freight agreement contained in or evidenced by a fax dated 5 March 1999 addressed to the Defendants the Claimants agreed to transport on their barge from Puerto Ordaz, Venezuela, to Point Lisas, Trinidad, a ship loader and a ship unloader, which are two specialised cranes. The cranes appear to have been the property of an Italian company, Techint Compagnia Tecnica Internazionale S.p.a. ("Techint"). The barge was to be towed by a "suitable tug", the "Bravo".
3. The Claimants assert that the Defendants were their counterparty to the freight agreement. The freight agreement incorporated the terms and conditions of a booking note. The booking note in turn contained a General Paramount clause and a cesser clause. The General Paramount clause incorporated the Hague Rules. The cesser clause provided for the contract contained in or evidenced by the book note to be superseded, except as to demurrage and deadfreight, by the terms of the bill of lading the terms of which were in turn to be found set out on the reverse of the booking note.
4. In due course there was issued by the Claimants a bill of lading in respect of the two cranes. That bill of lading contains the same General Paramount clause as the booking note.
5. During the course of the voyage a fire broke out on the barge causing it damage and causing delay to the adventure. It is common ground that the most likely cause of the fire was that the internal bracing of one of the cranes was insufficient to withstand the ordinary incidents of the sea passage. Part of the crane collapsed, causing considerable damage to the barge. Further, the falling structure struck propane cylinders which were being carried on deck, fracturing the cylinders and igniting the gas within them.
6. In the action the Claimants claim from the Defendants demurrage and damages in respect of the damage to and detention of the barge.
7. The Defendants deny that they were party to the freight agreement or to any contract contained in or evidenced by the bill of lading. They say that at all material times they were merely acting as agents for and on behalf of Techint and/or Techint's freight forwarders Aprile Seafreight S.p.a. "Aprile". The Defendants further say that even if they were party to the freight agreement they retained no contractual nexus with the Claimants or that, if they did, they remained responsible only for the payment of deadfreight and/or demurrage.
8. The counterclaim in respect of which permission to serve has been given by Longmore J, subject to the time bar point, is a claim by the Defendants premised on the fact that they were party to a contract with the Claimants - either the contract contained in or evidenced by the bill of lading or the freight agreement. It is alleged that at Puerto Ordaz the barge was found to be unseaworthy and that this was in consequence of a breach of contract by the Claimants in that they had failed to exercise due diligence to make the barge seaworthy. It is said that repairs were required to be carried out to the internal structure of the barge and that whilst this was being done the Defendants suffered loss in that expensive lifting equipment and personnel were standing idle for a period of about seven days.
9. Precisely what is alleged to have been the sequence of events at Puerto Ordaz is unclear. Paragraph 17 of the counterclaim asserts that upon arrival of the barge it was found to be unseaworthy and that it had to undergo repairs before it could be accepted, the repairs taking place from Monday 14 June until Saturday 19 June. A request for further information enquired whether it is the Defendants' case that unseaworthiness prior to the commencement of the loading process is actionable under Article III Rule 1 of the Hague Rules. The response stated, accurately but unhelpfully, that this is a matter for legal argument but went on to say that in any event the loading process commenced on or about 7 June, which is in fact when the vessel arrived at Puerto Ordaz, and that it was suspended thereafter. I was invited for the purposes of the preliminary issue to assume that the loading operation commenced on or about 7 June and that it was suspended between 14 and about 21 June as a result of the unseaworthiness of the barge. I do not have to consider whether unseaworthiness rectified before loading begins is likely to give rise to a breach of Article III Rule 1.
10. It is accepted that if there existed a contractual relationship between the Claimants and the Defendants pursuant to which the Defendants can pursue this allegation of breach of contract that contract incorporated the Hague Rules. Indeed the breach alleged is of the obligation contained in Article III Rule 1 which provides that the carrier shall be bound, before and at the beginning of the voyage, to exercise due diligence to make the ship seaworthy. The first question which I have to decide is whether in such circumstances the claim is time barred under Article III Rule 6 of the Hague Rules. It is accepted that if the time bar is in principle applicable to the claim then the claim is, subject to any contractual extension, time barred. The cargo was eventually discharged on or about 20 July 1999 and the counterclaim was not served until 31 July 2000. The second question which I have to decide is whether there was a contractual extension to the time bar.

Article III Rule 6

11. Article III Rule 6 provides:-

Unless notice of loss or damage and the general nature of such loss or damage be given in writing, to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to the delivery thereof under the contract of carriage, or, if the loss or damage be not apparent, within three days, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading.

The notice in writing need not be given if the state of the goods has at the time of their receipt been the subject of joint survey or inspection.

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.

In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods.

12. Mr Jacobs for the Defendants submits that there is no or no sufficient connection between the claim sought to be put forward and "the goods" which were delivered on or about 20 July 1999 so as to bring Article III Rule 6 into play. He submits that this is a claim which would have arisen even if the cranes, the goods, had not subsequently been carried. The claim, he submits, has nothing to do with the goods carried. It is a claim arising from the delay caused by the Claimants' failure to provide a seaworthy vessel but it is not a claim which is in any way related to the goods themselves. Mr Jacobs founded himself squarely on observations both of Saville J in "The Standard Ardour" [1988] 2 Ll R 159 and of Colman J in "The Marinor" [1996] 1 Ll R 301. "The Standard Ardour" was concerned with the incorporation of the Hague Rules into a time charter, which brings with it wider and different problems than those which arise consequent upon their incorporation into a contract of affreightment such as that or those with which I am here concerned. Saville J was concerned particularly with a claim for loss allegedly caused by a delay in issuing or releasing bills of lading apparently attributable to the failure of the owners to provide a vessel properly equipped to measure the quantities of cargo loaded so that disputes and delays arose at the loading port over discrepancies between the ship and shore figures. It was contended that this claim was not one in respect of "loss or damage" because those words as used in Article III Rule 6 connote loss or damage of or to or in connection with goods - see per Pearson J in Goulandris Brothers Ltd v. B Goldman and Sons Ltd [1958] 1 QB 74 particularly at page 106. Saville J accepted this submission. He observed, at page 162:-

"She [Miss Dias] submitted that the loss or damage claimed by her clients did not arise out of or relate to loss or damage to the goods. It was not suggested that the goods themselves had been in any way lost or damaged or otherwise affected at all by any breach of the charter-party by the owners; nor was it even suggested that any delay in the carriage of the goods themselves had given rise to the claim. It related exclusively to the shipping documents and not to the goods themselves.

For the owners Mr Nolan submitted that the claim did relate to the goods since the bills of lading clearly did so. In my view, however, Miss Dias is correct on this point. The fact that bills of lading the subject matter of the claim can be said to relate to the goods does not mean to my mind that the claim relates, or at least sufficiently relates, to the goods. There is simply no loss or damage to or of or in connection with the goods, to use the phrase employed by Mr Justice Pearson in Goulandris v Goldman."

A little later Saville J went on to say:-

"... I find it impossible to see how it can be said that the parties must have intended that the time limit in question should apply to claims such as those asserted by the charterers in the present case. The words of s. 3(6) apply a time limit by reference to when "the goods" were or should have been delivered. It so happens in the present case that goods were loaded on the vessel and subsequently discharged. However, if, as I hold to be the case, the loss or damage claimed from the owners cannot be described as relating to those goods, it is difficult to see how those goods can be described as "the goods" for the purpose of s. 3(6). Why should those goods be "the goods" if the loss or damage is not connected with them? If, for example, the charterers had made a claim unconnected with any goods arising out of the ballast voyage or over an incident before any goods had been loaded at all, it could hardly be suggested that a time bar should, or indeed could, be applied, for there would be nothing upon which s. 3(6) could operate. That to my mind is also the position in the present case once it is established that the loss or damage claimed is not loss or damage to or of or connected with the goods that happen to be on board or about to be put on board.

It seems to me, therefore, that as a matter of construction, that is to say as a matter of trying to ascertain the intentions of the parties from the words they have chosen to use, they can only have intended the time limit to apply to claims for loss or damage relating to the goods carried or perhaps to be carried. Only in such cases can the time limit be applied, for only in those cases can "the goods" be identified."

13. In "The Marinor" Colman J, after citing from the judgment of Saville J, remarked that:-

"It is therefore the proximity of connection between the claim and a given cargo which is of paramount importance in determining whether the time bar applies to that cargo."

I think that the last word in this passage should almost certainly read "claim".

On that basis I respectfully agree with Colman J that this is the critical question.

After citation of further authority Colman J concluded:-

"If the effect of incorporation of the rules by general words is to enable the shipowner to rely on the protection of art. IV to the extent enunciated in Adamastos and The Satya Kailash, then there can, in my judgment, be no reason in principle why the protection provided to the shipowner by art. III, r.6 should not apply to an equally broad spectrum of claims, provided always that it is possible to identify a date when goods sufficiently relevant to the claim were delivered or should have been delivered. To restrict claims covered by the art. III, r.6 protection to those based on a factual foundation which would involve a breach by the owners of their obligations as carriers under the rules in the context of a bill of lading contract would be inconsistent with the reasoning in those two cases. Thus liability "in respect of goods" (the words of art. III, r.6) is not to be construed in the context of a periodic time charter as meaning a liability arising from facts which would found a claim by a cargo-owner under the Hague or Hague-Visby Rules in the context of a bill of lading contract but rather as meaning a liability based on facts involving a particular cargo or intended cargo and, in the absence of physical loss or damage, sufficiently closely involving that cargo for it to be said that the financial loss sustained was referable to what was done with that cargo or was directly associated with it.

Accordingly, the approach which in my judgment, is established by the authorities which I have considered is that where there is incorporation by general words into a time charter of legislation enacting the Hague Rules or Hague-Visby Rules, the shipowners will be entitled to rely on the protection of the time bar against claims for breach of any of the terms of the charter, even if not co-extensive with obligations under the rules, provided that (i) those claims assert (a) a liability involving physical loss of or damage to goods or (b) a liability for financial loss sustained in relation to goods and (ii) the goods in question were either shipped or were intended to be shipped pursuant to the charter. In order to operate the time bar provision in the case of goods intended to be shipped it is clearly necessary for a particular voyage or voyages to have been in the contemplation of both parties at the time when the breach preventing shipment on that voyage occurred. In the absence of such a qualification there would be great uncertainty in the commencement of the one year time period. For this reason a claim in respect of cargo intended to be shipped on a voyage which had not been the subject of charterers' instructions at the time when the facts giving rise to the loss occurred would normally be too uncertain to be subject to application of the time bar."

It will be appreciated from Colman J's reference to liability "in respect of goods" as being the words of Article III Rule 6 that he was in fact concerned with the application of the Hague Visby Rules. However as he makes clear in the second of the two paragraphs cited above he intended his remarks to be of application in relation to both codes and indeed in an earlier passage in his judgment he observed that there is no material distinction between the meaning or effect of the two time bar provisions. I do not have to consider that point.

14. Mr Matthews for the Claimants contended that the authorities lead to the conclusion that the Defendants' proposed counter claim is indeed a claim which falls within the ambit of the Article III Rule 6 time bar. He pointed out that, unlike cases both actual and hypothetical considered by Saville J and Colman J, there was in the present case no difficulty whatever in establishing what has succinctly if unfashionably been called the "terminus a quo" - it was indeed common ground that the one year ran, if it ran at all, from the delivery of the cargo which was intended to be and which was in fact shipped on the vessel. Mr Matthews founded particularly upon the decision of the Court of Appeal in Cargill International S.A. v CPN Tankers (Bermuda) Ltd. (The "Ot Sonja") [1993] 2 LlR 435 and contended that that decision was binding authority for the propositions (1) that the meaning of the words loss or damage in Article III Rule 6 was to be harmonised with the established meaning of those words in Article IV (2) that a wide rather than a narrow construction should be given to the ambit of Article III Rule 6 (3) that the words are apt to cover goods which are intended to be loaded even though they are never actually loaded and particularly (4) that the time bar can operate even in respect of an incident prior to loading. Thus Mr Matthews submitted that, on the authority of "The Ot Sonja", it would make no difference whether in this case the relevant delay preceded the start of loading or whether, as the Defendants seemed now to be asserting, it was a delay which occurred in the course of and which interrupted the loading operation, causing its suspension. On either view the claim asserted was, submitted Mr Matthews, a claim in respect of loss suffered by reason of the cost of loading the cranes being greater than it would otherwise have been. This should be regarded as a financial loss in relation to or in connection with the goods intended to be and in fact carried. It was he said part of the cost of loading the very goods the subject matter of the contract of affreightment. It was akin to additional storage or the purchase and shipment of substitute goods on another vessel in consequence of a delay in loading. Finally it would, submitted Mr Matthews, be an unsatisfactory construction of the time bar provision if it applied to damage to the crane if the unseaworthiness was not remedied but not to the additional expense of loading the crane if steps were taken to remedy the unseaworthiness. Of course, that observation might be a reflection of the debate whether remedied unseaworthiness gives rise to a breach of the Hague Rules.
15. In my judgment the decision in "The Ot Sonja" is not determinative of the present application. I entirely accept, indeed I am bound so to do, that the words in Article III Rule 6 are apt to cover goods which although intended to be loaded are in fact never loaded, from which it necessarily follows that the words must likewise be capable of application to a claim in respect of events occurring before loading begins. However the crucial point on which the case offers, as I read it, no guidance, is the question in what circumstances loss or damage should be regarded as related to goods which are otherwise capable of being identified, whether in the event loaded or not. That point was not addressed because it was common ground, or at any rate not in dispute, that the relevant loss or damage related to goods, the question for decision being whether the time bar could apply in circumstances where those goods were not in fact loaded on the vessel pursuant to the contract of affreightment. The precise nature of the claim in "The Ot Sonja" is in fact a little unclear. The case concerned a voyage charterparty for the carriage of a cargo of vegetable oils from ports in the Hamburg-Rotterdam range to China. The charterers alleged that in breach of the charter the vessel presented for loading at the first load port with tanks that were dirty and unsuitable for the carriage of the cargo, and that this necessitated the cleaning of the tanks, which in turn delayed the start of loading, and allegedly caused consequential financial loss and expense to the charterers. The charterers also claimed that, at the second load port, cargo was permitted to leak from tank 4C to tank 5C, and was thought to have been contaminated; they alleged that this also caused financial loss and expense, incurred in pumping the cargo back into the correct tank and in carrying out an analysis to discover where the contamination had in fact occurred. The total damages claimed amounted to about $143,000.00. Both alleged breaches occurred in the period March/April 1989. No suit was brought within the ensuing year, the appointment of an arbitrator having only taken place in February 1992. At page 437 Hirst LJ set out the two issues of principle which fell to be determined in this way:-

"The two issues of principle are:

(1) Do the words "loss or damage" refer only to physical loss of or damage to the goods, or do they extend to loss or damage related to goods?

(2) If the latter, does the time limit operate where the goods to which the loss or damage relates have never been loaded on the vessel?

The answer to the first question affects the entire claim since, if the plaintiffs are right, none of the claim is time barred, seeing that none of the loss or damage claimed was in relation to direct physical damage to the goods.

On the other hand the answer to the second question only affects a small part of the claim, which concerns cargo destined for loading on the vessel, but allegedly diverted to another vessel due to the delay in the start of loading."

I infer therefore that the loss and expense arising out of the delay caused by the necessity to clean the tanks before loading could start consisted, largely if not totally, of the cost of shipping the intended goods on an alternative vessel. At all events it was accepted, or at any rate not disputed, that the loss, whatever it was, related to or was sustained in respect of the relevant goods. The question for decision was whether the time bar operated in circumstances where those goods were not in fact carried pursuant to the contract of carriage. The first and main point in the case was, as set out above, whether the words "loss or damage" refer only to physical loss of or damage to goods, or whether they extend to loss and damage related to goods. Saville J at first instance resolved those two questions as follows:-

"In the present case that time limit would have expired some time in April or May 1990. The question here is whether the claims that I have described in general terms are claims for loss or damage within the meaning of section 3(6) of the Carriage of Goods by Sea Act. In my view on the authorities they are. They are claims that relate to the goods in the sense described by Mr Justice Pearson (as he then was) in Goulandris v Goldman [1958] 1 QB 74. It is the case in the present instance that two items of the first head of claim relate to loss and expense in respect of goods which in the event were sent on another vessel, but it seems to me that this does not matter since they were clearly (and, indeed, the claim depends on this) goods which were at the time of the alleged breach intended to be carried on this vessel."

The Court of Appeal agreed with Saville J. Hirst LJ addressed the second question at page 444 as follows:-

"Question 2

This question falls within a very narrow compass.

Mr Broadbent submits that the loss or damage must be related to goods actually loaded on the vessel, otherwise there is no terminus a quo from which the time limit can operate. He submits that the sub-section even on its wider construction contemplates that the time-limit will run from two alternative points, namely the time when the goods were delivered, which pre-supposes they have been shipped on the vessel, or the time when they ought to have been delivered, which again pre-supposes that they have been loaded, since under the charter-party the only delivery obligation is to deliver cargo which has been loaded.

I disagree with this approach. Part II cl. 1 of the charter-party provides under the heading "WARRANTY-VOYAGE-CARGO" that:

... the vessel shall with all convenient despatch proceed as ordered to the loading port... and... shall load... a full and complete cargo... and being so loaded shall forthwith proceed... direct to the discharging port... and deliver said cargo.

The obligation to load is thus the other side of the same coin as the obligation to deliver.

Where, as is alleged here, goods destined for the vessel were not loaded due to the delay, it seems to me that any resulting loss or damage is manifestly "in relation to goods", seeing that, adopting Mr Justice Devlin's test in the Adamastos case, it arises in relation to the loading, handling, stowage, carriage, custody, care and discharge of such goods. Moreover, there is no difficulty in determining the terminus a quo of the time limit, since it will begin to run from the date from which the goods ought to have been delivered, assuming the loading obligation had been fulfilled.

For these reasons in my judgment the answer to Question 2 is that at least in the circumstances of this case, the time limit does operate even though the goods to which the relevant lose or damage relates have never been loaded on the vessel. It follows that I would dismiss this appeal."

16. It is to my mind clear that, unsurprisingly, Hirst LJ was not attempting to state any principle as to the nature of the necessary relationship between loss and damage and goods. The question is simply one of fact in each case, the nature of the enquiry being that stated by Saville J in "The Standard Ardour" and by Colman J in "The Marinor", viz, whether the claim relates or at least sufficiently relates to identifiable goods, whether the goods are sufficiently relevant to the claim or, perhaps, whether the facts or the loss alleged sufficiently closely involve an identified cargo for it to be possible to say that the claim related to that cargo as being referable to what was done with the cargo or as being directly associated with it. These are all different ways of attempting to describe the same concept, but at bottom the question is a very short one - does the loss in respect of which the claim is brought relate to goods which were either shipped or intended to be shipped pursuant to the contract?
17. I do not find this question entirely easy to resolve but in the end I have concluded that the claim does have a sufficiently close association with the cargo intended to be and in fact carried as to render it subject to the Article III Rule 6 time bar. The critical feature of the claim which has, in the end, proved for me decisive is that it relates, as the Defendants put it, to "expensive lifting equipment and personnel" which was and were present, as I infer, specifically for the specialised task of loading the cranes onto the barge. Not all claims for loss caused by delay arising out of an inability to begin or to continue loading would necessarily share this close association with the goods carried or intended to be carried but where, as here, the claim is in respect of the idle time of equipment and personnel assembled to carry out a specific task in relation to specified goods identified in the contract of carriage or of affreightment the necessary close relationship between the claim and the goods is in my judgment made out.
18. It was debated in argument whether the question posed admits of a different answer according to whether the delay occurred before loading started or whether, as I am asked to assume, loading was suspended. On the facts of this case the answer is the same in either case, although I can envisage that there might be other situations in which the question whether loading had or had not started might be relevant to the question whether the particular claim could properly be said to relate to goods carried or intended to be carried.
19. I am glad to be able to reach the conclusion which I have because I agree with Mr Matthews that it would, certainly on the facts of the case, be odd if the owners enjoyed the protection of the time bar in the event of a claim that unremedied unseaworthiness had caused loss and damage but not in the event of a claim that the necessity to remedy the unseaworthiness had caused loss and damage, the more so where the loss is, in real terms, measured in the cost of loading. The Hague Rules represent a negotiated bargain between shipowners whose interest lies in maximum immunity and cargo owners whose interest lies in maximum redress. The plain intention of Article III Rule 6 is to achieve finality and to enable the ship owner to clear his books - see generally per Bingham LJ in "The Captain Gregos" [1990] 1L1 R 310. I have no doubt that, where it is possible so to do, and where there is no consequent uncertainty as to when the one year period would expire, the court should lean towards a conclusion which involves that a claim against a carrier which is founded upon a breach of the Hague Rules obligation is subject to the one year time bar contained in that code rather than that it is not.

Was there a Contractual Extension of the Time Limit?

20. The next question is whether the time limit was extended so as to permit the claim nevertheless to be brought. This question turns entirely upon a short exchange of correspondence between Messrs Clyde & Co for the Defendants and Messrs Jackson Parton for the Claimants.

On 23 May 2000 Messrs Clyde & Co wrote to Messrs Jackson Parton as follows:-

"It is nearly 11 months since the voyage in question took place and this means that our clients have to consider their position in relation to any 12 month time limit which might apply to a claim against your clients in relation to the damage to the cranes. We do not accept that our clients would be bound by such a 12 month time limit, but nevertheless we need to ensure that our clients' position is protected.

Techint have commenced proceedings in Italy against Aprile and our clients claiming damages in excess of US $8,500,000 in respect of the damage to the cranes. The Italian proceedings were issued and served shortly before you issued your clients' action in London. This puts our clients in some difficulty in that they are now having to defend two related actions brought by separate claimants in two jurisdictions, both of which are parties to the Brussels Convention. We are therefore reviewing the jurisdiction position.

One particular problem faced by our clients is whether to claim an indemnity from your clients for any sums they may have to pay Techint and/or Aprile. You will have appreciated from the correspondence between the parties since the incident and from the matters pleaded in our clients' Defence that our clients have not alleged that damage to the cranes was caused by fault on the part of your clients. Indeed, it remains our clients' position that the party at fault was Techint. For their part, Techint themselves do not allege any specific fault on the part of your clients or the vessel, but there remains a risk (albeit small) that evidence comes to light which suggests that your clients do in fact have liability for the damage to the cranes. In that event our clients would want to claim an indemnity from your client for any liability our clients had to Techint and/or Aprile.

Whether or not a 12 month time bar would apply in such circumstances, our clients clearly cannot take the risk of facing a time bar defence in the event that they find themselves having to pursue a claim or an indemnity against your clients. One answer would be for our clients to file a counterclaim now in action 2000 Folio No 246, but that would seem to be a waste of time and costs on both sides since there is no current need to claim such an indemnity and it is unlikely that the need to do so will ever arise.

We suggest that the better approach would be for your clients to grant our clients an extension of any applicable time bar up to and including 27^th June 2001, and, further, to agree that in the unlikely event that such a claim for an indemnity becomes necessary, our clients may introduce a counterclaim into action 2000 Folio No 246 or commence a separate High Court action against your clients, whichever would be the more appropriate at the time having regard to the state of action 2000 Folio No. 246.

We trust you will agree that this represents the most sensible way of dealing with this particular issue and we look forward to receiving confirmation of your clients' agreement to it shortly.

In the event that this proposal is agreed, we suggest that it should also be mentioned to the Court at the Case-Management Conference so that the Court is aware of the position when giving directions for the future conduct of the action."

On 8 June 2000 Messrs Clyde & Co sent a chaser referring to their fax of 23 May "requesting an extension of any applicable 12 month time limit."

On 9 June 2000 Messrs Jackson Parton responded "We are instructed not to give the time extension you have requested."

On the same day, 9 June, Messrs Clyde & Co pursued their request in these terms:-

"We note that your clients are not prepared to grant our clients a 12 month extension of time in respect of a possible claim against your clients. Since it is unlikely on the evidence currently available that our clients would ever have to pursue such a claim against your clients, we are surprised that your clients should in effect require our clients to take formal steps to protect their position, which will involve both parties in additional costs.

The options open to our clients would appear to be,

(i) to commence a Part 20 claim against your clients;

(ii) to commence a separate action against your clients;

(iii) to apply to the Italian court that your clients be joined as third parties to that action.

Before we discuss the position in detail with our clients and Counsel, we are willing to consider any comments or preferences your clients may have. However, since we are shortly approaching the first anniversary of the voyage, we must ask for those comments no later than 16^th June.

Alternatively, if you would prefer to review the position in the context of the forthcoming Case-Management Conference, one option would be for your clients to grant our clients an extension of any applicable time limit until, say 42 days after the date of the Case-Management Conference.

We look forward to hearing from you."

Messrs Jackson Parton responded on 16 June in these terms:-

"We refer to your fax of 9 June. Our clients are willing to grant a time extension to allow your clients to apply at the forthcoming Case Management Conference for leave to commence a part 20 claim, while reserving all rights regarding costs. Whilst any such application will be vigorously opposed, in the event that it is successful we shall expect the Part 20 claim form to be served within seven days; since your application will doubtless be accompanied by a draft of this, we do not consider that this should present any difficulties.

Please confirm your acceptance of this proposal by return. We should also be grateful for news regarding the further information requested.

Best regards."

After a telephone call on 19 June which evidently adds nothing to the correspondence Messrs Clyde & Co responded with what they considered to be the appropriate formula:-

"Thank you for your fax of 16^th June.

As discussed on the telephone this morning, we believe the appropriate formula for the suggested time extension should be that your clients grant our clients an extension of any applicable 12 month time limit, such extension to expire 7 days after the date on which the Court makes an order on the Case-Management Conference on your clients' action. This will enable our clients to take alternative action in the event that the Court refuses our clients leave to commence a Part 20 claim.

Please confirm by return that this is agreed."

On 21 June Messrs Jackson Parton replied as follows:-

"We refer to our telephone conversation and your fax, both of yesterday's date. Whilst we are willing to confirm that our extension of time for your application to seek leave to commence a Part 20 claim extends also to the commencement of separate indemnity proceedings (i.e. options (i) and (ii) of your fax of 9 June), in the event of such leave being denied by the Court it would be an absurd outcome for you then to circumvent that Judgment by commencing identical proceedings by an alternative route.

For this reason we must put you on notice that at the same time as the hearing of the application for Part 20 leave we shall seek indications from the Court as to the view it would take of the subsequent commencement of separate proceedings in the event of the failure of the Part 20 application. Assuming that the Court shares our view, if Part 20 leave is withheld and you then commence separate indemnity proceedings, we shall seek to have such proceedings struck out as an abuse of process, seeking indemnity costs and potentially a wasted costs order.

We consider that the most economical way to proceed would be for you now to select which of the routes you wish to follow, undertaking not to seek "two bites of the cherry" by commencing alternative proceedings on the same subject matter. This is obviously a decision for you to take, although we must make it clear that this correspondence will be put before the Court if necessary.

We look forward to hearing from you in this connection"

On 23 June 2000 Messrs Clyde & Co faxed Messrs Jackson Parton in these terms:-

"We thank you for your fax of 21^st June confirming that the extension of time granted by your clients covers not just the commencement of a Part 20 claim but also separate indemnity proceedings. You refer to options (i) and (ii) of our fax of 9^th June, but you do not refer to option (iii). Please would you clarify your clients' position on option (iii).

We note what you say about the possibility of our clients commencing separate legal proceedings if the application to commence a Part 20 claim is refused. That is a matter which can be considered by the court at the Case-Management Conference."

The correspondence ends with Messrs Jackson Parton's fax to Messrs Clyde & Co of the same day, 23 June 2000 which reads:-

"Thank you for your fax of this morning. As regards option (iii) (the joinder of our clients in the Italian proceedings as third parties), our current view is that the Italian Court would be obliged to decline jurisdiction in respect of any claim against our clients on the basis of Article 22 of the 1968 and Lugano Conventions. However, we are obviously not Italian lawyers; if you were to provide with an Italian legal opinion convincing us that option (iii) is a real possibility, we would be happy to take instructions regarding a time extension in that connection."

21. Mr Jacobs submitted that the Defendants were granted a general extension of time in wholly unrestricted terms in relation to any claim which they might wish to bring arising out of the contract of carriage for the cranes. Whether that is so depends upon an objective analysis of the correspondence. In short, I have to decide what was asked for and what was given. The starting point of the correspondence is that Messrs Clyde's clients had to consider their position in relation to any 12 month time limit which might apply to a claim against the Claimants in relation to the damage to the cranes. That time limit was thereafter referred to both in the first fax and in Messrs Clyde's faxes of 8 and 19 June as "any applicable time bar" or time limit because Clydes did not accept that their clients would be subject to any 12 month time limit, since of course the Defendants denied that they were party to any contract with the Claimants. "Any applicable time bar" or time limit would not have been interpreted by a reasonable recipient of Messrs Clyde's messages as conveying that Messrs Clyde were asking for an extension of time in respect of any claim by their clients to which a time limit might be applicable - rather they were seeking an extension of any time limit which might be applicable to their clients' claim for an indemnity in respect of any sums which they might have to pay Techint or Aprile arising out of damage to the cranes. By the same token the reference to "one particular problem" faced by our clients would not reasonably have been understood as an indication that the Defendants were considering other claims which might be brought against the Claimants, unrelated to the damage to the cranes. This one particular problem faced by Messrs Clyde's clients amongst other jurisdictional problems was whether even to claim an indemnity from the Claimants in respect of any sums they might be ordered to pay Techint or Aprile, bearing in mind the acknowledged lack of any foundation on the basis of which to bring such a claim. Other problems faced by the Defendants, apart from the prospect of defending related claims in two jurisdictions, included the question whether, if they were to pursue a claim for an indemnity against the Claimants, they should do so by way of counterclaim in this action, by way of separate action against the Claimants or whether they should seek the Claimants' joinder to the Italian proceedings so that they could pursue them in that forum. In their fax of 9 June Messrs Clyde referred unequivocally to Messrs Jackson Parton's refusal to grant an extension of time in respect of "a possible claim" which, on the evidence then available, Messrs Clyde thought it unlikely would ever have to be pursued. That referred, and could only refer, to the possible claim for an indemnity in respect of sums paid in respect of damage to the crane. It was in relation to that claim alone that Messrs Jackson Parton granted an extension of time on their clients' behalf.
22. For all these reasons subject to any submissions Counsel may wish to make as to the form of order I shall declare that the Part 20 claim for the service of which Longmore J gave the Defendants conditional permission on 13 September 2000 is time barred.