In the context of containerized cargoes, it is important to know what constitutes a ‘package’ for limitation purposes under the Hague-Visby rules. For instance, is it the number of pallets inside a container or the total number of boxes secured on the pallets? Depending on that, the carrier in The Malik Al Ashtar (2023) was looking at paying either 30k DKK or 235k DKK as compensation for damage to the cargo.
The shipment of 108 cartons was consolidated on 5 pallets and loaded in a container. The cargo was shipped from China to Denmark. Cartons were affected by rainwater rendering the entire cargo of electrical parts unfit for their intended use by the consignee. The cargo owner was claiming DKK 235k, whereas the carrier said that its liability was limited to about 30,000 DKK. It all came down to what constitutes a ‘package’ under the Danish merchant shipping act (which reflects Hague-Visby Rules). On the face of B/L, ‘5 pallets’ were mentioned in the box titled ‘no. and kind of packages’, whereas just to its right in the box titled ‘description of goods’ it was mentioned ‘5 pallets = 108 cartons’. The packing list also mentioned ‘108 cartons on 5 pallets’.
Taking into account the booking instructions from the shipper to the carrier, information in the packing list, and the contents of the bill of lading, the Court was of the view that there were ‘108 packages’ packed in the container. Carriers’ liability could be limited to an amount equal to SDR 666.67 x 108 ctns. That was way above what the cargo owner was claiming (DKK 235K) and hence was able to get compensation for its entire loss from the ocean carrier.
This decision can’t be taken as an indication that other jurisdictions would have reached the same conclusion.
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