"Starsin", Owners of cargo & Ors v. "Starsin", Owners and/or demise charterers of

Factual and Procedural Background

The dispute arose after timber and plywood shipped from three Malaysian ports to Europe aboard “the Starsin” were discovered to be seriously damaged on arrival (January 1996). The deterioration was caused by negligent pre-voyage stowage and, in some parcels, by loading goods already wet with rain. Seventeen bills of lading covered the cargo. During the voyage the vessel was on time-charter by the Shipowner to Company A (“CPS”), which operated a liner service but later became insolvent.

The cargo interests (“the Cargo Owners”) sued the Shipowner in contract and, alternatively, in tort. At first instance Judge [Last Name] held the bills of lading were charterers’ bills; contractual claims therefore failed but most tort claims succeeded. The Court of Appeal divided: two Lords Justices found the Shipowner liable in contract; one Lord Justice agreed with the trial judge that the contractual carrier was CPS. Both courts rejected the Shipowner’s reliance on the Himalaya clause. The Shipowner appealed to the House of Lords; the Cargo Owners cross-appealed on tort questions.

Legal Issues Presented

1. Whether the bills of lading evidenced contracts of carriage with the Shipowner (owner/demise charterer) or with Company A as time-charterer.
2. If Company A was the contractual carrier, whether the Himalaya clause in the bills protected the Shipowner from liability to the Cargo Owners.
3. Whether any Cargo Owners could succeed against the Shipowner in tort, given the rule that only those with title or possessory interest at the time of damage may recover.

Arguments of the Parties

Shipowner’s Arguments

• The signature box on each bill stated the signatory acted “As Agent for Continental Pacific Shipping (The Carrier)”; under clause 1(c) “Carrier” meant the party on whose behalf the bill was signed, therefore CPS.
• If the Shipowner was not a contractual carrier, it was nonetheless protected by the Himalaya clause, which conferred complete immunity, and that protection was not vitiated by the Hague Rules.
• The Shipowner was an “independent contractor” within the clause and entitled to any defences available to CPS.

Cargo Owners’ Arguments

• Multiple provisions (e.g., clauses 33 and 35 and the printed testimonium for signature by the Master) pointed to an owners’ bill; the Shipowner was therefore the contractual carrier.
• Even if CPS was the carrier, the Himalaya clause could not override Article III rule 8 of the Hague Rules, which invalidates clauses relieving “the carrier or the ship” of liability for negligent damage.
• In tort, progressive damage during the voyage created fresh causes of action when title passed to successive holders, allowing recovery even if contractual claims failed.

Table of Precedents Cited

Court's Reasoning and Analysis

1. Identity of Carrier. The House considered the document as a whole but gave “pre-ponderant importance” to the typed signature stating the bills were signed “as Agent for CPS (The Carrier)”. Businessmen would expect the carrier’s identity on the face of the bill, without scrutinising microscopic terms on the reverse. Clauses 33 and 35, though pointing towards an owners’ bill, were displaced; the bills were therefore charterers’ bills.

2. Effect of the Himalaya Clause. Clause 5, after supplying omitted words, created a collateral contract extending the carrier’s defences to servants, agents and independent contractors. However, the majority held that, once the Shipowner was treated as an “independent contractor”, Article III rule 8 of the Hague Rules nullified any wider exemption than that available to CPS. Accordingly the clause did not give the Shipowner complete immunity. (Lord Steyn and Lord Millett dissented, viewing the clause as fully effective.)

3. Tort Claims. Applying Aliakmon, a claimant in negligence must own or possess the goods when damage occurs. Damage was significant when negligent stowage occurred on 8 December 1995; only one claimant (“Makros Hout”) held title by that date. Progressive deterioration did not create new causes of action for later owners. Therefore tort claims of other Cargo Owners failed.

Holding and Implications

Holding: The House (by majority) ruled that the bills of lading were charterers’ bills; the Shipowner was not liable in contract. The Himalaya clause did not give the Shipowner complete immunity. All tort claims except that of one Cargo Owner (Makros Hout) failed for lack of title at the time of damage. The Shipowner’s appeal was allowed save in respect of Makros Hout; the Cargo Owners’ cross-appeal was dismissed.

Implications: The decision clarifies that typed or stamped words identifying “the Carrier” on the face of a bill override boiler-plate on the reverse, reflecting commercial expectations and banking practice. It also limits the reach of Himalaya clauses where the Hague Rules apply, and confirms strict ownership requirements for tort recovery in cargo damage cases. No new statutory precedent was set, but the ruling provides authoritative guidance for drafting and interpreting bills of lading in liner trades.