Bulk Cargo Limitation of Liability: The Aftermath of ‘The Aqasia’

Irwin Ooi Ui Joo

Faculty of Law,Universiti Teknologi MARA (UiTM), Malaysia

Keywords: Bills of Lading, Hague Rules, Limitation of Liability, Package Limitation, Bulk Cargo.

Abstract: This paper provides a critique of the law on limitation of liability for the carriage of goods by sea of bulk

cargo. The 'unit' for determining the limit of liability for bulk cargo has been the subject of controversy under

cargo regimes such as the Hague Rules. Famous texts such as Scrutton on Charterparties and Bills of Lading

have adopted a legal position. This was followed by the obiter views of Evans J in The Aramis more than

three decades ago. The matter arose once again before the High Court (QBD, Commercial Division) in The

AQAsia in 2016. The appeal was considered by the Court of Appeal in 2018 and published recently. The

outcome has not been helpful to the shipping industry as the Court of Appeal confirmed the decision of Sir

Jeremy Cooke by concluding that the 'unit' in the cargo regime, did not apply to bulk cargo. This paper

examines the basis of the Court of Appeal's decision and attempts to make useful suggestions that can be

implemented in contracts of carriage in the aftermath of the appellate decision.

1 INTRODUCTION

There are two competing interests in the business of

shipping goods around the world. The shipper (i.e. the

consignor, who may be the cargo owner, or its agent)

wants regular and reliable shipping services to

transport goods from one port to another. By contrast,

in order to provide this level of service, a sea carrier

(i.e. a ship-owner, or a charterer of the vessel) will

have to incur heavy capital expenditure. Hence

shipping law balances these two interests by allowing

the shipper to have a right of suit against the carrier

for loss or damage to goods, thus providing a

mechanism for recovering compensation. However,

in order not to simply punish the carrier, for what is

essentially a risky service, which is at the constant

mercy of perils of the sea, the law provides some

protection even when liability could be established

against the sea carrier. This protection is known as

limitation of liability.

For goods shipped from Malaysia, the legal

mechanism which balances the competing interests of

shippers and sea carriers is the Carriage of Goods by

Sea Act 1950. The 1950 Act applies The Hague Rules

into the municipal legal system of Malaysia. For

containerised cargo the limit of liability has been set

at £100 Gold Value (see The Rosa S[1988] 2 Lloyds

Rep 574) for each package or unit (see The River

Gurara[1997] WLR 1128). There is some degree of

clarity as to what this means. The Rosa S has held that

£100 Gold Value is the gold content of a Sterling

coin. At today’s value, 732.238 grammes of 916 gold

under the Coinage Act 1971 (replacing the Coinage

Act 1870), is estimated to be RM107,455.93 (Note:

RM146.75 as at 24 July 2018) . Further, The River

Gurara has established that the package or unit for

limitation of liability is the package or unit as agreed

by the parties to the contract of carriage evidenced by

the bill of lading.

This relative certainty with respect to

containerised cargo, for many years, was thought to

also extend to bulk cargo. In The Aramis [1987] 2

Lloyd’s Rep.58 at p 67, Mr Justice Evans

acknowledged that the ‘freight unit’ in the contract of

carriage, or ‘customary freight unit’, could fall within

the definition of the ‘unit’ referred to in The Hague

Rules, although on the facts of that case, there was no

evidence that this was adopted by the bill of lading.

In The Aramis, the ‘freight unit’ in the bill of lading

was ‘kilogrammes’ (i.e. in weight). There was no

evidence that the ‘customary freight unit’ was ‘metric

tonnes’ as was more commonly used in bulk shipping.

For bulk cargo, there could not be a ‘package’ as bulk

goods were stored in bulk (i.e. therefore

unascertained) in the cargo hold, as this was the more

cost effective way to ship such unpackaged goods.

However, the calm waters of legal certainty came to

an end with The AQAsia; Sea Tank Shipping AS

Joo, I.

Bulk Cargo Limitation of Liability: The Aftermath of ‘The Aqasia’.

DOI: 10.5220/0010052103790384

In Proceedings of the International Law Conference (iN-LAC 2018) - Law, Technology and the Imperative of Change in the 21st Century, pages 379-384

ISBN: 978-989-758-482-4

379

(formerly known as Tank Invest AS) v Vinnlustodin

HF and Vatryggingafelag Islands FH [2016]

EWHC2514; [2018] EWCA Civ 276. After the shock

inducing decision of Sir Jeremy Cooke, sitting as a

judge in the High Court, the Court of Appeal has

confirmed that uncertainty.

2 A CRITIQUE OF THE COURT

OF APPEAL’S JUDGMENT IN

THE AQASIA

The three appellate judges (with the leading judgment

delivered by Lord Justice Flaux) decided that the

‘unit’ in The Hague Rules referred to ‘pieces’ of

cargo. It could not therefore apply to bulk cargo,

which was usually measured either in ‘weight’ or

‘volume’. Hence, the Hague Rules could only cover

bulk cargo if the limitation was described as ‘freight

unit’, not solely as ‘unit’. The ‘unit’ is therefore a

reference to a physical object, not a unit of

measurement (see para 23-36).

It is submitted that this is a very restrictive way to

interpret the Hague Rules. Lord Justice Flaux (see

para 28) took the view that the definition of ‘goods’,

although defined widely, was not helpful. It could not

help to provide for a wide definition of the word

‘unit’. His Lordship pointed to Article IV, Rule 2(n)

that could only apply to physical items of goods when

the ‘insufficient packaging’ exclusion was invoked. It

is further submitted that this approach ignores a very

important principle in the interpretation of the Hague

Rules that ‘International Law’ has to be given its

natural and ordinary meaning. This requirement is

laid down by the Vienna Convention on the Law of

Treaties (VCLT), in particular, Article 31(1). The

practice of not adopting a narrow interpretation for

international conventions such as the Hague Rules is

not something new or unusual in shipping law. As

long ago Stagline v Foscolo Mango 1932] AC 328 at

p 350, Lord Macmillan reminded judges interpreting

international conventions that a narrow approach

should be abhorred in order to achieve uniformity in

the construction of the Rules, which had to be applied

worldwide across multiple jurisdictions. This advice

was acknowledged by Lord Justice Flaux (see para

36) but then summarily dismissed, as the term ‘unit’

in the Hague Rules had not been interpreted in any

other jurisdictions, thus there was no evidence of any

difficulty faced in interpreting that word in other parts

of the world.

Lord Justice Flaux should have not been so

dismissive of giving the word ‘unit’ its wider natural

and ordinary meaning, so as to also include the

concept of a ‘freight unit’ measurement. This

approach to construction of international conventions

is nothing new, and would not be inconsistent with

English Law. For example, even in the context of a

charterparty, Lord Justice Hirst in The Trade Nomad;

Poseidon Schiffahrt GmbH v Nomadic Navigation

Co. Ltd. [1999] 1 Lloyd’s Rep.723 (CA), approving

the judgment of Colman J at first instance, said that a

charterparty must be construed to cover events that

are within the “natural and ordinary meaning” of the

words used in the charter. Unless there is a need for a

technical meaning, for example as in some areas of

marine insurance (such as the definition of ‘theft’), a

judge should adopt the language of the reasonable

businessman as this is probably what was indeed

intended when the contract of carriage was

negotiated.

Lord Justice Flaux (see para 34-54) also examined

the travauxpreparatoires of the Hague Rules and

concluded that initial intentions to extend the word

‘unit’ to also include ‘weight’ and ‘volume’ were not

followed though in the Final Draft. It is submitted that

this ignores one very important rule of interpretation.

The travauxpreparatoires is merely a secondary

means to interpretation. The VCLT make it clear that

if a word in an international convention is clear, it

should be given its ‘ordinary meaning’. Hence the

primary means of interpretation in Article 31 should

be applied first. Therefore, the travauxpreparatoires

should not be resorted to in this case when the word

‘unit’, was sufficiently wide to refer to both a

‘physical unit’ and a ‘unit of measurement’, such as a

‘freight unit’. This is clearly stipulated in Article 32,

which classified the travauxpreparatoires as a

secondary means of interpretation. Whenever Article

31 is applicable, such as in this case in The AQAsia,

the alleged ambiguity could be solved simply with the

application of ‘ordinary meaning’ of the word ‘unit’.

Thus, there is no need to resort to Article 32.

Another problem with the approach of Lord

Justice Flaux, was identified by his Lordship himself

in his leading judgment in The AQAsia (see para 59).

The Hague-Visby Rules, were widely believed to be

a clarification of the existing rules, which were first

drafted around 45 years earlier in the Hague Rules.

This later amended form of the Hague Rules contains

a specific reference to a freight unit. Article IV, Rule

5(a) of The Hague-Visby Rules provides for 2 units

of account per kilogramme for goods lost or damaged.

It was not clear why this particular ground was not

pursed in great depth in the appeal, but Lord Justice

Flaux grudgingly acknowledged (see para 59) that

this issues ‘remains live’. This provides good ground

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that the drafters of the Visby amendments believed

that the earlier version of the Hague Rules could be

interpreted widely and thus the word ‘unit’ could also

encompass a ‘freight unit’.

Although this author is not completely happy with

the approach adopted by Lord Justice Flaux in The

AQAsia, it is at the very least, consistent with

previous English cases. These cases, when

interpreting the word ‘package’, also proceeded on

the assumption that the word ‘unit’ within that same

phrase, only applied to physical objects. There a

number of cases proceeding on this assumption, for

example, Studebaker Distributers Ltd v Charlton

Steam Shipping Co Ltd [1938] 1 KB 459, and also the

unreported cases of The Jamie; Bekol BV v Terracina

Shipping Corporation et al. (unreported, 13 July

1988) and The Troll Maple (unreported, 1990, quoted

in The Jaime at para 42). This long line of authority

was further strengthened by Mr Justice Andrew Baker

in The Maersk Tangier; Kyokuyo Co Ltd v AP

Moeller-Maersk A/S [2017] EWHC 654 (Comm), at

para 83 who said that ‘under English Law, when

considering ‘units’ under The Hague Rules, the

search is for identifiably separate items of cargo, as in

fact shipped’. This therefore, leaves no ‘wriggle

room’ for the argument that ‘unit’ could be

sufficiently wide to encompass ‘freight unit’, a unit of

measurement, rather than physical cargo.

Before the Court of Appeal’s decision in The

AQAsia, there was only one academic reference,

where the authors were sufficiently brave to stick

their heads above the parapets and champion the view

that the word ‘unit’ was sufficiently wide to even

encompass the concept of a ‘freight unit’. That book

was Scrutton on Charterparties and Bills of Lading

(Scrutton). Using its 18

Edition, Mr Justice Evans in

the earlier mentioned case of The Aramis, proposed

that ‘unit’ in The Hague Rules, could be read to

encompass a ‘freight unit’ of measurement where

bulk cargo is involved. Scrutton is a much celebrated

reference work, which not too long ago, reached the

125 years publication milestone. This long-lived

academic work was commemorated with a special

edition, i.e. the 22nd Edition. Scrutton is currently in

its 23rd Edition (2017, with 1st Supplement).

However, Scrutton’scause celebre, with respect to

the freight unit interpretation, came to an abrupt end

in The AQAsia. Lord Justice Flaux politely described

the view espoused by Scrutton as a ‘minority’ view.

His Lordship also pointed out that if Mr Justice Evans

(in The Aramis) wanted to say that the analysis in

Scrutton was correct, he would have expressly said

so, but he did not (see para 62). Lord Justice Flaux

also emphasised that other writers such as

Temperley& Vaughan: The Carriage of Goods by Sea

Act 1924, 4th Edition, 1932, at pp 81-82 state that ‘the

word unit connotes one of a number of things rather

than a thing standing by itself … … … it does not

seem appropriate to describe the whole of a cargo or

parcel of cargo in bulk’. Hence after the Court of

Appeal’s pronouncement in The AQAsia, it is a case

of ‘Rest in Peace Scrutton’.

3 WHAT IS THE LEGAL

POSITION FOR THE SHIPPING

INDUSTRY IN THE

AFTERMATH OF THE

‘AQASIA’?

3.1 Bulk Cargo Transported under

Charterparties Incorporating the

Hague Rules and Specifically

Drafted Limitation of Liability

Clauses

Even where contracting parties to a contract of

carriage opt for a charterparty (as opposed to a bill of

lading) as their contractual document of choice for the

carriage of goods by sea, that charterparty could

provide for the incorporation of a bill of lading regime

such as the Hague Rules. Although charterparties are

generally left unregulated by the law (i.e. due to the

laiseez faire attitude to charterparties as opposed to

bills of lading) some shipowners and charterers

actively choose to incorporate a bill of lading regime

contractually (as opposed to incorporation by force of

law) into the charterparty. An example of this can be

seen in Seabridge Shipping AB v AC Orssleff’sEftf’s

A/S [1999] 2 Lloyd’s Rep.685. There are also

examples of charterparties incorporating the Hague-

Visby Rules, as illustrated in The Marinor [1996] 1

Lloyd’s Rep.301. Some parties even choose to

incorporate the statutory version of the Hague Rules

as enacted in the United States. This is demonstrated

in The O.T. Sonja [1993] 2 Lloyd’s Rep.435 where

the charterparty incorporated the US Carriage of

Goods by Sea Act 1936.

In the light of the Court of Appeal’s decision in

The AQAsia, this practice of incorporating a bill of

lading regime into a charterparty for the

transportation of bulk cargo by sea has to be

performed with added caution. As the limitation of

liability provisions in the Hague Rules no longer

apply to bulk cargo, a specifically drafted limitation

of liability clause that deals with loss or damage to

Bulk Cargo Limitation of Liability: The Aftermath of ‘The Aqasia’

381

bulk cargo loaded under the charterparty has to be

drafted. This clause must clearly spell out the freight

unit for weight (e.g. ‘metric tonnes’ or ‘kilograms’)

or volume (e.g. ‘cubic metre’, commonly described

by the acronym ‘CBM’) depending on the type of

bulk cargo carried, for the purposes of limitation of

liability. Only with the addition of a purposefully

drafted clause, it is submitted that any loss or damage

to bulk cargo carried under a charterparty, could be

subjected to limitation of liability.

Post-AQAsia, anyone negotiating a charterparty,

cannot have the luxury of forgetting to include this

specifically drafted limitation of liability clause for

loss or damage to bulk cargo, in the final draft of the

charterparty. As charterparties are now regarded as

fairly complex legal documents, a court is unlikely to

interfere with the contractual arrangements by

implying such a clause into the charterparty. Ever

since the Court of Appeal’s decision in The Reborn;

Mediterranean Salvage & Towage Ltd v Seamar

Trading & Commerce [2009] EWCA Civ 531 about

a decade ago, a court would rarely imply a term into

a contract, on the basis that it was necessary for

business efficacy between the contracting parties. The

Court of Appeal in The Reborn refused to correct an

oversight that resulted in a safe ports clause being left

out of a charterparty.

After The Reborn, a shadow was effectively cast

over the long established case of The Moorcock

(1889) 14 PD 64. For a long time before The Reborn,

it was thought that a court would, as a matter of

course, imply a term to give business efficacy to a

business arrangement. For example, in The

Moorcock, the implied term was that the jetty was

safe to use. However, in the light of The Reborn, a

contracting party that fails to include a specifically

drafted limitation of liability clause for loss or

damage to bulk cargo in the charterparty will not

enjoy the protection of limitation of liability, as it is

highly unlikely that such a clause would be implied

into the charterparty. In modern shipping law, there

appears to be a general reluctance by the courts to

interfere with contracts negotiated by signatory

parties who are assumed to have equal bargaining

power, such as a shipowner and charterer. For

example, in The Clipper Sao Luis [2000] 1 Lloyd’s

Rep.645, Mr Justice David Steel went to the extent of

refusing to imply a term that stevedores appointed by

the chartererers would take reasonable care not to

endanger the ship or cargo, as that would be

inconsistent with the express term imposing liability

on the shipowner for bad stowage.

3.2 Bills of Lading Issued under

Charterparties and/or

Charterparty Bills of Lading for

Bulk Cargo and the Importance of

a Properly Drafted Incorporation

Clause

Where the charterer operates the vessel in order to

earn freight, after contracting with the shipowner, the

charterer will receive cargo from a person who is a

third party to the charterparty. When a bill of lading

is issued for this third party, it will usually have an

incorporation clause that purports to import all

charterparty clauses into the bill of lading. Similarly,

charterparty bill of lading, which in a short form bill

of lading (i.e. without the famous fine print on the

reverse), purports to import all charterparty clauses

into the bill of lading. As the bill of lading regime no

longer has an effective limitation of liability provision

for bulk cargo after the Court of Appeal’s decision in

The AQAsia, care must be taken to ensure that any

specifically drafted limitation of liability clause for

bulk cargo in the charterparty, is properly described

by any incorporation clause contained in bill of

lading. Otherwise, a lack of proper drafting of the

incorporation clause, may result in the failure of that

incorporation clause, to successfully import that

specifically drafted charterparty bulk cargo limitation

of liability clause into the contract of carriage

evidenced by the bill of lading.

For example, there are a number of cases, which

demonstrate that when incorporation clauses are not

properly drafted, an arbitration clause cannot be

exported from the charterparty into the contract of

carriage evidenced by the bill of lading. What is clear

from The Varenna [1983] 3 All E.R.645, T.W.

Thomas v Portsea SS. Co. Ltd. [1912] A.C.1, The

Federal Bulker [1989] 1 Lloyd’s Rep.103 and The

Heidberg [1994] 2 Lloyd’s Rep.287, is that an

‘arbitration clause’ is not a term, condition or

exception of the charterparty. English Law requires

very specific drafting such as that found in The Merak

[1965] 1 All E.R.230 for the incorporation clause to

be successful. In The Merak, the incorporation clause

provided for “all the terms, conditions, clauses and

exceptions … “ of the charterparty to be incorporated

into the bill of lading. This incorporation clause

worked because the word ‘clauses’ in the

incorporation clause was sufficiently wide to describe

an arbitration clause, and could thus function to

successfully import a charterparty arbitration clause

into the bill of lading.

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Hence, where the bill of lading contains a choice

of law clause for ‘English Law’, it is submitted that a

‘Merak type’ incorporation clause will be necessary

for the incorporation of a specifically drafted

limitation of liability clause for bulk cargo from the

charterparty into the bill of lading. The bulk cargo

limitation of liability clause is neither a ‘condition’ of

the contract, nor is it an ‘exception’. Therefore, just

like a provision for arbitration, the limitation of

liability for bulk cargo will be a ‘clause’ as in The

Merak, for the purposes of importation into the bill of

lading. It appears that only English Law requires such

degree of precision in the drafting of the

incorporation clause. In this context, it would be

advisable to even have the word ‘limitation’ in the

incorporation clause, just to err on the side of safety.

It is therefore arguably necessary to get professional

legal advise before deciding on a formula for one’s

incorporation clause in a bill of lading issued under a

charterparty, or one used in a charterparty bill of

lading because of the degree of accuracy and clarity

which English Law requires for its incorporation

clause. The consequences of the incorporation clause

not functioning as intended, could be dire as the

‘carrier’ under the bill of lading would be left

unprotected by any exclusion clause for loss or

damage to goods where the transportation involved

bulk cargo. The carrier would therefore be potentially

liable for the full amount of any such loss or damage

to bulk cargo. Although in practice, this would

probably be covered by ‘Protection and Indemnity’

insurance, this may affect the ‘calls’ of the club for

the current financial year.

By contrast, where the bill of lading is subject to

Malaysian Law, the position is rather different. At

one time, it was thought that the same degree of

precision required under English Law for an

incorporation clause to function in a bill of lading.

However, this assumption went out of the window in

Ajwa for Food Industries Co (MIGOP), Egypt v

Pacific Inter-Link SdnBhd [2013] 5 MLJ 625. The

Federal court held that a ‘Palm Oil Refiners

Association of Malaysia’ (PORAM) arbitration

clause could be incorporated into a contract for sale

of palm oil using a ‘general’ incorporation clause.

The Federal Court (see para 15-28) pointed out that

the Section 9(5) of the Arbitration Act 2005 (which

enacts Article 7(2) of the UNCITRAL Model Law on

International Commercial Arbitration 1985 in its

original form) merely stipulates that the arbitration

‘agreement is in writing and the reference is such as

to make that clause part of the agreement’. Hence

’[o]n the issue of whether there is an incorporation of

the STC and arbitration clause into the sales contracts

we noted the sales contracts prominently incorporate

the STC with the caption 'ALL OTHER TERMS,

CONDITIONS AND RULES NOT IN

CONTRADICTION WITH THE ABOVE AS PER

PIL'S TERMS AND CONDITIONS'. In our view as

there is a specific mention in the sales contracts that

all terms and conditions of the respondent's STC will

be applicable, the intention of the parties is clear that

arbitration clause would also be applicable’.

Therefore, the Malaysian approach is that the word

‘terms’ and ‘conditions’ are sufficiently specific for

the incorporation of an arbitration clause.

There are several points to note about the

approach of the Federal Court in Ajwa. First, there is

no requirement for the use of a very specific formula

as is necessitated by English Law. If the Federal

Court is correct, the arbitration clause is not a

‘condition’, and therefore their Lordships must have

thought that an arbitration clause is caught by the

word ‘term’ in the incorporation clause. Hence, the

threshold for incorporation is very low as all

provisions in the contract are ‘terms’ anyway. It is

submitted that this is a word, which does not make a

distinction between the various types of terms that are

encompassed within a contract. Second, the Ajwa

case does not deal with a bill of lading. Instead, the

incorporation clause is in a contract for the sale of

palm oil. If Ajwa is correctly decided, there is no

reason why its principle cannot be extended to bills of

lading, which have a choice of law clause for

Malaysian Law, or which are caught by Section 2 of

the Carriage of Goods by Sea Act 1950 where the

shipment is made from a port in Malaysia. Third,

Ajwa might be the catalyst for more industry

stakeholders using Malaysian Law, and therefore also

hopefully choosing Malaysia as a jurisdiction for

dispute resolution.

3.3 The Effect of Supersession Clauses

in Charterparty Bills of Lading

Generally, where a ship is chartered and a bill of

lading issued under that charterparty to the charterer,

the question arises as to which document (i.e. either

charterparty, or the bill of lading), governs the

relationship between the shipowner and charterer. In

Rodocanachi v Milburn Brothers (1887) 18

Q.B.D.67, the Court of Appeal held that the

charterparty remains the governing document, whilst

the bill of lading is merely a receipt and document of

title for the goods. The exclusion clause in

Rodocanachi, which was found in the bill of lading

(but not in the charterparty), could not protect the

shipowner. Hence, in this relationship, where a clause

Bulk Cargo Limitation of Liability: The Aftermath of ‘The Aqasia’

383

for limitation of liability is drafted to provide

protection for the carriage of bulk cargo by sea, that

clause would have to be specifically placed in the

charterparty. There would be no need for an

incorporation clause, as the bill of lading would not

be relevant for the purpose of governing the

relationship between the shipowner and charterer.

Exceptionally, the charterparty may contain a

supersession clause. This clause provides that when a

bill of lading is issued under the charterparty, that

charterparty will be superseded by the bill of lading.

The principle of supersession clauses were

recognised in The Jocelyne [1977] 2 Lloyd’s Rep.121

and if effective, the bill of lading will perform all of

its three traditional functions, i.e. Firstly, a receipt for

goods loaded on board the ship; Second, a document

of title for the goods; and Third, evidence of the

contract of carriage contained in the bill of lading. For

the supersession clause to work effectively, the bill of

lading must be in the form prescribed by the

shipowner in the charterparty. On the facts of The

Jocelyn, the bill of lading issued could not supersede

the charterparty because it was issued with an

arbitration clause as required by the agreement

contained in the charterparty.

In the light of The AQAsia, charterparties that

contain a supersession clause will have to specify that

any bill of lading issued to replace that charterparty,

must contain an expressly drafted clause for

limitation of liability when bulk goods are carried by

sea. Therefore, following The Jocelyn, only a bill of

lading with such a specifically drafted clause for

limitation of liability for bulk cargo would be in

compliance with the specification laid down in the

charterparty. Thus a bill of lading issued without such

a clause would not be a document that is in

compliance with charterparty instructions and thus,

cannot successfully replace the charterparty as the

contractual document, pursuant to a supersession

clause.

4 CONCLUSIONS

Several observations can therefore be made after the

decision of the Court of Appeal in The AQAsia, which

flow from the fact that a carrier can no longer rely on

the limitation of liability provisions in the Hague

Rules for the carriage of bulk cargo by sea. First,

specifically drafted limitation of liability clauses must

be drafted for charterparties used for the

transportation of bulk goods by sea, as incorporation

of a bill of lading regime such as The Hague Rules,

will not suffice. Second, where short form bills of

lading are used, a proper incorporation clause is

needed to ensure that both the Hague Rules and the

specifically drafted limitation of liability clause are

successfully imported into the bill of lading. This

appears to be the position under English Law, but not

so for Malaysian Law, which allows a more general

incorporation clause to be used. Third, usage of a

supersession clause in the charterparty will have to be

accompanied by an additional clause, which

stipulates that only a bill of lading with a specifically

drafted limitation of liability clause for bulk cargo

will be in compliance with charterparty requirements

and thus supersede the charterparty. In the light of the

three obvious consequences that flow from the

decision of the Court of Appeal in The AQAsia,

drafters of both charterparties and bills of lading will

have to pay more attention to the accuracy and

precision needed for drafting of not only limitation of

liability clauses, but also incorporation clauses,

supersession clauses and choice of law clauses. It is

therefore necessary to build into the checklist with

respect to documentation for both charterparties and

bills of lading, as the courts will not step in to imply

such clauses. Therefore, the mantra for this area of the

law, remains very much, ‘help yourself’.

ACKNOWLEDGEMENTS

The support of the following organisations made

writing this paper possible:

1. Faculty of Law, UniversitiTeknologi MARA

(UiTM), Shah Alam, Malaysia

2. Malaysia Institute of Transport (MITRANS),

UiTM

3. Centre for Maritime Law (CML), National

University of Singapore (NUS)

REFERENCES

Scrutton on Charterparties and Bills of Lading, 23

Edition, 2017, with 1

Supplement

Temperley& Vaughan: The Carriage of Goods by Sea Act

1924, 4th Edition, 1932

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