In The Aquasia  EWHC 2514 (Comm) the English High Court has determined the effect of Article IV r.5 of the Hague Rules which provides that the carrier’s liability for loss or damage to or in connection with goods shall not exceed £100 “per package or unit”. The shipowners argued that Article IV r.5 can be applied to bulk or liquid cargo by reading the word ‘unit’ as a reference to the unit used by the parties to denominate or quantify the cargo in the contract of carriage, relying on the description of the cargo in the charterparty as “2,000 tons cargo of fishoil in bulk”. The cargo claimants argued that the word ‘unit’ can only refer to a physical item of cargo, or to a combination of physical items bundled together for shipment.
Sir Jeremy Cooke, sitting as a judge of the High Court, found in favour of the cargo claimants’ contention, concluding that “[t]he word “unit” in Article IV Rule 5 of the Hague Rules is not apt to apply to bulk cargoes and that even if it could apply, the only legitimate application would be by way of interpreting the word “unit” as “freight unit”. This cannot be done in the present case in a way which gives rise to a lower limitation figure than the claim because of the lump sum nature of the freight.”