Lloyd's Maritime and Commercial Law Quarterly
WHO IS TO PAY FOR THE STEVEDORE’S NEGLIGENCE?
L. J. Kovats, Barrister
Master Mariner
The shipowner has done it again; as a carrier by sea, he was allowed by the Courts to contract out of liability for damage to goods. By pronouncing valid the so-called “Himalaya Clause” of a bill of lading which exempts “…. every independent contractor from time to time employed by the carrier” from claims for negligence, a great deal of the protection given to cargo owners by The Hague Rules has been removed.
In The New Zealand Shipping Co., Ltd. v. A. M. Satterthwaite & Co., Ltd.,[1974] 1 Lloyd’s Rep. 534 (The Eurymedon) the majority of the Judicial Committee of the Privy Council was of the opinion that the stevedores could take the benefit of the time limitation provisions in the bill of lading. The carrier, the Federal Steam Navigation Co., Ltd., received on board their vessel Eurymedon at Liverpool an expensive drilling machine for shipment to Wellington, New Zealand. The stevedores, The New Zealand Shipping Co., Ltd., dropped the machine during discharge causing £800 worth of damage. The consignee, A. M. Satterthwaite & Co., Ltd., having omitted to sue the carrier within the limitation period of one year, brought an action against the stevedores alleging negligence. The bill of lading incorporated the Carriage of Goods by Sea Act, 1924, and the “Himalaya” clause:
“It is hereby expressly agreed that no servant or agent of the carrier (including every independent contractor from time to time employed by the carrier) shall in any circumstances whatsoever be under any liability whatsoever to the shipper, consignee or owner of the goods or to any holder of this Bill of Lading for any loss or damage or delay of whatsoever kind arising or resulting directly or indirectly from any neglect or default on his part while acting in the course of or in connection with his employment, and … every exemption, limitation [etc. to which the carrier is entitled] shall also be available and shall extend to protect every such servant or agent of the carrier as aforesaid …. and the carrier is or shall be deemed to be acting as agent or trustee on behalf of and for the benefit of all persons who are or might be his servants or agents from time to time (including independent contractors as aforesaid) and all such persons shall to this extent be or be deemed to be parties to the contract in or evidenced by this Bill of Lading.”
Lord Wilberforce, delivering the Judicial Committee’s majority judgment, said that “the exemption is designed to cover the whole carriage from loading to discharge, by whomsoever it is performed”. The minority judgments were of the opinion that the exemption did nothing of the sort, because “…. anxiety to save negligent people from the consequences of their negligence
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