Background
Three lots of herring were accepted by the Hurry On (owned by Unus Shipping) at Middle Arm, Newfoundland for shipment to Vita Foods of New York. The bills of lading — in this case, not the type normally issued at Newfoundland ports, but intended for use in ports elsewhere — provided for exemption from liability for master’s negligence in navigation which was allowed under the Hague Rules, which further provided that any clause or agreement in the bills of lading relieving the carrier from liability for negligence imposed by the Rules was void. There was a further provision in the bills of lading that, in the case of shipment from the United States, the Harter Act should apply and that, unless otherwise provided, the bill of lading was subject to the terms of the Canadian Water Carriage of Goods Act, 1910. Finally the bills of lading contained the following clause: "This contract shall be governed by English law."
The bills of lading for these lots did not conform to the Carriage of Goods by Sea Act 1932 (Newfoundland), which required that they contain an express clause paramount that the Hague Rules applied.
During the voyage, the ship ran into bad weather and ice off Nova Scotia and went ashore in a gale of wind. The ship was eventually set free, and made for Guysborough, where the cargo was unloaded, reconditioned and forwarded by another ship to New York, where Vita took delivery of the cargo in its damaged condition and paid for the freight.
Vita sued Unus in Nova Scotia for the damage to the cargo, salvage and other expenses. It also alleged that the Hurry On was unseaworthy, and that the bills of lading were illegal because they did not contain an express clause adopting the Hague Rules, and thus was subject to the liabilities of a common carrier. Unus, in its defence, asserted that, as the bills stated that they would be governed by English law, the Hague Rules were incorporated by reference, as they were the ones in force under the English Carriage of Goods by Sea Act 1924.
Read more about this topic: Vita Food Products Inc. V. Unus Shipping Co. Ltd.
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