Taikoo Brilliance: Court of Appeal tightens the rules on deck cargo identification

On 4 September 2026, the Court of Appeal handed down judgment in Batavia Eximp & Contracting (S) Pte Ltd v Pedregal Maritime SA, The Taikoo Brilliance [2026] EWCA Civ 1158, clarifying both what constitutes a ‘suit’ for the purposes of the article III rule 6 Hague-Visby time-bar, and what is required for the bills of lading to identify cargo as carried on deck for the purposes of article I(c).

The Court of Appeal agreed with the decision of the lower court that proceedings brought to obtain security, and which are not substantive proceedings capable of deciding the claim, will not be sufficient to protect time. It also held that where different items within a cargo differ in value and only part of that cargo is deck cargo, a statement on the bill of lading describing only the number of pieces carried on deck may be insufficient to disapply the Hague-Visby Rules.

New Zealand pine logs

The owners issued four bills of lading for a consignment of timber carried from New Zealand to Kandla, India, on board the Taikoo Brilliance. The bills incorporated a London arbitration clause and were subject to the Hague-Visby Rules. Two of the bills recorded part of their cargo as being carried on deck: one referred to 22,994 pieces, the other to 11,092 pieces in this regard. On 16 September 2019, discharge was commenced at Kandla against a letter of indemnity from the charterers, without production of the original bills. The bill of lading holders subsequently alleged that the cargo had been mis-delivered.

The bill of lading holders initially arrested a sister ship in Singapore on 18 August 2020 to obtain security for their claim. Although those proceedings were later stayed, arbitration was not commenced until 22 December 2020, more than one year after the alleged mis-delivery.

The tribunal decided that the article III rule 6 one-year time-bar applied only to the cargo stowed in the holds, as the deck cargo fell outside the definition of ‘goods’ in article I(c), being cargo that ‘is stated as being carried on deck and is so carried’, and was not therefore subject to the Hague-Visby Rules at all. The arrest proceedings were not sufficient to protect time but the tribunal took the view that the bills did adequately describe the cargo carried on deck. The bill of lading holders appealed the time-bar finding to the Commercial Court and the shipowners appealed the sufficiency of the deck cargo wording.

Our previous article, ‘Security is not a suit: what shipowners need to know after The Taikoo Brilliance (28 April 2026)‘, discussed the Commercial Court’s decision, which was handed down earlier this year.

Article III rule 6: ‘unless suit is brought within one year’

The Commercial Court held that ‘suit’ under article III rule 6 means substantive proceedings capable of deciding the claim, and that proceedings brought solely to obtain security, such as the Singapore arrest, do not qualify. The Court of Appeal agreed with that finding, and likewise dismissed the appeal.

Drawing on the Supreme Court’s guidance in Fimbank Plc v KCH Shipping Co Ltd, The Giant Ace [2024] UKSC 38, the Court of Appeal acknowledged that the language of article III rule 6 should be interpreted in accordance with the object and purpose of the rules. It was plain that the meaning of the word ‘suit’ in this context ‘means proceedings that can decide the claim’. After all, ‘the whole purpose of the rule … is to protect shipowners from being subjected to claims for loss of or damage to cargo which have not been promptly made and promptly pursued’. To allow security-only proceedings to interrupt time would undermine the finality the time-bar is designed to achieve, potentially leaving claims open indefinitely. The only proceedings which could protect time were those that were competent to decide the merits of the claim.

Article I(c): when is cargo ‘stated as being carried on deck’?

The Court of Appeal’s more prominent finding concerned the adequacy of the references to deck cargo on the two bills of lading. Article I(c) of the Hague-Visby Rules excludes from the definition of ‘goods’ cargo that is stated in the bill of lading to be carried on deck and is so carried, thereby placing the carriage beyond the ambit of the rules, including the one-year time-limit. Where an entire cargo is carried on deck and stated on the face of the bills to be so carried, the disapplication of the rules ought to be straightforward.

The difficulty in the present case was that only some of the cargo described in each bill was carried on deck, potentially applying parts of the same shipment to two different contractual regimes, but only if the deck cargo was identified with certainty.

The Commercial Court had dismissed the owners’ appeal, holding that the tribunal was not wrong in law to treat a bare statement of quantity as sufficient, although it noted that clearer drafting would have been preferable. It had been necessary for the tribunal to rely on extraneous documentary evidence in order to determine which items of cargo had been stowed on deck, as this could not be ascertained solely from the bills of lading.

The Court of Appeal disagreed with the Commercial Court and allowed the shipowner’s appeal. It held that the purpose of article I(c) is to let a shipper or endorsee of the bill of lading know precisely which items of cargo are carried on deck, so the bill of lading holder can manage its commercial risk accordingly. Where the items of cargo referenced in the bill of lading vary in value, as the timber did here, a bare statement of the quantity stowed on deck is insufficient. The cargo was not homogenous and it was not clear from the face of the bills which of the different pieces were carried on deck. The bills should have identified the deck cargo with certainty, for example, by reference to parcel number or serial number.

As the bills failed adequately to identify the cargo carried on deck, that cargo was not excluded from the definition of ‘goods’ in article I(c). The deck cargo remained subject to the Hague-Visby Rules, including the one-year time bar, with the result that the entire mis-delivery claim was time-barred.

The Court of Appeal left open the question of whether the position would differ for a homogenous cargo, or one that does not vary in value.

Comment

The decision has important drafting implications for carriers and their agents where only part of a bill of lading cargo is carried on deck, particularly where individual items within that cargo differ in value. In such circumstances, a simple statement recording the quantity carried on deck may not suffice to engage the article I(c) exclusion. Carriers should ensure that they identify any part of a cargo that is carried on deck with sufficient precision to identify with certainty which items are contractually excluded from the Hague or Hague-Visby regime.

The judgment also reaffirms that proceedings brought solely to obtain security will not protect time under article III rule 6. Cargo interests must ensure that substantive proceedings are commenced before the appropriate forum within one year from delivery, or obtain adequate extensions of time from their contracting carrier, irrespective of any arrest proceedings or other attempts to procure security.