Pyrene Co Ltd v Scindia Steam Navigation Co Ltd  2 QB 402
Contract law – Sale of goods – Shipping contracts
The plaintiff delivered a fire tender which was sold by a contract of sale. As the tender was being lifted onto the ship, before it crossed the rail on the ship, it was dropped and subsequently damaged. As per the contract of sale between the parties, the possession of the property had not passed at this stage. A bill of lading had been drawn up but was not issued. The sellers sued the owners of the ship for the cost to repair the tender. The owners of the ship admitted liability but argued their liability would be limited by the Hague Rules, Article 4 (5).
The sellers of the tender claimed that as the goods had not crossed the rail of the ship, the incident had occurred off of the ship and therefore outside the scope of the Hague Rules. Further to this, because the bill of lading had not been conveyed, these terms had not been included in the contract between the parties. Lastly, the seller argued that even if the term had been included in the contract, they could not be applied in the agreement between the ship-owners and themselves.
The court held that limited liability under the Hague Rules did extend to the loading of the cargo on to the ship. Moreover, it was found that the bill of lading was irrelevant and the contract could be regarded as the incomplete bill of lading on the basis that all three parties were deemed to have a benefit from the agreement. As a result of this finding, the plaintiffs could only recover £200 as per the Hague Rules which were considered to be included in the contract.