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Defence, Cross-claim and Set-off

Time Bar
Last updated: 06-Oct-2014

Aries Tanker Corporation v Total Transport Ltd (The Aries) [1977] 1 All ER 398 per Lord Wilberforce:

The contract contemplates the possibility of a cross-claim by the charterers in respect of loss or damage to the cargo and it expressly provides by incorporation of art III, r 6 of the Hague Rules that the carrier and the ship shall be discharged unless suit is brought within one year after the date of delivery or the date when delivery should have been made. This amounts to a time-bar created by contract. But, and I do not think that sufficient recognition to this has been given in the courts below, it is a time-bar of a special kind, viz one which extinguishes the claim (cf art 29 of the Warsaw Convention 1929) not one which, as most English statutes of limitation (e g the Limitation Act 1939, the Maritime Conventions Act 1911), and some international conventions (e.g. the Brussels Convention on Collisions 1910, art 7) do, bars the remedy while leaving the claim itself in existence. Therefore, arguments to which much attention and refined discussion has been given, as to whether the charterer’s claim is a defence, or in the nature of a cross-action, or a set-off of one kind or another, however relevant to cases to which the Limitation Act 1939 or similar Acts apply, appear to me, with all respect, to be misplaced. The charterers' claim, after May 1974 and before the date of the writ, had not merely become unenforceable by acting, it had simply ceased to exist, and I fail to understand how a claim which has ceased to exist can be introduced for any purpose into legal proceedings, whether by defence or (if this is different) as a means of reducing the owners' claim, or as a set-off, or in any way whatsoever. It is a claim which, after May 1974, had no existence in law, and could have no relevance in proceedings commenced, as these were, in October 1974. I would add, though this is unnecessary since the provision is clear in its terms, that to provide for the discharge of these claims after 12 months meets an obvious commercial need, namely to allow shipowners, after that period, to clear their books.

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