Lords stamps on shipowner's use of Himalaya clause to escape liability

The Himalaya clause, infamous among maritime law experts, has two main provisions: first, the right for a party to benefit from a contract which it has not entered into; and second, the right for such a party to avoid liability altogether by a non-responsibility clause - usually a limitation clause such as a time bar.

In the Lords action, three cargo-owners were seeking compensation from the owner of a ship, Starsin, after a cargo of timber and plywood became gradually damaged during a long voyage from the Far East to Europe.

The shipowner was not found liable in contract but was liable in tort in relation to one of the cargo-owners. The shipowner thus sought to claim under the Himalaya clause that it had a general exemption from liability - not because of limitation, but on the much wider and highly unusual grounds of having an independent contract, which gave it automatic and complete exemption. This was rejected by the Lords.

Iain Milligan QC of 20 Essex Street and Nigel Jacobs of 4 Essex Court, instructed by Clyde & Co, represented the cargo-owners. Steven Gee QC and Vasanti Selvaratnam of Stone Chambers, instructed by Holmes Hardingham, acted for the shipowners.