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Extension of Time Limit under the Carriage of Goods by Sea Act, B.E. 2534 (Thai COGSA)

                                                                                                                      
Whenever an issue of time extension is mentioned, most lawyers, no matter from which school, share the same thought that time limit fixed by law cannot be called off, extended or shortened because it is clearly prohibited by Section 193/11 of the Civil and Commercial Code. This thinking has taken root in lawyers’ mindset ever since the Civil and Commercial Code was promulgated on 1st January 1925.

Then came along the Contract of Goods by Sea Act, B.E. 2534 which took effect in early 1992. As a result, claims for damage to, loss of, or delay in delivery of the goods carried under a contract of carriage of goods by sea (bill of lading) shall be governed by this Act. The Act stipulates time limit for exercising such claims in its Sections 46, 47 and 48 as follows:

 

“Section 46. Subject to the provisions of Sections 47 and 48, any right to claim for loss of or damage to the goods or for delay in delivery of the goods carried under a contract of carriage of goods by sea under this Act is barred by prescription if no action, or arbitration proceedings have been brought or commenced within one year from the day on which the carrier has delivered the goods or, where no goods have been delivered, from the day after the date of delivery under Section 41(1) or, from the day after the lapse of the time which would reasonably require for delivery under Section 41(2).

 

Section 47. At any time before the expiration of prescription under Section 46, the person against whom a claim is made may give his written consent and bearing his signature to effect that no prescription shall be invoked against the claimant in the case where an action is brought to the Court or the dispute is submitted to the arbitration. Such consent is enforceable.

 

Section 48. The right to claim compensation for damages resulting from delay in delivery ceases to exist if the consignee has not given to the carrier a notice in writing within sixty days from the date of taking delivery of the goods.”

 

Any lawyer or lay person reading the above three Sections of the law can easily see the intention of Sections 46 and 48. But it is Section 47 which may be a problem because it is not clear if this Section is about not raising or waiving the issue of time limit as a defense or it is about extending the time limit. Those who are involved in the business of carriage of goods by sea, especially shipping liners, may be familiar with requests from cargo interests, whether they be shippers or consignees, to issue letters to extend time limit for claims arising from loss, damage or delay in delivery of goods. Some liners have obligingly complied and issued a letter containing customary short wording that reads “we agree to grant you three-month time extension.” However, there have been some cargo owners refusing to accept the letter for time limit extension offered by shipping liners because they think the wording would be unenforceable due to its contravention with Section 193/11 of the Civil and Commercial Code. This issue has been brought to the Supreme Court’s consideration and in its judgment no. 2888/2549, the Court implied that a written permission to extend prescription for claim is deemed a consent enforceable under Section 47 of the Carriage of Goods by Sea Act, B.E. 2534. Interestingly, the Supreme Court interpreted the wording of consent for time extension as a waiver of time limit defense by the party against whom a claim would be made. 

For more detail, this case involved shipment of durians from Thailand to Taiwan. The plaintiff was the shipper and the first defendant the carrier. The fruits were expected to reach Taiwan not later than 25th March 2000, but the vessel carrying them broke down and could not continue the voyage. The fruits had to be sent back and survey was held and finished on 30th March 2000. After that the plaintiff and the first defendant negotiated settlement of the claim via written exchanges. Finally, the first defendant issued a letter dated 7th February 2001 to the plaintiff, saying “we agree to grant you three-month time extension until 25th June 2001”.  

The above wording, no matter how you read it, is about an extension of time limit for the claim, not a waiver of time limit defense. But in the view of the Supreme Court, based on the parties’ conduct, it was clear the first defendant’s letter was issued before the end of the one year period from the day the goods (durians) should have been delivered and with the intention for the letter to be actually binding. The way the Court interpreted the letter was founded upon Section 171 of the Civil and Commercial Code which provides that the interpretation of a declaration of intention must seek the true intention rather than literal meaning of the words. So, on that basis, the Court held the carrier’s letter of consent as a waiver of time limit defense. And since the plaintiff filed the lawsuit with the court within 25th June 2001 and the consent was enforceable under Section 47 of the Carriage of Goods by Sea Act, B.E. 2534, the plaintiff’s lawsuit against the first defendant was not yet time barred.

Essential points derived from the above Supreme Court Judgment are that:

1.    although the person signing the letter issued by the party against whom a claim would be made was just a claims manager acting on behalf of the company, the letter had binding effect on the company.

2.    the carrier’s customary short declaration that “we agree to grant you three-month time extension” could result in the extension of time limit.

3.    time extension must be done before expiration of the time limit.

Although the Supreme Court Judgment No. 2888/2549 has helped to clarify the issue of extension of time limit to a certain extent, there are many other questions to be pondered further, for example; 

(1)   How many times the time limit can be extended under Section 47?

(2)   If the party against whom a claim is made is not a carrier but a shipper, can the shipper also rely on the above Section 47 to extend the time limit?

(3)   Will e-mail bearing only the printed name of the sender be regarded as signed by the sender?

(4)   Does time limit extension under Section 47 only apply to cargo claims based on contracts of carriage of goods by sea, or include cargo claims based on tort as well?       

(1)        How many times can the time limit be extended under Section 47?

 

In the Thai COGSA, the right to exercise claim is stipulated in Sections 46, 47 and 48. In those Sections, there are not any provision stating how many times the time limit for claim can be extended. This is unlike the Multimodal Transport Act, B.E. 2548 which clearly provides that a consent not to raise prescription in defense and extension of time limit for claim cannot be more than 2 years from the day the multimodal transport operator delivered or ought to deliver the goods. For the reader’s reference, Section 38 of the Multimodal Transport Act provides:

 

“Section 38. Any claim arising from the multimodal transport, whether on ground of the multimodal transport contract or tort, is barred by prescription if no action or arbitration proceedings have been brought or instituted for decision under the provisions in Chapter 3 within 9 months from the day on which the multimodal transport operator delivered, or should have delivered the goods.

           Within the prescription under paragraph one, if the person against whom a claim is made has given his written consent bearing his signature to the effect that no prescription shall be invoked in the case where an action is brought to the court or the dispute is referred to arbitration, such consent is enforceable, but shall not exceed 2 years from the day on which the multimodal transport operator delivered, or should have delivered the goods.

          ………………………………………”

 

(2)        If the party against whom a claim is made is not carrier but shipper, can the shipper as well rely on Section 47 to extend time limit?

 

The Supreme Court did not address this issue in its judgment no. 2888/2549. Therefore, it remains a question whether the shipper can avail himself of Section 47 of Thai COGSA to extend time limit. However, it may be surmised from the wordings of Section 46 and Section 47 of Thai COGSA that the shipper should not be able to cite Section 47 to extend time limit since the right to claim compensation as provided under Section 47 and Section 46 is confined to three kinds of damages, namely loss of, damage to and delay in delivery of goods carried under the contract of carriage of goods by sea caused by the carrier’s fault. As a result, the party against whom a claim is made under the contract of carriage of goods by sea for loss of, damage to or delay in delivery of goods can only be the carrier by virtue of Section 46. By literal interpretation of the law, the shipper who is not bound by duty under the contract of carriage of goods by sea to deliver the goods cannot rely on Section 47 to extend time limit for claim.

 

(3)        Is e-mail bearing only the name of the shipper enough to be considered written consent signed by the shipper?

 

In the Supreme Court Judgment No. 2888/2549, the defendant (carrier) sent a letter to the plaintiff (shipper) containing a statement which read: “We agree to grant three-month extension”. The letter was sent by electronic mail without signature. Only the name of the issuer was stated. Although Section 47 requires that the consent not to invoke prescription against the claimant must be signed by the party against whom the claim is made (the carrier), the Supreme Court applied the rule of interpretation based on the parties’ true intention under Section 171 of the Civil and Commercial Code to the case under dispute. Such interpretation together with confirmation of the person who issued the above mentioned letter led the Court to consider the e-mailed letter bearing only the name of the shipper as good as signed by him.

 

Turning to the Multimodal Transport Act, B.E. 2548, this law also contains provisions concerning a consent not to invoke prescription defense or extension of time limit in its Section 38 paragraphs 2 and 3. The law similarly requires such consent to be made in writing and signed by the party against whom a claim is made. By the effect of the ruling established by the Supreme Court Judgment No. 2888/2549, the court’s notion of the sending of written consent not to invoke prescription defense or to extend time limit for claim under the Multimodal Transport Act, B.E. 2548 should not be any different from that under the Thai COGSA.

 

(4)        Does time extension under Section 47 only apply to cargo claims under contract of carriage of goods by sea, or does it apply to cargo claims on ground of tort as well?

 

The Supreme Court Judgment No. 1639/2549 has established that limitation of carrier’s liability under the Carriage of Goods by Sea Act, B.E. 2534 would apply in the case where the plaintiff sued the carrier for liability under contract of carriage of goods by sea as well as for liability under tort. Therefore, by analogy, if the carrier can cite limitation of liability both on grounds of contract of carriage and tort, there is no reason why time extension cannot be applied to cargo claim based on tort as well.

 

This article is written by the Shipping Team of Pramuanchai Law Office Co., Ltd. If you have any comments or questions concerning the article, please contact us at the following e-mail address:

    E-mail Address: This e-mail address is being protected from spambots. You need JavaScript enabled to view it  
    Contact Persons: Pramual Chancheewa, Sken Kongkaew, Thanakrit Srirasa

 

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