The Himalaya Clause

In The Stolt Sydness (1997) Mr. Justice Rix concluded that English law applied in a case where Hague Rules were incorporated by a U.S. clause paramount. The parties will usually want to know in advance where any disputes will be determined and by what law, so that they know the extent of the liabilities that they are undertaking and the rights to which they are entitled. A valid exclusive jurisdiction clause will usually prevent forum shopping. Himalaya clause  In The Himalaya  a passenger fell off a gang plank due to the negligence of the master and bosun in mooring the ship. The passenger successfully sued the master and bosun. The exemption clause in the ticket the passenger held did not extend to the master and bosun. This gave rise to the Himalaya clause which, properly drafted, makes the crew party to the contracts made by the shipowner as well as giving them the same exemptions and limitations. In The Eurymedon (1975) and The New York Star (1980) the Himalaya clause received judicial sanction. It was said that the carrier may contract as agent for the stevedore if the bill makes it clear that the stevedore is intended to be protected by its provisions; the carrier contracts as agent for the stevedore that such provisions should apply to it; the carrier has authority from the stevedore or there is a later validation; there is no difficulty about the stevedore providing consideration. In The Mahkutai (1996) the Privy Council considered the extent to which a Himalaya clause in a time charterers’ bill of lading was effective to extend to the shipowner the benefit of a jurisdiction clause in the bill. It drew a distinction between terms such as exceptions or limitations and a jurisdiction clause, on the basis that the latter did not benefit only one party but embodied a mutual agreement under which both parties agree with each other as to the relevant jurisdiction for the resolution of disputes. As it created mutual rights and obligations it did not fit within the list of terms commonly referred to in standard Himalaya clauses e.g. exceptions, limitations, conditions or liberties benefiting the carrier.