Sub-contractor

This Rule was not in the Hague Rules and introduces a significant change. It allows the carrier to commence an action for indemnity against a third party even after the one year time limit provided for in the preceding paragraph if brought within the time allowed by the law of the court seized with the case.  However, the time allowed shall not be less than three months, commencing from the day when the person bringing such an action for indemnity has settled the claim or has been served with process in the action against himself. This addition to Rule III 6 was added to overcome the problems experienced by carriers who sub-contract all or part of the carriage but remain primarily liable to the merchant for the performance of the contract by reason of the absence of any demise clause in the B/L.  If a claim is made or suit commenced against such a carrier at the last minute the carrier would otherwise have little or no time within which to protect his right of recourse against the sub-contracting carrier. The addition gives the primary carrier at least three months in which he can either settle the claim by amicable agreement or proceed against the sub-contractor. It will be seen that this can be valuable in the case of a container carrier using a combined transport B/L where the loss or damage is caused by a feeder ship.