Electronic Thesis and Dissertation Repository

Thesis Format

Monograph

Degree

Master of Laws

Program

Law

Supervisor

Langille, Joanna

Abstract

The enforcement of Himalaya clauses in contracts for the carriage of goods by sea has gone further than it should have in the common law. By operation of a broadly drafted Himalaya clause, virtually any third party who participates in the performance of carriage can enforce any protection or benefit available to the carrier under the contract as a defense to claims brought by cargo owners for loss or damage to cargo. Following the establishment of a principled exception to the doctrine of privity of contract by the Supreme Court of Canada, Himalaya clauses have been applied expansively in the context of carriage of goods by sea. This Thesis argues that the expansive application of Himalaya clauses in the common law is highly problematic. Such a broad protection of third parties against liability is inconsistent with legal doctrine and it gives rise to a number of legal issues. Thus, this Thesis seeks to find an alternative and restrictive basis for the enforcement of Himalaya clauses in Canadian law.

Summary for Lay Audience

The carriage of goods by sea is a complex venture that requires the employment of several persons, such as shipowners, charterers, crew members, stevedores, terminal operators, and others. These persons are not necessarily parties to the contract of carriage between the cargo owner and the carrier, but they merely participate in its performance (they are third parties to the contract). In case of loss or damage to the cargo in transit, a significant question that arises is: who is liable to the cargo owner? Himalaya clauses are commonly included in contracts of carriage to enable third parties to benefit from contractual terms, such as exemptions or limitations of liability, against claims brought by cargo owners for loss or damage to cargo. As a result, third parties can invoke a Himalaya clause in the contract of carriage to exempt or limit their liability for loss or damage to cargo. This project offers an account of the status of Himalaya clauses in Canadian law and its impact on the liability of third parties against cargo owners. The analysis of the development of Himalaya clauses in the common law reveals the tendency of some courts to read such clauses expansively as extending to a wide range of third parties, a wide range of liability and a wide range of additional contractual benefits. This project argues that the expansive application of Himalaya clauses is unsupported by legal principles and it creates a number of problems under Canadian law. This project also stresses the need to restrict the scope of Himalaya clauses in the context of carriage of goods by sea and it proposes an equitable solution to that effect. The ultimate purpose of this project is to expound the function of Himalaya clauses in Canadian law and make an original contribution to the literature on this topic.

Notes

Part of this project has been published in the Canadian Bar Review, Vol 102, No 1 (2024). Citation: Mary Ppasiou, "Privity of Contract and Third-Party Beneficiaries in Canadian Shipping" (2024) 102:1 Can Bar Rev 272 https://cbr.cba.org/index.php/cbr/issue/view/585

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