Usually, a Himalaya clause will be placed within the bill of lading or such other transportation contract.
By such a device, the carrier or shipper attempts to cover and shield companies or persons it employs to assist in the transportation or loading or unloading of goods, with whatever liability exemptions, limitations, defences it may have with the owner of the goods.
Thus, if, for example, a carrier hires a third-party stevedoring company and the crane operator errs and damages goods being unloaded from the carrier's ship, and where there is a Himalaya clause, both the stevedoring company and the carrier will attempt to shield itself from liability by relying on the Himalaya clause.
A typical Himalaya clause might be worded as follows:
"No servant or agent or independent contractor from time to time employed by the carrier shall be liable to the owner of the goods for any loss or damage resulting from any act or negligence on his part while acting in the course of his employment."
Not surprisingly, Himalaya clauses have had a rough history in law, initially accepted by the courts in England in a case which then gave its name to the clause: Alder v Dickson (The Himalaya).
Seven years later, in 1961, the House of Lords had second thoughts and in Midland Silicones rejected the limitation as it purported to apply to stevedores, resting their decision on a lack of privity of contract between the owner of the goods and the stevedore.
In 1974, a further judicial about face as in New Zealand Shipping Co. Ltd. v AM Satterwaite & Co Ltd., it was ruled that a Himalaya clause shielded stevedores.
The New Zealand Shipping Co. case has been used to confirm the validity of a Himalaya clause in carrier contracts in Canada (Marubeni).
In 1986, Canada's Supreme Court, in ITO, sought to clarify the law and agreed that "the Himalaya clause may be effective in Canadian maritime law".
In Ceres, Justice Owen of the Quebec Court of Appeal held that a Himalaya clause would not protect a stevedore where there had been gross negligence.
- Alder v Dickson (The Himilaya) 1955 1 QB 158.
- Ceres Stevedoring Co Ltd v Eisen und Metall AG 72 DLR 3d 660 (1976)
- Duhaime.org wishes to thank Mr. Darren Williams, maritime law lawyer of Victoria, British Columbia, for his assistance in putting together this definition.
- Gaskell, N. and others, Chorley and Giles' Shipping Law (Northampton: Belmont Press, 1987).
- ITO v Miida Electronics Inc. 1986 1 SCR 752.
- Marubeni America Corp. v Mitsui OSK Lines Ltd 1979 2 FC 282
- Midland Silicones Ltd. v Scruttons 1962 AC 446.
- New Zealand Shipping Co. Ltd. v AM Satterwaite & Co Ltd. 1 Lloyd's Rep. 534