Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd [1981] 1 WLR 138
Whether independent sub-contractors could rely upon a ‘Himalaya clause’ excluding liability for negligence.
Facts
Goods were unloaded from a ship at a wharf and stored in a near shed which was under the control of the wharf’s stevedore. Thieves dishonestly claimed that they were the intended recipients of the goods to an agent of the stevedore. Typically in such circumstances the party claiming ownership would be expected to produce a bill of ladings as proof of title, however the thieves did not do so and the agent delivered the goods to the thieves despite this. The rightful intended recipient of the goods brought an action against the stevedore for professional negligence. The stevedore contended that he was protected against such an action by a ‘Himalaya clause’ in the bill of ladings between the recipient and the ship charterer which provided that the various immunities granted to the charterer could be extended to independent agents contracted by the charterer.
Issue
Could the stevedore reasonably rely upon the exclusion of liability clause in the bill of ladings.
Decision/Outcome
The Court found for the stevedore, viewing that, generally speaking, stevedores were entitled to rely upon the same protections granted to their principle agents, as per the principle established by the Privy Court in New Zealand Shipping v Satterthwaite [1975] AC 154. Lord Wilberforce, providing the leading judgment, asserted that whilst the Court would give due regard to all the circumstances, there ought not be excessive emphasis on minor technical distinctions regarding contract type in considering whether the Satterthwaite principle ought apply.
Words: 274
Updated 19 March 2026
This case summary remains broadly accurate as a description of the Privy Council’s decision in Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Australia) Pty Ltd [1981] 1 WLR 138 and its relationship to the Himalaya clause principle established in New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd (The Eurymedon) [1975] AC 154.
However, readers should be aware of two points of legal context. First, the law on third-party rights in England and Wales has developed significantly through the Contracts (Rights of Third Parties) Act 1999, which allows third parties expressly identified in a contract to enforce terms in their favour, including exclusion clauses, without needing to satisfy the agency analysis applied in Satterthwaite and Port Jackson. Himalaya clauses remain in common use in shipping contracts and the 1999 Act does not render them redundant, but students should understand that the Act now provides an alternative statutory route to the same outcome in many cases. Second, the article incorrectly refers to the tribunal as the ‘Privy Court’; the correct designation is the Privy Council. This is a factual inaccuracy rather than a stylistic point. The underlying legal principles described remain good law.
