What Is a Himalaya Clause ?

What Is a Himalaya Clause ?

A Himalaya clause is a clause in a bill of lading that extends the carrier's defenses and limitations of liability under the bill to the carrier's agents and subcontractors.

The roots of that requirement lie in the seminal American case on Himalaya clauses, Robert C. Herd & Co. v. Krawill Mach. Corp., 359 U.S. 297, 79 S.Ct. 766, 3 L.Ed.2d 820 (1958). In Herd, the Supreme Court refused to extend a bill of lading's liability limitations to a stevedore, because the bill only mentioned the carrier as the beneficiary of those limitations. Id. at 302, 79 S.Ct. at 769-70.

The Herd Court, however, left open the possibility that a clause in a bill of lading could limit the liability of parties hired by the carrier, if drafted with sufficient clarity to specifically identify those parties. Id.

Subsequent cases made that possibility a reality. Today Himalaya clauses are standard fare in bills of lading. However, courts addressing the enforceability of Himalaya clauses are constrained by the Herd Court's admonition that "contracts purporting to grant ... limitation of liability must be strictly construed and limited to their intended beneficiaries." Herd, 359 U.S. at 305, 79 S.Ct. at 771.

In Akiyama Corp. of Am. v. M.V. Hanjin Marseilles, 162 F.3d 571, 574 (9th Cir.1998) the two parties were allowed to invoke the Himalaya clause. The first was a terminal operator, who did have contractual privity with the carrier, and was held to be covered by the relational term "independent contractor" in the clause. Akiyama, 162 F.3d at 574.

The second was a stevedore, who contracted with the terminal operator and thus did not have direct contractual privity with the carrier, but was held to be covered by the descriptive term "stevedore" in the clause. Id.