SANTA ISABELLA: ENGLISH COURT CLARIFIES OWNER AND CARGO VENTILATION AND CARE OBLIGATIONS
The English Commercial Court has provided a ruling in the case of Alianca Navegacao e Logistica Ltda v Ameropa SA (The Santa Isabella) [2019] EWHC 3152 (Comm) which provides useful guidance on: – the legal test for a usual and customary route; and – owners’ obligation to ventilate and care for cargo.
Key facts in the case Alianca, the disponent owner of the bulk carrier Santa Isabella, chartered the ship in 2016 to Ameropa to carry a cargo of corn and maize in bulk from Topolobampo, Mexico to Durban and Richard’s Bay, South Africa. Upon arrival at Durban, significant condensation (ship’s sweat) was found to have damaged the Santa Isabella’s cargo such that a ‘light crust’ had formed on the surface of the cargo and this had to be removed. The authorities refused to allow the cargo to be discharged due to its apparent condition which included a suggestion that it included toxins. This caused extensive delays to discharge operations. Considerable delays were incurred both at Durban and Richards Bay as a result of the condensation damage to the cargo.
Claim The disponent owners brought a claim for demurrage and associated expenses (liquidated damages for delay) for the time the Santa Isabella was delayed in South Africa. The charterers sought to defend the claim, relying upon the rule in the 19th century case Budgett v Binnington [1891] 1 QB 35 that charterers will not be responsible for laytime or time on demurrage when such time has resulted from the fault of owners.
Charterers alleged that owners were at fault for the delays and damage and in breach of their charter party obligations to care for the cargo. Their arguments included: 1. The route taken by owners via Cape Horn was not the usual and customary route when the Panama Canal route was shorter and less risky to the cargo. The choice of route had resulted in damage to the cargo;
2. Owners had failed to properly ventilate the cargo in accordance with a sound system, resulting in damage and delay; and
3. Owners had failed to properly disinfect the topsides outside the cargo holds following loading, resulting in insect infestations causing damage and delay.
The owners countered that: 1. The Cape Horn route was the usual and customary route and was permitted by the charter party; 2. Ventilation was properly carried out when it was safe to do so and when fumigation restrictions allowed. The weather and sea conditions prevented ventilation for the majority of the journey and that was not the fault of owners; and
3. The loadport fumigation operations used three times the recommended dose and owners had complied with their disinfection obligations.
Judgment Mr Justice Henshaw sitting in the English High Court found that the cargo had suffered extensive damage on arrival at Durban. He ruled that: 1. Owners were entitled to take the route around Cape Horn. The judge ruled that the route was a usual and reasonable route for the purpose of identifying the contractual route and did not amount to a deviation. He added that owners may choose to take a longer route than the most direct route, but in order to comply with contractual obligations, it must be both usual and reasonable bearing in mind the interests of all involved. Both commercial considerations and care of the cargo may be relevant. However, owners are not required to undertake a refined analysis of the climactic conditions likely to be experienced on route.
2. Owners had failed to properly and carefully ventilate the cargo in accordance with a sound system. The judge found that this failure was a breach of owners’ duty to care for the cargo and the breach resulted in cargo damage and delays at the discharge port. However, he ruled that there would have inevitably been a crust of damaged cargo and awarded nominal damages to owners for the demurrage attributable to removing this surface crust.
3. Owners had failed to properly disinfect the topsides of the cargo holds which was the likely cause of the insect infestations discovered at Durban. It was found that owners were in breach of Article III Rule 2 of the Hague Visby Rules, which were incorporated in the charterparty.
Read the full article at
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Santa Isabella image courtesy of
shipspotting.com
ROUTE
10 | The Report • March 2020 • Issue 91
Marine News
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