TYPICAL LEGAL CONSIDERATIONS
Assuming that causation is established, the next step is applying the law to the particular facts. We will now look at some of the reoccurring legal issues for cargo claims and charterparty claims with a focus on seaworthiness.
Containerised cargo is usually shipped on the container shipping lines’ standard terms of carriage which usually incorporates the Hague or Hague-Visby Convention (the Hague Visby Rules).
Whether or not the contractual carrier of cargo is liable for damage or loss of cargo will be determined by whether the carrier is in breach of his duties under the convention, or whether the damage occurred as a result of perils for which the carrier is exempt from liability.
The carrier’s fundamental duty is to properly care for the cargo.
Under Hague Visby Rules, Article 3 Rule 2, the carrier shall “properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.” This requires the carrier to adopt a solid system to fulfil its obligation throughout the time the cargo is in the carrier’s custody. For instance, if lashings of container stacks appear to come loose during the voyage the carrier is under an obligation to correct the problem and tighten the lashings. This is a contractual obligation meaning that the contractual carrier is contractually bound even if he is not the actual carrier and in direct control of crew onboard. Generally,
the carrier is not obliged to improve stowage inside the container. This responsibility will normally lie on the shipper’s side, see also Hague/ Visby Rules, article 4, rule 2 (n).
When cargo is shipped in apparent good order and condition but is discharged damaged, the carrier bears the burden of proving either that the damage occurred without fault (H/V rules Article 3, rule 2), or that it was caused by an excepted peril within Article 4, rule 2 - Volcafe Ltd v CSAV, 2018, UKSC 61.
The “excepted perils” and non- fault provisions of the Hague/ Visby Rules
1. Error in management of the ship
The Hague/Visby Rules, Article 4 Rule 2 (a) states that “neither the carrier nor the ship shall be responsible for loss or damage arising out of (…) act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship.”
It might be possible for carriers to rely on negligent navigation as an excepted peril if it can be proven that there was, for example, a lack of good seamanship in deciding to sail in severe weather conditions. Also, failure to take the action necessary to prevent excessive rolling may be considered failure to properly navigate and therefore exempt the carrier from liability.
“Management of the ship” does not include management related to the cargo under English law.
The Hague/Visby Rules, Article 4, rule 2 (c) states that “Neither the carrier nor the ship shall be responsible for loss or damage arising out of (…) perils, dangers and accidents of the sea or other navigable waters” In Scrutton on Charter Parties and Bills of Lading, 20th Edition, Article 112, Justice Scrutton has defined such perils to include “perils peculiar to the sea or to a ship at sea, which could not be foreseen and guarded against by the shipowner or his servants as necessary or probable incidents of the adventure”. Hence, the starting point under English law is that such a peril must be “of the sea” in the sense that the loss must be attributed to natural causes.
The criteria “could not be foreseen” means that the peril must be beyond what is reasonably foreseeable and could be avoided by the carrier. This has naturally
This principle was set out in The Gosse Millard case (Gosse Millard v Canadian Government Merchant Marine, 1927, KB 432): “If the cause of the damage is solely, or even primarily, a neglect to take reasonable care of the cargo, the ship is liable, but if the cause of the damage is a neglect to take reasonable care of the ship, or some part of it, as distinct from the cargo, the ship is relieved from liability”. This means that if a container stack collapse is solely caused by error in cargo stowage, there is no exemption from liability for the carrier based on the Hague/Visby Rules, Article 4 rule 2 (a).
2. Perils of the sea
The Report • September 2020 • Issue 93 | 75
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