Jurisprudence on Interpretation of Hague-Visby Rules: Excepted Perils


  • Date: 30/09/2010
  • Source: CMI

United States

Anvil Knitwear, Inc. v. Crowley American Transport, Inc. et Al. (United States District Court, Southern District of New York, 27 July 2001, 2001 AMC 2382)

  In May, 1999, Anvil Knitwear, Inc. contracted with Crowley American Transport, Inc. to transport shipments of tee-shirts from a manufacturing plant in Santa Barbara, Honduras, C.A., to its United States’ plant in South Carolina.

  Pursuant to this contract, Crowley issued a bill of lading on June 18, 1999, covering the 786 cartons of cotton tee-shirts that were packed into a container. The bill of lading covered the transportation of the container from Santa Barbara, Honduras, to the load port, Puerto Cortes, Honduras, the ocean transportation via the Ambassador, and the ultimate delivery in South Carolina. The bill of lading stated that the Carriage of Goods by Sea Act of the United States, 46 U.S.C. app. §1300, et. seq. would govern the contract throughout the entire time Anvil’s goods were in Crowley’s possession. The “exceptions clause” of the bill of lading set out a long list of events for which Crowley could not be held liable, including hijacking.

  Crowley’s local agent, Transportes Hispanos, picked up Anvil’s cartons on or about June 16, 1999 from Anvil’s vendor, M.J. Honduras S.A. Shortly after departing from the vendor’s plant, the truck carrying the shipment was hijacked and the goods were stolen. Both parties have stipulated to the fact the Transportes Hispanos driver, Mr. Ramon Enrique Rosales, was not in any way involved with the hijacking.

  Held, by the U.S. District Court, Southern District of New York, that:

  (1) Hijacking, mentioned in an exception clause of a bill of lading, is not sufficiently similar to some COGSA §1304(2) exceptions and more specifically to the exception under §1304(2(f) – act of public enemies – so to fall thereunder and, therefore, it falls under §1304(2)(q). Therefore the carrier has the burden of proving the absence of fault.

EXCEPTED PERILS – ACTUAL FAULT OR PRIVITY (Art. 4. 2(q))

Japan

Court of Appeals of Tokyo 1 October 2001, Tokyo Kaijo-kasai Hoken KK. v. Coastal Magic Shipping Ltd. (Kin’yu Shoji Hanrei no. 1132, p. 16)*

  Fish meal carried in bags from Ecuador to Japan was found on arrival damaged partly by heat and partly by moisture and mould. The consignee sued the carrier claiming damages. The carrier alleged that the damage had been caused by inherent defect of the cargo because of the insufficient antioxidant added to the fish meal. The consignee denied that allegation and stated that the damage had been caused by rain water that entered into the hold due to the improper closure of the hatches and because of the improper stowage of the cargo.

  Held, by the Court of Appeals of Tokyo, that:

  (1) The carrier is exonerated from liability pursuant to Art. 4(2)(q) in respect of damage by mould to fish meal stowed in bulk in the lower deck since the IMDG code permits fish meal of Class 9 to be so stowed.

* A summary of this judgment has been kindly supplied by Prof. Souichirou Kozuka of the Sophia University, Tokio - s-kozuka@hoffman.cc.sophia.ac.jp

EXCEPTED PERILS - ARREST OR RESTRAINT OF PRINCES (Art. 4.2(g))

France

Cour d'Appel of Rouen 23 May 2001, Hanjin Shipping Co. Ltd. v. Thyssen Ascenseurs S.A. (2002 DMF 44).

A container with parts of elevators was shipped by Thyssen Ascenseurs S.A. on the m/v Hanjin San Francisco of Hanjin Shipping Co. Ltd. for carriage to Haiphong in China. The container was transhipped at Hong Kong on the Vosa Carrier but never arrived at destination. It was subsequently found that it had been confiscated by a Chinese Coastguard vessel and that such confiscation had been illegal. Thyssen Ascenseurs S.A. commenced proceedings against Hanjin Shipping Co. Ltd. in the Tribunal de Commerce of Le Havre, whose judgment, allowing the claim, was appealed by the carrier.

Held, by the Cour d'Appel of Rouen, that:

[1] The carrier is exonerated from liability, pursuant to article 4.2(g) of the Hague-Visby Rules, for the loss of a container confiscated by the police of a State when the confiscation has been illegal.

EXCEPTED PERILS – BURDEN OF PROOF (Art. 4. 2)

Italy

Tribunal of Genoa 4 December 2002, Llloyd Italico Assicurazioni S.p.A. v. Grandi Traghetti S.p.A. di Navigazione – m/v “Maringa” [2004] Dir.Mar. 1473

A consignment of 1995 bags of coffee, stuffed in containers supplied by the carrier, was loaded at Matadi on the m/v Maringa and carried to Genoa and then by rail from Genoa to the inland terminal of the carrier at Rivalta Scrivia.
When the containers were inspected they were found damaged and several bags of coffee were found wet and stained. The cargo insurers, Lloyd Italico Assicurazioni S.p.A., settled the claim of the consignees and brought an action against the carrier, Grandi Traghetti S.p.A. di Navigazione, in the Tribunal of Genoa.

Held, by the Tribunal of Genoa, that:

(1) The consignee has the burden of proving that the loss of or damage to the goods occurred when the goods were in the custody of the carrier who in turn, in order to be exonerated from liability, has the burden of proving that the loss or damage was caused by one of the excepted perils enumerated in art. 4(2) of the Hague-Visby Rules.

Court of Appeal of Genoa 6 June 2002, Ignazio Messina & Co. S.p.A. v. Pietro Trombi – m/v “Jolly Rubino” [2004] Dir.Mar. 191

On 9 May 1995 a car owned by Pietro Trombi was loaded on the m/v Jolly Rubino in Genoa. Place of destination was Abidjan, where the vessel was supposed to call in the outward voyage. The car was however discharged heavily damaged when the vessel called at Abidjan in the homeward voyage.
Pietro Trombi brought an action against the carrier in the Tribunal of Genoa claiming a full indemnity. By judgment of 10 October 2000 the Tribunal of Genoa found the carrier liable for the full amount of the loss. The carrier appealed on the ground that the limit of liability set out in art. 4.5(e) of the Hague-Visby Rules should have been applied.

Held, by the Court of Appeal of Genoa, that:

(1) Pursuant to article 4.2 of the Hague-Visby Rules, if the carrier proves that the loss or damage has been caused by one of the excepted perils, it shall be presumed that neither his fault nor that of his servants or agents has caused or contributed to the loss or damage, whereupon the claimant may overcome such presumption by proving that the loss or damage has actually been caused or contributed to by the personal fault of the carrier or the fault of his servants or agents.

United States

United States of America v. Ocean Bulk Ships, Inc., m/v “Overseas Harriette” and m/v “Overseas Marilyn” (United States Court of Appeals-5th Circuit 10 April 2001) (2001 AMC 1487)

  Between 1994 and 1996, the United States, through its Commodity Credit Corporation (CCC), and with the assistance of several private relief organizations, shipped cargoes to famine-stricken areas of Africa on behalf of the Agency for International Development (AID). The cargoes were shipped under various charter parties made expressly subject to COGSA on the m/v Overseas Harriette and the m/v Overseas Marilyn, vessels owned by the defendants, Ocean Bulk Ships, Inc., and Transbulk Carriers, Inc. The shipments included a variety of foodstuffs such as vegetable oil, corn, and bulgur wheat, which were shipped to the African ports of Mombasa, Kenya; Beira and Maputo, Mozambique; Freetown, Sierra Leone; and Tema, Ghana. Clean bills of lading were issued for each shipment after the cargo was stowed, indicating that the cargo was received by the carrier in good condition. Unfortunately, the goods were not received in the same quantity or quality when discharged in Africa. Survey reports documenting the loss and damage indicated several problems. Some parts of the cargo were simply not received at all. Some parts of the cargo were received in a damaged and unusable condition. The total amount of documented loss and damage to the cargo was $203,319.87.

  In December 1998, the United States filed the first of five lawsuits, seeking damages for the lost and damaged cargo under COGSA. In February 1999, these suits were consolidated. In September 1999, the matter was tried to the bench. In December 1999, the district court entered judgment in favor of the United States for the limited sum of $7,300.08, the amount of damage that the defendants admit occurred prior to discharge. The judgment was appealed.

  Held, by the U.S. Court of Appeals for the 5th Circuit, that:

  (1) There does not appear to be any consensus among circuits, or even in the 5th Circuit, concerning which Cogsa party bears the burden of persuasion (and the risk of non persuasion) with respect to the applicability of the statutory exceptions codified at § 1304(2)(a)-(p) once the shipper makes out a prima facie case.

  (2) The exception codified at § 1304(2)(q) requires the carrier to bear the burden of persuasion.

  (3) Without regard to whether the carrier’s rebuttal burden under § 1304(2)(n) is one of production or persuasion, the law is absolutely clear that the carrier must do more than offer mere speculation as to the cause of lost or damaged cargo. When the carrier’s negligence is at least a concurrent cause of the loss, the carrier bears the burden of establishing which portion of the loss is not attributable to its negligence.

EXCEPTED PERILS - FAULT IN NAVIGATION OR MANAGEMENT (art. 4.2(a))

Germany

Federal Supreme Court (Bundesgerichtshof) 26 October 2006 – M/v “Cita”, I ZR 20/04

  (The summary of facts may be found in the section “Due diligence”)

  Held, by the Federal Supreme Court (Bundesgerichtshof), that:

[1]  The action of setting a new course which led to the grounding of the vessel, the failure to keep a watch with two persons and the switching off of the alarm that would ensure that the personnel on watch does not fall asleep are all faults in the navigation and management of he vessel for which the carrier is not liable.
[2]  The exoneration of liability of the carrier under § 607.2.1 HGB applies also where the  action or omission in the navigation or management is intentional.

New Zealand

Tasman Orient Line Line CV v. New Zealand China Clays Ltd. and Others, Court of Appeal of New Zealand 9 April 2009, [2009] NZCA 135.

  The Tasman Pioneer left Yokohama, Japan, in the evening of 1 May 2001, bound for Pusan in South Korea, intending to sail west along Japan’s Pacific coast and then via the Japan Inland Sea across the Korea Strait. On 2 May, the master of the Tasman Pioneer, realising that the ship was behind schedule, decided that, rather than passing west of Okino Shima, the usual route for vessels entering the Inland Sea from the south, he would shorten steaming time by some 30-40 minutes by taking the channel between the island of Biro Shima and the promontory of Kashiwa Shima, the south-western extremity of the island of Shikoku.

  Shortly after the master altered course to enter the channel at 0250 hrs on 3 May, the ship lost all images on its starboard radar. It appeared that the master then tried to abort the passage through the channel. This manoeuvre was not successful and the ship struck bottom off Biro Shima with such force that her speed was immediately slowed to some 6 or 7 knots from her running speed of 15 knots. Shortly afterwards the ship took a list to port and water was discovered in the forward ballast tanks and in the forward cargo holds 1 and 2. On the orders of the master, the ship’s pumps were activated. However, the master did not alert the Japanese Coastguard, as he should have done, or seek other assistance. The ship then sailed at close to full speed for a further two hours (some 22 nautical miles), before anchoring in a sheltered bay. It was only then that the master contacted the ship managers in Greece, without, however, specifying the cause of damage or its full extent. The managers then arranged for the Coastguard to be advised of the incident and for salvors to be engaged on LOF 2000. The master’s initial explanation of the casualty was that the ship had hit an unidentified floating object and he schooled the crew to adopt this explanation in the enquiry conducted by the Japanese coastguard, in the course of which the truth eventually emerged.

  New Zealand China Clays Ltd. and other cargo owners brought proceedings against Tasman Orient Line Line CV, the owners of the ship, in the New Zealand High Court, Auckland Registry claiming damages for the loss of their cargo.

  By judgment of 31 August  2007 the High Court held that the actions of the master of a ship who, after the ship grounded suffering damages, fails to notify promptly the Coastguard and his managers of the casualty and the ship’s position and condition and fabricates the story that the ship hit an unidentified submerged object do not amount  to an “act, neglect or default in the “bona fide” navigation and management of the ship” and, as a result, the carrier is not entitled to the benefit of exemption from liability set out in article 4 (2)(a) of the Hague- Visby Rules.

  Tasman Orient Line Line appealed.

  Held, by the Court of Appeal of New Zealand that:

  [1]  The nineteenth century ascendancy of the United Kingdom in shipping continued until after WWI. It remained influential in the drafting of the Hague Rules. But to what extent can the former common law of England still be said to inform the interpretation of the Rules? The Rules are to be construed as a comprehensive international convention, unfettered by any antecedent domestic law, and the practice of text writers and some judges to hear back to the old English common law is erroneous. But because such practice is deep-seated and relied upon by the High Court it is necessary for us to outline briefly what we are departing from and how the Hague Rules took a different course.

  Certainly, as the cases show, for the most part the courts must defer to the conduct of the master. The Hague-Visby Rules, hammered out by international expert participants and widely endorsed in domestic legislation, has secured international assent to a trade-off between the competing interests of shippers and ship-owners. Article 4.2(a) is not to be read narrowly so as to substitute second guessing by lay judges for navigational decision-making by expert mariners.

 

Nor however is it to be read so widely as to render meaningless the obligation of the carrier under art 3.2. To exonerate a carrier from conduct of similar quality to deviation, namely conduct that is radically at odds with the art 3.2 obligation, by sacrificing the shipper’s interests for wholly incompatible selfish interests of the master, goes over the boundary of the art 4.2(a) protection.

 

 

 

New Zealand China Clays Ltd. v. Tasman Orient Line CV – The “Tasman Pioneer” – New Zealand High Court, Auckland Registry, 31 August 2007 (http://www.maritimelaw.org.nz/0907.html)*

  The Tasman Pioneer left Yokohama, Japan, in the evening of 1 May 2001, bound for Pusan in South Korea, intending to sail west along Japan’s Pacific coast and then via the Japan Inland Sea across the Korea Strait. On 2 May, the master of the Tasman Pioneer, realising that the ship was behind schedule, decided that, rather than passing west of Okino Shima, the usual route for vessels entering the Inland Sea from the south, he would shorten steaming time by some 30-40 minutes by taking the channel between the island of Biro Shima and the promontory of Kashiwa Shima, the south-western extremity of the island of Shikoku.
  Shortly after the master altered course to enter the channel at 0250 hrs on 3 May, the ship lost all images on its starboard radar. It appeared that the master then tried to abort the passage through the channel. This manoeuvre was not successful and the ship struck bottom off Biro Shima with such force that her speed was immediately slowed to some 6 or 7 knots from her running speed of 15 knots. Shortly afterwards the ship took a list to port and water was discovered in the forward ballast tanks and in the forward cargo holds 1 and 2. On the orders of the master, the ship’s pumps were activated. However, the master did not alert the Japanese Coastguard, as he should have done, or seek other assistance. The ship then sailed at close to full speed for a further two hours (some 22 nautical miles), before anchoring in a sheltered bay. It was only then that the master contacted the ship managers in Greece, without, however, specifying the cause of damage or its full extent. The managers then arranged for the Coastguard to be advised of the incident and for salvors to be engaged on LOF 2000. The master’s initial explanation of the casualty was that the ship had hit an unidentified floating object and he schooled the crew to adopt this explanation in the enquiry conducted by the Japanese coastguard, in the course of which the truth eventually emerged.

  Held, by the New Zealand High Court that:

  [1]  The actions of the master of a ship who, after the ship grounded suffering damages, fails to notify promptly the Coastguard and his managers of the casualty and the ship’s position and condition and fabricates the story that the ship hit an unidentified submerged object do not amount  to an “act, neglect or default in the “bona fide” navigation and management of the ship” and, as a result, the carrier is not entitled to the benefit of exemption from liability set out in article 4 (2)(a) of the Hague- Visby Rules.

*  By the courtesy of David Martin Clark (www.onlinedmc.co.uk)

 

EXCEPTED PERILS - FIRE (Art. 4.2 (b)

England

Papera Traders Co. Ltd. and Others v. Hyundai Merchant Marine Co. Ltd. and Another - The “Eurasian Dream” [2002] 1 Lloyd’s Rep. 719.

On July 23, 1998, a fire started on deck 4 of the pure car carrier Eurasian Dream while in port at Sharjah. The fire, which was not contained or extinguished by the master and crew, eventually destroyed or damaged the vessel’s cargo of new and second-hand vehicles and rendered the vessel itself a constructive total loss.
The relevant cargo interests commenced proceedings in London against the carrier before the Queen’s Bench Division (Commercial Court)

Held, by the Queen’s Bench Division (Commercial Court), that:
(1) Where the cargo owners allege that the fire that destroyed or damaged the cargo was due to the unseaworthiness of the vessel they have the burden of proving (i) that the vessel was unseaworthy before and at the beginning of the voyage and (ii) that the loss or damage was caused by that unseaworthiness.
(2) If the cargo owners discharge the burden in respect of 1(i) and (ii) above, the burden passes to the carrier to prove that it and those for whom it is responsible exercised due diligence to make the ship seaworthy in the relevant respects. If it fails to do so, it is not entitled to rely upon the exceptions in Article 4 r. 2, including the fire exception.
(3) The fire is caused by the unseaworthiness of the vessel if it would not have broken out if the master and crew had been properly instructed and trained.

 

EXCEPTED PERILS – INHERENT VICE (Art. 4. 2(m))

Japan

Court of Appeals of Tokyo 1 October 2001, Tokyo Kaijo-kasai Hoken KK. v. Coastal Magic Shipping Ltd. (Kin’yu Shoji Hanrei no. 1132, p. 16) *

  Fish meal carried in bags from Ecuador to Japan was found on arrival damaged partly by heat and partly by moisture and mould. The consignee sued the carrier claiming damages. The carrier alleged that the damage had been caused by inherent defect of the cargo because of the insufficient antioxidant added to the fish meal. The consignee denied that allegation and stated that the damage had been caused by rain water that entered into the hold due to the improper closure of the hatches and because of the improper stowage of the cargo.

  Held, by the Court of Appeals of Tokyo, that:

  (1) The excepted peril under Art. 4(2)(m) cannot be invoked to the extent that the damage to a cargo of fish meal has been caused by rain entered into the hold due to the hatch cover having not been properly closed.

* A summary of this judgment has been kindly supplied by Prof. Souichirou Kozuka of the Sophia University, Tokio - s-kozuka@hoffman.cc.sophia.ac.jp

Scotland

Albacora S.r.l. v. Westcott & Laurence Line Limited (Inner House, Court of Session, Edinburgh, 23 March 1965 (reported 1965 S.L.T. 270) *

  Following a voyage from Glasgow (Scotland) to Genoa (Italy) a cargo of fish shipped on board the m.v. Maltasian was found to be damaged.  The bills of lading provided that the liability of the carrier would be determined by the Hague Rules contained in the 1924 Convention on Bills of Lading.

  The damage was caused by bacteria within the fish cargo.  The bacteria, although present while the fish were alive, multiplied when temperature in the holds increased.  The issue arose as to whether the cargo had been properly and carefully carried by the vessel in terms of Article 3 of the Convention; and whether the carrier might benefit from the exception contained in Article 4 of the Convention as “damage arising from inherent defect, quality or vice of the goods”.

  Held, by the Court of Session (Inner House), that:

  (1)  The damage to cargo was caused by ‘inherent vice’ within the meaning of the 1924 Convention; the Defenders were not negligent in the carriage, and accordingly were not liable to the shipper for any losses sustained.

* The synopsis of this decision has been kindly prepared by Ed Watt, LLB (Hons) LLM, Solicitor, Henderson Boyd Jackson W.S., 19 Ainslie Place, Edinburgh EH3 6AU, UK. Fax +44 131 225.2086 – E-mail: e.watt@HBJ.co.uk – Internet: www.shippinglawyer.com

EXCEPTED PERILS - LATENT DEFECTS (Art. 4.2(p))

Italy

Corte d’Appello of Genoa 28 December 1998, Hori Maschinen und Anlagen GmbH v. Tarros S.p.A.–The “Vis” (2000 Dir. Mar. 538)

  A consigment of potatoes, loaded at Tripoli, Lybia on the m/v Vis of Tarros S.p.A., arrived to La Spezia, Italy in damaged conditions owing to the excessive duration of the voyage caused by the breakdown of the vessel’s engine. The consignees, Hori Machinen und Anlagen GmbH, sued Tarros before the Tribunal of Genoa claiming damages. The judgment of the Tribunal, allowing a very small amount to the claimant, was appealed both by the claimant and by the carrier who alleged that the engine breakdown was due to a latent defect.

  Held, by the Corte d’Appello of Genoa, that:

  (1) Failing the proof that before sailing it has carried out all necessary checks in respect of the conditions of the engine, the carrier cannot invoke, in order to exonerate himself from liability, the possibility that the damage occurred after the commencement of the voyage was due to a latent defect.

 

EXCEPTED PERILS – PERILS OF THE SEA (Art. 4. 2(c))

Australia

Great China Metal Industries Co. Ltd. v. Malaysian International Shipping Corp.–The “Bunga Seroja” (High Court, 22 October 1998, 1999 AMC 427):

  A consignment of 40 cases of aluminium can body in coils loaded in Sydney on board the m/v Bunga Seroja was partly damaged during the passage from Sydney to Keelung, Taiwan on account of heavy weather. Great China Metal Industries Co. Ltd., to which the property in the goods had passed, claimed damages from the carrier, Malaysian International Shipping Corp. but the claim was rejected by the trial Judge whose decision was affirmed by the New South Wales Court of Appeal. The claimant appealed to the High Court of Australia contending that the exception of perils of the sea did not apply because damage to the cargo resulted from sea weather conditions which could reasonably be foreseen and guarded against. The question to which the submission primarily was directed was the meaning and effect of art. 4 r. 2(c) of the Hague Rules.

  Held, by the High Court of Australia, that:

  (1) The perils of the sea exception cannot be limited to those events which are beyond the ordinary experience of mariners or that are wholly unforeseen or unpredicted.

France

Cour d'Appel of Aix-en-Provence 14 May 2004, Compagnie Marocaine de Navigation v. Comitran, Office de Commercialisation et d'Exportation and Covea Fleet - The "Al Hoceima" (2005 DMF 322)

In March 1987 the Moroccan company Office de Commercialisation et d'Exportation-OCE loaded at Tangiers on board the Al Hoceima, of Compagnie Marocaine de Navigation-COMANAV 47 trailers with its merchandise. The trailers were owned by Rentco France and had been let by Rentco to OCE.
The trailer were loaded on board and secured by the stevedoring company COMANAV.
The vessel sailed from Tangiers on 27 March 1987 and, having met bad weather, with wind force 8 and 9 of the Beaufort Scale, was compelled to seek refuge in the roads of Vinaroz, where the crew carried out a general control of the conditions of the vessel and its cargo. After having found that everything was in order and that the weather appeared to have improved, the master sailed off the place of refuge but during the night the weather considerably worsened with wind force 9-10 of the Beaufort Scale. While the master was trying to alter course and seek again shelter in the bay of Rosas, the vessel took a lift of 30°. Since the lift increased even further, the crew abandoned the vessel that soon after sunk.
The insurer of the trailers, La Neuchateloise, after having settled the claim of Rentco for the loss of all its trailers, brought proceedings against COMANAV and OCE in the Tribunal de Commerce of Perpignan. Subsequently Covea Fleet, to whom La Neuchateloise had assigned its claim, joined the proceedings.
With judgment of 26 July 1994 the Tribunal de Commerce of Perpignan found the carrier COMANAV and COMITRAN jointly liable, the former in the proportion of 75% and the latter in the proportion of 25%. On appeal by COMITRAN the Cour d'Appel of Montpellier held that COMANAV only was liable for the loss of the trailers. The decision of the Cour d'Appel was quashed by the Cour de Cassation and the case was remanded to the Cour d'Appel of Aix-en-Provence.

Held, by the Cour d'Appel of Aix-en-Provence, that:

[1] The master of a vessel who, after having sought shelter in a roadstead on account of the adverse weather conditions, sails out of the shelter notwithstanding the adverse weather conditions, with the consequent loss of the vessel commits a nautical fault for which the carrier is not liable under article 27(b) and (d) of law 18 June 1966.*

--
* In law 18 June 1966 enacted in French domestic law reference is made to the nautical faults of the master, pilot or other servants of the carrier; in article 27(d) reference is made to events not imputable to the carrier.

United States

Steel Coils, Inc. v. M/v “Lake Marion”, et Al., United States District Court, Eastern District of Louisiana, November 23, 2001 (2002 AMC 1680)

Western Bulk voyage chartered the Lake Marion to Itochu International or its guaranteed nominee. The parties used a standard GENCON form with a typewritten “rider”. Under Clause 2, the owner warranted that the vessel would be seaworthy and equipped to carry the cargo. Clause 31 of the rider incorporated a number of standard shipping terms into the charter party as if written in extenso. In particular, Clause 31 incorporated the USA Paramount Clause.
Hot-rolled coils, cold-rolled coils, and galvanized coils were loaded into the vessel at the load ports in Riga and Ventspils, Latvia.
The vessel departed from Ventspils on March 7, 1997 and arrived at its first stop, Camden, New Jersey, on March 28, 1997. During the voyage, the vessel encountered rough weather. The vessel’s logs reported that the worst weather that the vessel encountered was wind that reached Beaufort Scale Force of 11-12 for about one hour on March 26. Captain Musial testified that he was aware that he might encounter Force 12 winds in the North Atlantic during the late winter. During the rest of the voyage, the vessel did not encounter winds exceeding Beaufort Scale 10, and most readings were below Beaufort Scale 9. Although Captain Musial filed a Note of Protest at the first port of call, he did not claim any structural damage to the ship as a result of the weather that the vessel had encountered during the voyage.
At the first discharge port, Camden, the vessel discharged cold-rolled coils from holds No. 1, 2, 4, and 7. Attending surveyors reported evidence of seawater entry into all of these holds. Another report at Camden criticized the vessel’s condition and noted specific deficiencies in each of the seven hatch covers and hatch cover closing fixtures.
The vessel then travelled to New Orleans, where she discharged hot-rolled coils, cold-rolled coils, and galvanized coils from holds No. 1, 2, 3, 4, 6, and 7. Captain Rasaretnam, the cargo surveyor in attendance, reported that the vessel’s hatch covers were in “apparent non-watertight condition, with signs of leakage and/or water ingress into all holds”. The survey indicated positive silver nitrate reactions on the cargo in the stow of holds 1, 3, 4, 6, and 7, which confirmed that seawater had entered the holds. In New Orleans, the No. 1 hold of the vessel flooded up to 16 inches as a result of a crack in the plating that separated the No. 1 hold from the port wing ballast tank. Rasaretnam observed the flooding and inspected the crack. He believed that the crack was an extension of an old crack over which a doubler plate had been welded.

Held, by the U.S. District Court, Eastern District of Louisiana, that:

(1) The peril of the sea defence is not applicable when the winds and waves encountered by the vessel (wind up to Beaufort Scale 11-12) were foreseeable in the North Atlantic during the late winter months and no damage to the vessel resulted from the voyage.

Steel Coils, Inc. v. M/v "Lake Marion", in rem; Lake Marion, Inc. and Bay Ocean Management, Inc., in personam - v. Western Bulk Carriers K/S Oslo - v. Itochu International, Inc. United States Court of Appeals for the Fifth Circuit, May 13, 2003 (2003 AMC 1408)

The vessel interests appealed from the judgment of the US District Court and Steel Coils and Western Bulk cross-appealed.

Held, by the U.S. Court of Appeals for the Fifth Circuit, that:

(1) The wind velocity and the time during which a given velocity prevailed as well as the nature and extent of damage to the ship itself are of great importance in determining whether a storm constitutes a peril of the sea.

EXCEPTED PERILS - SEAWORTHINESS AS AN “OVERRIDING OBLIGATION” (Art. 4. 2)

England

Paper Traders Co. Ltd. and Others v. Hyundai Merchant Marine Co. Ltd. and Another - The "Eurasian Dream" (2002) 1 Lloyd's Rep. 719.

On July 23, 1998, a fire started on deck 4 of the pure car carrier Eurasian Dream while in port at Sharjah. The fire, which was not contained or extinguished by the master and crew, eventually destroyed or damaged the vessel’s cargo of new and second-hand vehicles and rendered the vessel itself a constructive total loss.
The relevant cargo interests commenced proceedings in London against the carrier before the Queen’s Bench Division (Commercial Court).

Held, by the Queen’s Bench Division (Commercial Court), that:

(1) The exceptions under art. 4, r. 2, may not be relied upon where the carrier is in breach of the “overriding obligation” to provide a seaworthy ship under art. 3, r. 1 and that breach is causative of the loss/damage.

EXCEPTED PERILS – WHEN MAY BE INVOKED (art.4(2))

France

Cour de Cassation 3 May 2006, IMTC v. Weisrock (2006 DMF 49)

On request of Robert Weisrock Co., a forwarding agent (Comti) agreed to carry from Saulcy-sur-Meurthe (France) to Rabat (Morocco) two trailers loaded with wood beams and Comti subcontracted the carriage by sea to IMTC. During the carriage by sea the beams loaded on one of the trailers became loose and were damaged.  The damaged beams beams were rejected by the consignee and carried back to France where Robert Weisrock Co. took care of the necessary repairs and subsequently brought an action against Comti and IMTC in the Tribunal de Commerce of Marseille, claiming the cost of transportation back to France and the cost of repairs. By judgment of 3 November 2000 the Tribunal de Commerce allowed the claim on the ground that the remark made by the carrier on the manner in which the stowage of the beams on the trailer had been made by the shipper had not been endorsed on the bill of lading. The decision of the Tribunal de Commerce was affirmed by the Court of Appeal of Aix-en-Provence with judgment dated 23 September 2004. Weisrock appealed to the Cour de Cassation.

  Held, by the Cour de Cassation, that:

  [1]  The failure by the carrier to insert a qualifying clause in the bill of lading does not prevent the carrier from proving that the damage to the cargo was caused by one of the excepted perils enumerated in article 4(2) of the Hague-Visby Rules.

 

FREEDOM OF CONTRACT (art. 7)

France

Cour de Cassation (Ch.Com.) 22 May 2007, CMA-CGM Antilles-Guyane v. Axa Corporate Solutions Assurance and Others (2007 DMF 811)

  A refrigerated container with foodstuff was shipped on board the "Fort Fleur d'Epée"at Le Havre for transportation to Pointe-à-Pitre. Delivery was agreed to take place alongside. On arrival at destination the carrier after giving notice of arrival to the consignee unloaded the container and left it on the quay. The consignee having been unable to collect the container, the foodstuff deteriorated due to the lack of supply of electricity to the container. The insurers after having settled the claim of the consignee, brought proceedings against the carrier in the Tribunal de Commerce of Le Havre. The judgment of the Tribunal de Commerce whereby the carried was held liable for the loss of the goods was affirmed by the Cour d'Appel of Paris on the ground that it was the duty of the carrier to make sure that the consignee was in a position to take delivery of the container alongside the ship. The carrier appealed to the Cour de Cassation stating that the decision of the Court of Appeal was in breach of article 7 of the Hague-Visby Rules, since the clause alongside exonerated the carrier from any liability for loss of or damage to or in connection with the custody and care of the goods subsequent to their discharge from the ship.

  Held, by the Cour de Cassation, that:

  [1]  Where the delivery of the goods at destination has been agreed alongside delivery is not deemed to have taken place if the carrier after having giving notice of arrival of the goods to the consignee does not prove that the consignee would have been in a position to collect the goods.

http://www.comitemaritime.org/jurisp/ju_billading.html

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