QCR Autumn 2017: When alleging unseaworthiness, the party making the allegation must be able to show some foundation for the allegation.

Cosco Bulk Carrier Co Ltd v Tianjin General Nice Coke and Chemicals Co Ltd and Another (The "Jia Li Hai") - QBD (Comm Ct) (Robin Knowles J) [2017] EWHC 2509 (Comm) - 27 July 2017

Facts

The claimant's vessel was involved in a collision off China in December 2013. To preserve the claimant's vessel and cargo, general average was declared. 

The first defendant, cargo owners, signed an average bond to secure the release of the cargo. This was issued together with an average guarantee from the second defendant, the cargo insurer.

The claimant claimed on the guarantee. In response, the cargo insurer launched a counterclaim and defence, relying on a report into the collision prepared by the Ningbo Maritime Safety Administration, the relevant safety investigator in the case. The cargo insurer's defence and counterclaim alleged that the vessel was unseaworthy because it had no or no adequate systems in place in relation to passage planning and/or bridge management, it had no or no adequate safety management system, and it had no or no adequate system in place for the implementation, recording and/or auditing of any safety management system. The cargo insurer said that had adequate systems been in place and been implemented the collision would not have occurred.

Judgement

The court held that for a vessel to be seaworthy, its equipment and systems had to be reasonably fit to withstand the perils which might foreseeably be encountered on the voyage, and to keep the cargo reasonably safe from those perils. The burden of proving unseaworthiness rested on the party which asserted it and the party intending to rely on unseaworthiness had to plead it with sufficient particularity.

The cargo insurer did not seek documentation from the claimant before making the allegations in its defence and counterclaim. The claimant had, in the course of preparation for the hearing provided some documents that included copy safety management certificates and extracts from its safety management manuals. The cargo insurer invited the Court to draw an inference against the claimant from the fact that the claimant had not provided further documentation. The Court declined to do so. 

The cargo insurer had available to it the fact of the collision and references to negligence and failure as referred to in the administration report.  It did not however follow that the vessel had no or no adequate or sufficient systems.

It was for the cargo insurer to show some foundation for the allegations it had pleaded in its defence. On the facts, whilst it could perhaps show that systems were breached on the occasion of the collision, it could not show that there were inadequate systems or inadequate arrangements for implementation of those systems.

Comments

This case serves as a reminder to Members of the importance of seeking adequate documents to support an allegation of unseaworthiness.  Such an allegation has to be pleaded with sufficient details.