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. Berhad 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. IV r. 2(c) of the Hague Rules.
Held, by the High Court of Australia, that:
(1) Seaworthiness must be judged having regard to the conditions the vessel will encounter. The standard of fitness rises with improved knowledge of shipbuilding and navigation. In Art. 3 r. 1 the term “seaworthiness” should be given its common law meaning; nothing in the Rules generally or in the travaux préparatoires suggests otherwise.
Papera Traders Co. Ltd. and Others v. Hyundai Merchant Marine Co. Ltd. and Another – The “Eurasian Dream”  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) Seaworthiness is not an absolute concept; it is relative to the nature of the ship, to the particular voyage and even to the particular stage of the voyage on which the ship is engaged and must be judged by the standards and practices of the industry at the relevant time, at least so long as those standards and practices are reasonable.
(2) The components of the duty (as illustrated by the case law) are as follows:
(a) The vessel must be in a suitable condition and suitably manned and equipped to meet the ordinary perils likely to be encountered while performing the services required of it. This aspect of the duty relates to the following matters:
(i) The physical condition of the vessel and its equipment;
(ii) The competence/efficiency of the master and crew;
(iii) The adequacy of stores and documentation.
(b) The vessel must be cargoworthy in the sense that it is in a fit state to receive the specified cargo.
(3) Incompetence or inefficiency of the master and crew may consist of a “disabling want of skill” or a “disabling want of knowledge”.
(4) Incompetence is to be distinguished from negligence and may derive from:
a) an inherent lack of ability;
(b) a lack of adequate training or instruction: e.g. lack of adequate fire-fighting training;
(c) a lack of knowledge about a particular vessel and/or its systems;
(d) a disinclination to perform the job properly;
(e) physical or mental disability or incapacity (e.g. drunkenness, illness). </dd></dl>
(5) The test as to whether the incompetence or inefficiency of the master and crew has rendered the vessel unseaworthy is as follows: Would a reasonably prudent owner, knowing the relevant facts, have allowed this vessel to put to sea with this master and crew, with their state of knowledge, training and instruction?
(6) The duty of “due diligence” is an “inescapable personal obligation”: it is non-delegable. The carrier will therefore be responsible for negligence of those to whom it delegates due diligence. The question is whether unseaworthiness is due to any lack of diligence in those who have been implicated by the carrier in the work of keeping or making the vessel seaworthy. Such persons are the carriers’ agents whose diligence or lack of it is attributable to the carrier. This principle is relevant in two respects: (1) the carrier under the bills of lading is liable for the want of due diligence by the owners or managers; (2) the carrier is liable for the want of due diligence of the master insofar as the carrier or the owners or managers have delegated to him their duties as to seaworthiness.
Cour d’Appel of Versailles 20 December 2001, S.A. CGM Antilles Guyane v. Les Mutuelles du Mans Assurances IARD and Others – The “Fort Fleur d’Epée” (2002 DMF 251)
Various refrigerated containers were loaded on the m.v. Fort Fleur d’Epée of CGM Antille Guyane at Havre and Montoir. During loading operations at Montoir the officer in charge ordered the filling of ballast tank no. 8 in order to prevent a list of the ship and seawater entered into the hold through a port hole improperly closed, flooding the containers. Upon arrival of the ship at destination it was found that the poultry loaded in the containers was lost. The cargo insurers commenced proceedings against the carrier before the Tribunal de Commerce of Nanterre which by judgment of 13 October 1998 allowed their claim. The carrier appealed against such judgment to the Cour d’Appel of Versailles alleging that the loss had been caused by a fault in the management of the ship.
Held, by the Cour d’Appel of Versailles, that:
(1) The carrier is exonerated from liability for loss of or damage to the goods due to the unseaworthiness of the vessel only if it proves that it has complied with the obligations set out in article 21 of law 18 June 1966, namely that it has put the vessel in the condition to perform the service it has undertaken to do, account being taken of the voyage the vessel must carry out and of the goods to be carried.
(2) Nautical fault includes, in addition to the fault in the navigation, the fault in the management of the vessel that adversely affect the safety of the vessel and of the maritime adventure; while a fault that endangers the cargo is a commercial fault for which the carrier is responsible. A ballasting operation carried out during loading that, owing to a defective closing of an inspection port, causes the flooding of containers stowed in the hold is not a nautical fault
Tokyo Kôtô Saibansho (Court of Appeals of Tokyo) 14 September 2000, Taiwan Fire and Marine Insurance Co. Ltd. v. Unison Navigation Corp. (Kôtô Saibansho Minji Hanreishu vol.53, no.2, p.124) *
The ship that had carried Malaysian lumber from Miri, Malaysia, to Su-ao, Taiwan, took a heavy list on her port side before unloading due to leakage caused by a crack in her port bow. All the lumber fell into the sea and was totally damaged by the oil spilt from the ship. The cargo insurer sued the carrier, alleging that the carrier had breached his duty to make the ship seaworthy. During the proceedings it appeared that the ship, fifteen years old, had had her starboard bow repaired one month before the accident at issue, after a leakage due to another crack.
Held, by the Court of Appeals of Tokyo, that:
(1) The carrier has not exercised due diligence to make the ship seaworthy when, after a leakage in the port side had occurred and it was found that such leakage was due to a crack in the plate it failed to cause the starboard side to be inspected and the cargo was severely damaged as a consequence of a further crack in the hull.
* Summary prepared by by Prof. Souichirou Kozuka, Sophia University, Tokyo.