Jurisprudence on Interpretation of Hague-Visby Rules: Excepted Perils

United StatesAnvil 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

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) EnglandPapera 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

ScotlandAlbacora 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

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

Staff Author

UK P&I

Date30/09/2010