Law Of The Carriage Of Goods By Sea (PART 16)

Pursuant to the earlier topic of Introduction to Maritime Law in Malaysia, published on 22 February 2021, in the coming series the basis and elements of Marine Insurance claims will be explored.

Hague-Visby Rules III – The Carrier’s Defences

1. ‘Due Diligence’ Defence Under Art. IV, r.1

   This is not a defence, strictly speaking, since if due diligence is shown, the primary duty of the carrier under Art. III, r.1 has been discharged. In general, we can only speculate as to why it was thought necessary to have this provision. It may perhaps have been included to remove any doubt that the burden of proof of due diligence lies on the carrier.
   Under the Rotterdam Rules, the ‘due diligence’ defence is also accepted (Art. 14). As will be recalled, under the Hamburg Rules, there is only one general exception that carriers can rely on in a cargo claim against cargo interests (Art. 5).

2. Deviation Under Art. IV, r.4

   A number of questions arise on this apparently straightforward provision. It clearly extends the scope of justified deviation, by comparison with the common law, by including saving or attempting to save property and any reasonable deviation. In Renton v Palmyra, the House of Lords, approving Pyrene v Scindia, held that it is for the parties to define the contractual voyage, and the substitution under the terms of the contract of Hamburg as the port of discharge because of strikes at the original English ports was not a deviation.
   Stag Line v Foscolo, Mango & Co Ltd settled that reasonableness is a question of fact to be judged in the light of all the circumstances. To satisfy Art. IV, r.4 the deviation must be reasonable in relation to both parties to the contract.
   i. Consequences Of Unjustified Deviation
   It remains unclear, however, what the consequences of an unjustified deviation are. Stag Line v Foscolo, Mango & Co Ltd is authority that a carrier who has deviated without justification will not then be able to rely on the perils of the sea defence in Art. IV, r.2(c). Presumably, the same would be true of the rest of Art. IV, r.2.Can a carrier who has unjustifiably deviated still rely on the financial limitation of liability contained in Art. IV, r.5? Following the decisions in The Happy Ranger and The Kapitan Petko Voivoda, where the financial limitation was held to apply to breach of the seaworthiness obligation and to unauthorised deck carriage respectively, it would seem difficult to argue that a carrier who had deviated lost the protection of Art. IV, r.5.Similar arguments apply regarding the time limit for claims under Art. III, r.6 (The Antares).Unlike the Hague and Hague-Visby Rules, the Hamburg Rules do not expressly talk of deviation, although Art. 5(6) provides that:The carrier is not liable, except in general average, where loss, damage or delay in delivery resulted from measures to save life or from reasonable measures to save property at sea.The Rotterdam Rules choose a different path from those taken in the previous conventions. The question of whether deviation constitutes breach of a carrier’s obligation is entirely left to national law. Article 24, which is the main provision on deviation, merely states what consequence does not flow from deviation: deviation is not of itself sufficient to deprive carriers and any of the persons defined in Art. 18 of
   any defence or limitation provided in the rules, even if the loss, damage
   or delay resulted from unjustified deviation.However, Art. 24 further states that this is applicable to the extent provided in Art. 61: the carrier will not be entitled to rely on the limitations provided in Arts. 59 and 60, where loss of, damage to or delay in delivery of the goods resulted from its own personal act or omission. Even in such cases, carriers will be entitled to rely on the time bar under Art. 62 of the Rotterdam Rules. See Art. 17 of the Rotterdam Rules, as it is also related to deviation.

3. General Defences Under Art. IV, r.2

   The defences listed in Art. IV, r.2 are open to a carrier who is in breach of any duty specified in Art. III, r.2, since Art. III, r.2 is expressly made subject to Art. IV. They do not apply to breaches of the seaworthiness obligation in Art. III, r.1 (Maxine Footwear v Canadian Govt Merchant Marine).You will need to look more closely at paragraphs (a), (b), (p) and (q) only, since the remainder are self-evident, assuming that they have the same meaning as at common law.
   Paragraph (a) stands out from the rest because it:

   1. covers act, neglect or default of the master or crew
   2. protects the carrier against claims in respect of loss or damage resulting either from negligent navigation or from negligent ‘management’ of the ship.

   In the leading case of Gosse Millerd v Canadian Govt Merchant Marine, ‘management’ was defined as acts relating to the ship herself and only incidentally damaging the cargo, as opposed to acts dealing solely with the goods and not directly or indirectly with the ship herself. Thus, failure to replace tarpaulins to prevent rainwater entering the holds was not management of the ship (Gosse Millerd) but pumping water into a ballast tank to stiffen the ship, unaware that a broken pipe was letting water into the cargo, was (The Glenochil). For a recent illustration of the distinction, see The Aconcagua. There, excessive heating of bunkers caused an explosion in a container of chemicals that had been (wrongly) stowed next to the bunker tank; some heating of the bunker oil was required to facilitate its transfer from the tank to the engine room and was accordingly done as part of the running of the ship, and did not relate to the care of the cargo.

   In The Privocean, the court was asked to decide whether the master’s negligence in failing to identify a stowage plan was related to the management of the ship. The court held that: The test of whether negligence was in the management of the cargo or the management of the vessel involved an examination of the primary nature and object of the acts which caused the loss, and asking whether the act or default which caused loss or damage constituted want of care of cargo or want of care of the vessel indirectly affecting the cargo.

   Consequently, the negligence was considered to be related to the management of the ship.

   Paragraph (b) relieves the carrier of liability for loss or damage resulting from fire, unless caused by the actual fault or privity of the carrier. Actual fault or privity refers to the personal fault of the directing mind or alter ego of the carrier. The carrier will be protected if the cause of the fire was merely a negligent act by one of the officers or crew, unless the outbreak of fire renders the ship unseaworthy. Regarding the meaning of ‘fire’, see the decision in The Lady M. There ‘fire’ should be understood to mean fire however caused, including in particular fires deliberately or negligently started by servants or agents of the carrier, provided that the fire was not caused with the privity of the owners.

   The remaining paragraphs of Art. IV, r.2 cover situations in which loss or damage results without fault or neglect on the part of the carrier or the carrier’s servants.

   Only the scope of paragraph (p) is uncertain: it was considered inconclusively in The Antigoni.

   Paragraph (q) was held to provide a defence when the theft by a stevedore of a storm valve cover plate allowed seawater to enter the hold and damage the cargo (Leesh River Tea) – but why was the stevedore not the owner’s agent?

   Regarding the scope of paragraph (q), see the recent decision in The Lady M, the court held that an owner would not be exempt from liability for fire under paragraph (q), where a chief engineer deliberately started a fire on board a vessel. However paragraph (b) would be capable of exempting the carrier from liability.

   As will be recalled, the Hamburg Rules do not provide a catalogue of exceptions. There is only a general exceptions clause contained in Art. 5 of these rules. The Rotterdam Rules combine the approaches taken by the Hamburg Rules and the Hague-Visby Rules, by providing both a catalogue of exceptions and a general exclusion clause (Art. 17 of the Rotterdam Rules).

4. Art. IV And Shipment Of Dangerous Goods

   Article IV, r.6 provides that the shipper of dangerous goods is liable for all resulting damage or expenses where the carrier has not consented to the shipment with knowledge of its dangerous character. (Dangerous has the same meaning as at common law)This applies even where the shipper is ignorant of the dangerous nature of the goods. In The Giannis NK, the House of Lords held that in such a case the general provision of Art. IV, r.3 – that shippers shall not be liable without fault – is displaced by the special provision of Art. IV, r.6 in the case of dangerous goods. (The speech of Lord Steyn gives a valuable insight into the use of travaux préparatoires and comparative materials in interpreting the Rules.)Under Art. IV, r.6, goods that only cause delay to the carrier are not treated as dangerous. However, where the carriage or discharge of a specific cargo constitutes ‘violation of or non-compliance with some municipal law’ that specific cargo may be considered as dangerous (The Darya Radhe).The shipper will not, however, be liable if the carrier has failed to use due diligence to provide a seaworthy ship, as by failing to remove residues of previous cargoes from the tanks (The Fiona) or negligently loading containers of dangerous chemicals in an inadequately ventilated hold (The Kapitan Sakharov).

   In Art. 13 of the Hamburg Rules, it is expressly stated that the shipper’s duty is to inform the carrier of the dangerous nature of goods of which the carrier ought not reasonably to be aware. By comparison, under the Hague and Hague-Visby Rules this strict duty is inferred. Under the Hamburg Rules, the consequences arising from the shipper’s failure to comply with this duty are very similar to those in the Hague and Hague-Visby Rules. Unlike the other conventions, the Rotterdam Rules give a description of ‘dangerous goods’: goods which by their nature or character are, or reasonably appear likely to become, a danger to persons, property or to the environment. The reference to environment is also a novelty. Similar to Art. 13 of the Hamburg Rules, Art. 32 of the Rotterdam Rules, which deals with dangerous goods, also expressly imposes on the shipper a strict duty.

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This article is written by our Principal Associate, Chakaravarthi