SEAWORTHINESS AND DUE DILIGENCE IN PASSAGE PLANNING - 2019

Seaworthiness and due diligence in passage planning

Introduction

On 8 March, in Alize 1954 and CMA CGM SA v Allianz Elementar (the "CMA CGM LIBRA")[2019] EWHC 481 (Admlty), the UK High Court decided, for the first time in English law, that:

(a)  a vessel with a materially defective passage plan is unseaworthy; and

(b)  that can be for lack of due diligence.

Though maintaining focus on systems, preparation and pre voyage activity, it is submitted that this decision goes further than, for instance, liability for failure to update charts.

The Hague/Hague-Visby Rules

The case concerned Article III rule 1 i.e. before and at the beginning of the voyage:

"The carrier [must] ... exercise due diligence to:

(a)  make the ship seaworthy"

and also one of the best-known Article IV rule 2 defences:

"Act, neglect, or default ... in the navigation or ... management of the ship"

Facts

Soon after sailing, this container ship grounded on an uncharted shoal. Some of the cargo interests defended the resulting salvage and GA claim, and the main issue concerned the passage plan.

Fault

Departing from that, the Master had navigated outside the buoyed fairway. The trial judge held that that was negligent, as it relied on uncertain depths.

But negligent navigation offers the carrier a defence, under Article IV rule 2 (a), as above, so the cargo interests had to show that the vessel was unseaworthy for lack of due diligence.

Burden of proof

About three months before, the UK case of Volcafe v CSAV [2018] UKSC 61 concerned wet damage to containerised coffee beans, and the key evidential point was the unknown thickness of the protective kraft paper.

Finding against the carrier, the Supreme Court ruled that:

1.  where sound cargo outturned with loss or damage, the carrier was liable under Article III rule 2 (i.e. "Subject to ... Article IV, [he must suitably] load, handle, stow, carry, [and look after, etc the cargo]";

unless he could prove that what happened was not due to breach of the obligation to take good enough care of the cargo; and

2.  to use an Article IV rule 2 exception, as well as proving that it applies, the carrier must show that no fault on his part caused the damage.

The claimants here argued that this also meant that the carrier had to show that there had been no breach of Article III rule 1, i.e. by first proving that thevessel was seaworthy, but the judge rejected that. Volcafe concerned Article III rule 2. As regards Article III rule 1 "the conventional view as to the burden of proof remains good law."

Passage planning

A Notice to Mariners had been issued about 6 months before the grounding. This highlighted "numerous depths less than [those] charted ... [near] the [relevant] approaches ... ". It was simply mentioned, by reference number, in the passage plan, but the relevant warning was not.

The judge found that it should have been. It was no good just annotating, with aserial number - navigators needed to be made aware of the danger posed by nearby depths being less than those given on the charts. The passage plan should have spelt that out.

Unseaworthiness

That made the vessel unseaworthy. A prudent owner who knew of this defect would have required it to be corrected before sailing.

Causation

The unseaworthiness also had to have caused the grounding.

The issue here was whether the passage plan had caused the Master's negligence indeparting from the buoyed fairway.

That depended on whether he had the Notice, and its warning, in mind at that time.

The judge found that he had not, so the passage plan caused the (negligent) navigation decision - and hence the grounding.

Lack of due diligence

Tasks are delegable, but the carrier's obligation is not. It is, so to speak, personal.

The carrier is responsible for the fault of those to whom he delegates, and this case was like several that have established lack of due diligence because of pre voyage failings of the Master, Chief Engineer or other officers and crew.

Passage planning was not just part of navigation, so as to make it something for which responsibility was confined to the crew. It was an obligation of the carrier, and a suitable passage plan should have been prepared.

Commentary

As well as establishing potential exposure for inadequate passage planning, this decision shows how, by examination of the evidence on each link, the courts can establish the liability chain, tracing the path among negligent navigation, unseaworthiness, causation and due diligence.

Carriers will want to review their passage planning, taking into account current procedures and practices - including of course their SMS - use of ECDIS, all relevant SOLAS requirements and IMO and other industry advice, also perhaps seeking appropriate guidance in view of what is plainly a significant development.

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If you would like to discuss anything raised in this article please contact Chris Potts on +(852) 9461 4377 or at chris.potts@crumpslaw.com or Peter Lau on +(852) 9683 7439 or at peter.lau@crumpslaw.com.