Alize 1954 and another vs. Allianz Elementar Versicherungs AG and others - (10 Nov 2021)

Defective passage plan requires a want of due diligence to make the vessel seaworthy

Civil

Present appeal concerns the scope of a shipowner’s obligation to exercise due diligence to make a vessel seaworthy. The seaworthiness obligation is fundamental to all contracts of carriage of goods by sea. At common law, the carrier was under an absolute obligation to provide a seaworthy vessel. The present case concerns the seaworthiness obligation imposed by Article III Rule 1 of the Hague Rules, a 1924 international convention for the unification of rules of law relating to bills of lading.

The main issue raised on the appeal is whether, as the Appellants contend, the carrier’s obligation under the Hague Rules is subject to a category-based distinction between a vessel’s quality of seaworthiness or navigability and the crew’s act of navigating. It is the Appellants’ case that so long as the carrier has equipped the vessel with all that is necessary for her to be safely navigated, including a competent crew, then the crew’s failure to navigate the vessel safely is not a lack of due diligence by the carrier.

The factual context in which these issues arise is the grounding of the appellants’ container vessel CMA CGM LIBRA on leaving the port of Xiamen, China, on a voyage to Hong Kong. The Admiralty Judge, found that the vessel’s defective passage plan was causative of the grounding and that this involved a breach of the carrier’s seaworthiness obligation under Article III Rule 1 of the Hague Rules. His decision was upheld by the Court of Appeal. The appellants (“the owners”) contend that, the decisions of the Courts below were wrong, that the vessel was not unseaworthy and/or due diligence was exercised, and that any negligence in passage planning was a navigational fault which is exempted under Article IV rule 2(a) of the Hague Rules.

The carrier’s obligation under the Hague Rules is not subject to a category-based distinction between a vessel’s quality of seaworthiness or navigability and the crew’s act of navigating. The crew’s failure to navigate the ship safely is capable of constituting a lack of due diligence by the carrier. It makes no difference that the delegated task of making the vessel seaworthy involves navigation.

On the proper interpretation of the Hague Rules, the Article IV Rule 2 exception of act, neglect or default in the navigation or management of the vessel cannot be relied upon in relation to a causative breach of the carrier’s obligation to exercise due diligence to make the vessel seaworthy. If the vessel is unseaworthy, it makes no difference whether negligent navigation or management is the cause of the unseaworthiness or is itself the unseaworthiness.

The fact that the defective passage plan involves neglect or default in “the navigation of the ship” within the Article IV Rule 2(a) exception is no defence to a claim for loss or damage caused by unseaworthiness. The obligation on the carrier to exercise due diligence to make the vessel seaworthy requires that due diligence be exercised in the work of making the vessel seaworthy, regardless of who is engaged to carry out that task. The carrier may not be liable for lack of due diligence which occurs before he has responsibility for the vessel or for lack of due diligence which occurs before he has responsibility for the cargo. The carrier may nevertheless be liable if the defect or danger would be reasonably discoverable by the exercise of due diligence once the vessel or cargo has come within his control.

The carrier is liable for a failure to exercise due diligence by the master and deck officers of his vessel in the preparation of a passage plan for the vessel’s voyage. The fact that navigation is the responsibility of the master and involves the exercise by the master and deck officers of their specialist skill and judgment makes no difference. The defective passage plan involved a want of due diligence to make the vessel seaworthy. Appeal dismissed.

Tags : DUE DILIGENCE SEAWORTHINESS OBLIGATION