CARRIERS DUTIES IN CARRIAGE OF GOODS BY SEA: ESTABLISHED SITUATION

AND DEVELOPMENTS IN CONTEMPORARY M ARITIME LAW

_____________________________________________________________
Leiden University, LL.M in International Business Law Thesis
by Zbigniew Jan Krger

Supervised by Dr. R. Dragneva

Leiden, August 2005

University of Leiden Faculty of Law

LL.M. in International Business Law

DECLARATION FORM

August 12th 2005

I further certify that this is an original work, that this thesis does not contain any
materials from other sources unless, these sources have been clearly identified in
footnotes and any and all quotations have been properly marked as such and full
attribution made to the author(s) thereof.
I further authorize Leiden University, the faculty of Law, the LL.M. Programme in
International Business Law, Its Programme Board and Director and/or any authorized
agents of the Institution, and persons named here in above, to place my thesis in a library
or other repository for the use of the visitors to or personnel of said library or other
repository. Access shall include but not limited to a hard copy or electronic media.
Zbigniew Jan Krger

TABLE OF CONTENT
INTRODUCTION.

CHAPTER I. DUTY TO PROVIDE A SEAWORTHY SHIP IN THE COMMON LAW

I.I.I. Physical condition of the vessel ..

I.I.II. Adequate equipment ...

I.I.III. Adequate bunkers...

I.I.IV. Cargoworthiness.

10

I.I.V. Proper Stowage ...

13

I.I.VI. Sufficient and competent crew...

16

I.I.VII. Adequate Documentation..

19

I.II. THE NATURE OF THE OBLIGATION IN THE COMMON LAW

21

I.II.I Doctrine of Stages

22

I.II.II Burden of proof and the importance of causal link.

27

CHAPTER II. CARRIERS DUTY TO PROVIDE SEAWORTHY SHIP IN THE HAGUE-VISBY

RULES.

31

CHAPTER III. DUTY TO CARRY THE GOODS WITHOUT DEVIATION...

42

III.I.I The Notion of deviation

42

III.I.II Justified Deviation..

46

III.I.III Liberty Clauses..

50

III.II. DUTY

NOT TO DEVIATE IN CONTRACTS RULED BY

THE HAGUE-VISBY

RULES.

51

CHAPTER IV. OTHER DUTIES OF THE CARRIER...

54

IV.I. Duty to take reasonable care of Goods.

54

IV.I.II. Carriers Defenses and immunities...

56

IV.II. Duty to proceed with due dispatch..

59

V. CONCLUSIONS...

60

BIBLIOGRAPHY

62

ABREVIATIONS. 63

INTRODUCTION
One might say that in the time of so called new economy, where welfare is
created more extensively by intangible goods commerce and services, the importance of
carriage of goods by sea should be decreasing. It would be difficult to find more out of
target

conclusion.

Technical

development

in

information

technology

and

telecommunication only contribute to the increase of international trade. This effect is

boosted by liberalization of trade and waiving trade barriers, both through regional
cooperation and organizations, such as NAFTA or European Union, and on the global
level, by the WTO agreements. Finally bustling economies of the eastern Asian countries,
in particular China, provide enormous supply of goods produced in those countries,
needed to be shipped around the world, on one hand and growing demand for
commodities and raw materials on the other. Geopolitical disturbances connected to oil
trade create necessity for looking towards new sources of oil supply, often from remote
regions, with a necessity of sea transport involvement. These factors combine to further
grow of maritime transport demand.
In this light one can appreciate the importance of the carriage of goods by
sea contract in the international context. Due to the risky nature of high sea voyages, also
the carriage of goods by sea involves high risk of potential harm to the vessel herself,
cargo, and in the least hazardous case to the economic purpose of the contract.
Another issue that raises practical difficulties is the variety and complexity of
legal regimes ruling carriage of goods by sea. The balance between the interests of carrier
and shipper had been switching throughout the years, initially in the common law and
than in the Hague-Visby Rules and respective national laws, implementing them. What
must be emphasized is the importance and influence of English law to the maritime law
interpretation and development in general. This thesis shall enlighten still existing vital
link between traditional common Law and contemporary maritime statutes. The modern
maritime conventions and statutes not only acquired basic legal concepts, but is still
influenced by traditional judicial reasoning of common law tradition of English courts
and arbitration bodies.
In following chapters the most important duties of the carrier shall be
examined and it will be shown that what on the face of the problem contradictory views

on the carriers duties and obligation in the Common Law and in the Hague- Visby Rules
are in fact closer than it seems, and certainly the imperfections in the statutory rules are
reinforced with the legal reasoning basing in the common law.

I. DUTY TO PROVIDE A SEAWORTHY SHIP IN THE COMMON LAW

Providing the seaworthy ship is one of the essential obligations of the carrier.
In fact, one may say that the seaworthiness is the most important characteristic of the
vessel prepared and made available for performing carriage of goods contract.
Unseaworthy vessel may be a cause of misperformance of the contract by the carrier,
possible damages to the charterer and subsequent rise of the liability. One can easily
enumerate number of threats to the proper performance of the contract caused by
unseaworthiness of the ship, ranging from the delay in the voyage, necessity of the
deviation for repairs, damage to the goods being carried, caused both by the condition of
the ship itself and deterioration of goods due to the longer journey, and finally business
implications of the late delivery of the goods caused directly or indirectly by the
unseaworthiness of the ship, such as commodities prices alterations and frustration of the
sales contract. In these circumstances it is clear that the ships seaworthiness will be
crucial feature of the vessels for the parties of the carriage of goods contract.
Importance of the vessels seaworthiness had been recognized both by the
common law, where it is an implied duty of the carrier to provide a seaworthy ship, and
international maritime treaties, namely Hague-Visby rules, where it is point out as the
primary duty of the carrier.
Although it is difficult to define comprehensively the term seaworthiness
one may say that it is a condition of the vessel that allows her to perform the sea voyage
undertaken by the carriage of goods by sea contract. In the case Kopitoff v. Wilson1 Court
held that the shipowner was, by the nature of the contract, impliedly and necessarily
held to warrant that the ship is good, and it is in condition that the ship is good, and is in
the condition to perform a voyage than about to be undertaken, or in the ordinary
language, is seaworthy, that is, fit to meet and undergo the perils of the sea and other
incidental risks to which she must of necessity be exposed in the course of the voyage

Kopitoff v. Wilson, (1867) 1 QBD 377 (QBD)

In Virginia Carolina Chemical Co. v. Norfolk and North American Steam

Shipping Co.2 Court stated that There was in every contract with regard to carriage of
goods by sea an absolute warranty that the carrying vessel must, at the time of sailing
with the goods, have that degree of fitness as regards both the safety of the ship and also
the save carriage of the cargo in the ship which an ordinary careful and prudent owner
would require his vessel to have at the commencement of the voyage, having regard to
the probable circumstances of that voyage and its nature
What was emphasized in both aforementioned cases is that seaworthiness was
the vessels capability to undertake particular, given voyage in performance of the
particular contract. Wording of the judgments such as the ship is good, and in the
condition to perform a voyage then about to be undertaken and to have at the
commencement of the voyage, having regard to the probable circumstances of that
voyage and its nature... It must noted though, that there is no any universal standard of
seaworthiness, and a vessel that might be regarded as a seaworthy for one voyage does
not necessarily that she would be fit for another voyage. The implied undertaking is that
the ship shall, when the voyage begins, be seaworthy for that particular voyage and for
the cargo carried.3 Once again, the Court emphasizes that there is no absolute standard
of seaworthiness and that it varies with every adventure.4
Another example of necessity of assessment the seaworthiness in respect of
particular voyage and its conditions is the situation of expected exceptional weather
circumstances. The standard of the seaworthiness must then be correspondingly higher.
In the Texas and Gulf SS. Co. v. Parker5 Court held that a vessel, though seaworthy for
ordinary weather, was unseaworthy since when leaving the port her master and manager
knew or should have known that the tropical hurricane was approaching which she was
not adopted to live out.6
In assessing the seaworthiness not only geographical factors of the voyage
must be taken into consideration, but nature of the cargo as well. Only those factors
22

Virginia Carolina Chemical Co. v. Norfolk and North American Steam Shippig Co. (1912) 1 KB 229
(CA)
3
Stanton v Richardson (1875) L.R. 9 C.P. 390
4
E.R.H. Ivamy, Carriage of Goods by Sea, 21, 13th ed. (1989)
5
Texas and Gulf SS. Co. v. Parker (1920) 263 Fed.Rep. 864
6
R.Colinvaux, Carvers Carriage by Sea 13ed, London 1982, 115

combined: nature of the voyage itself and the characteristics of the cargo allows proper
vessels seaworthiness assessment.

I.I.I. Physical condition of the vessel

The most striking example of the unseaworthiness is a situation when the ship
is physically defective and inadequate to sail. Once again it must be emphasized that
inadequacy to sail must be applied to particular contract and its business purpose. In
Stanton v. Richardson7 pumping equipment of the vessel could not sufficiently deal with
the surplus of the water in the cargo of sugar. The Court stated that the ship must have
been fit in design and structure and be suitably equipped to deal with the ordinary perils
of the contracted sea adventure.8 Once again The Court emphasizes that seaworthiness
refers to particular, contracted sea adventure. Moreover in this judgment it was
established that lack of damages to the vessel or no necessity for repairs is not enough to
presume seaworthiness of the ship. The Court pointed to the requirements of the ships
fitness in structure, design and suitable equipment. As far as the structure and design is
concerned one may point to an example of carriage contract, when the port of destination
is located in subpolar areas, where in order to perform contract vessel with ice-braking
capabilities would be required or when the destination port is located in the place that
excludes feasibility of mooring in the particular port. For example the biggest bulk
carriers and tankers are not able to enter the Baltic Sea ports since due to their size they
are not able to pass the Danish straits. In such cases those ships are unseaworthy due to
their structure and design.
I.I.II. Adequate equipment
As far as the requirement of adequate equipment is concerned one may point
out inadequate navigation equipment for the contracted voyage, lack of sufficient cargo
space or loading equipment or specialized equipment for stowing contracted goods (e.g.
7
8

Stanton v. Richardson (1875) L.R.9 C.P. 390

J.C.T. Chuach, Law of International Trade, 2nd ed., London 2001, 206

coolers or refrigerators). In the Stanton v. Richardson9 it was held that failing boilers of
a steamship, filled with muddy river water constituted unseaworthiness. In the subsequent
case, based on the same facts it was determined that the boilers could have been easily
cleaned at the sea, so upon this the ship was not unseaworthy. The importance of the
second boilers judgment lies in fact of changing the standard of the burden of proof.
Hence the Court found that the muddy water could have been easily got rid of, it was still
a duty and responsibility of the carrier to do so. In this situation though lack of diligence
of the master and the crew must be shown, instead of mere fact of unseaworthiness that
bears the liability of the carrier.
I.I.III Adequate bunkers
Another interesting example of unseaworthiness that is inadequate bunkers
was shown in McIver & Co. Ltd v. Tate Steamers Ltd10, where the ship Patapsco was
chartered for a voyage from Liverpool to River Plate (Brazil) and back to United
Kingdom. Contract provided that the charterers should provide and pay for the coal. The
chief engineer miscalculated the amount of coal in the bunkers and it became necessary
to take on coal in Brazil, which was more expensive and caused delay. The charterers
sued for damages, what claim was upheld by the Court. The defendants argued that the
charterparty relieved them from the duty to provide seaworthy ship in respect to
providing and paying for the coal. It was argued that it had been to the charterers
discretion how much coal it was required for the vessel before each stage of the voyage,
and to this extend the shipowners had been relieved from the obligation of seeing that the
ship was seaworthy. The Court did not find justification for such an interpretation of the
contract. The Court stated: I cannot see anything in the terms of the charterparty to
relieve the shipowners from the obligation that would ordinarily be imposed on them in
this respect [providing the seaworthy vessel]. Although defendants argued that the
plaintiffs could not claim damages, since they were themselves the ones who provided
insufficient amount of coal, due to their obligations in the light of the charterparty.
Although the wording of the Contract stated that the charterers should have provided and
9

Stanton v. Richardson (1874) L.R. 7 C.P. 421 see. Supra note 6 at 114, footnote 75
McIver & Co. Ltd v. Tate Steamers Ltd (1903) 1 KB 362 (CA)

10

paid for the coal, the Court did not find evidence that they had any discretion as to the
quantity of coal to have been provided. Moreover the Court pointed out the fact, that the
charterers were placed in the position where it was impossible for them to form a correct
judgment as to required amount of coal to be provided, through the default of the carriers
(defendants) servants (the miscalculation by the chief engineer). The Court also noted
that the charterparty could have not been interpreted in the manner that the supply of the
coal was excluded from the shipowners duty of providing the seaworthy ship. The
argument is that, as to everything but the supply of coal, the obligation still remained on
the shipowners, but as to that it was imposed on the charterers It must be emphasized
that it clearly was not an intention of the parties to create such obligation of the charterer.
As charterers obligation to pay and provide the coal is clear and unquestionable it must
be stressed out that it was the duty of the ships captain to give the charterers correct
information, to enable them to provide a requisite quantity of coal. According to the
Court that duty had not been performed and therefore the enough coal was not provided
before the ship left to River Plate. Consequently the vessel was unseaworthy for further
voyage.
Inadequate bunkers were held as unseaworthiness as well in The Vortigern 11
case, where the charterparty excluded liability of the master or engineers. The vessel
sailed from Philippines to Liverpool. She called at Colombo, but did not take sufficient
coal for the next stage of the voyage- Suez. The engineer did not warn the master that the
supplies were running low, when the ship was near the fueling station, so she did not call
at to refuel. Consequently part of the cargo had to be burned as fuel to enable the ship to
get to the Suez. The Court held that shipowners could not have shielded themselves with
the liability limitation clause, since they failed to make the vessel seaworthy. According
to the court insufficient bunkers were the case of unseaworthiness, not just a mere
negligence by the master and the crew.
I.I.IV. Cargoworthiness
It was pointed out above, that in order to be seaworthy the ship must be fit for
particular contracted voyage and for receiving and holding particular cargo.
Cargoworthiness is a vital issue in assessing the seaworthiness of the voyage. The
11

The Vortigern (1899) P 140.

10

landmark cargoworthiness case is Owners of the Cargo on the ship Maori King v.
Hughes12, the ship was carrying the cargo of frozen mutton from Melbourne to London.
The refrigerating equipment on the ship had broken down and the meat had to be sold in
Sydney with loss. The plaintiffs claimed damages, but the defendants relied on the clause
in the bill of lading, which by the way was titled refrigerator bill, that the steamer was
not to be accountable for a loss or damage arising from failure or breakdown in
machinery, insulation or other appliances. The plaintiffs argued that there was an
implied warranty of fitness of the refrigerating machinery at the commencement of the
voyage, to which the exemption clause did not apply.13 The Court ruled in favor of the
plaintiffs, initially pointing at the wording of the bills of lading title. According to the
Court the meaning of that heading was that there was a refrigerating machinery on
board of the ship for the purpose of keeping frozen the meat, which was shipped in a
frozen state. This is the first indication in the judgment that in given circumstances the
existence of the refrigerating equipment was crucial for the evaluating the seaworthiness
of the vessel. The Court also drew a conclusion that there must have been an implied
obligation from the bill of lading to have such machinery on board of the ship. According
to the Court such implied obligation must have been an intention of the parties in the time
of formation of contract. Court pointed out the business rationale of the shipper:
The shipper who has frozen meat to send to Europe knows that, if no precaution is
taken, it will be liable to decompose on the voyage. He therefore must be taken to
stipulate (he would be destitute of common sense if he did not) that there shall be on
board of the ship the known class of machinery which will keep his meat frozen during an
ordinary voyage. That is what he wants, and what he pays for. He does not pay the
ordinary freight; he pays a higher freight, which is usual for a ship which such a
refrigerating machinery.14 The business motivation for the shipper to have a ship
capable to hold frozen cargo was clear, as well as his reasonable expectation to have such
vessel provided by the shipowner, especially in the light of higher freight that was paid.
On the other hand the shipowner must have had been aware that the shipper would not
put frozen meat on board of his ship and paid him an increased freight. Therefore the
12

Owners of the Cargo on the ship Maori King v. Hughes (1895) 2 QB 550 (CA)

13

A.D. Hughes, casebook on Carriage of Goods by Sea, 2nd ed., London (1999), 50
Supra note 12

14

11

Court found that it was an implied term of the bill of lading that the refrigerating
machinery was at the time of shipment fit to carry frozen meat to Europe on an ordinary
voyage made under ordinary circumstances.15
In Queensland National Bank v. Peninsular and Oriental Steam Navigation
Co.16 plaintiffs shipped a cargo of 10 boxes, each containing sovereigns17. Although it
was not expressly stipulated in the bill of lading, parties agreed that the cargo would be
carried in the ships bullion room. During the voyage one of the boxes was stolen. The
bill of lading exempted the owners from the liability in the event of loss by thefts or
robberies by sea or land and whether by persons directly or indirectly in the employment
or service of the company or otherwise

18

The plaintiffs argued that it had been an

implied warranty on the part of the shipowner that the bullion room was reasonably fit to
resist thieves and the exceptions in the bill of lading did not extend to breach of that
warranty. The Court shared that view, stating that the parties at the formation of the
contract had made the contact assuming that the gold should have been carried in the
ships bullion room. Establishing aforementioned implied condition of the contract the
Court stated that there was no reason in those circumstances to not to put the question
whether the bullion room was reasonably fit at the time of commencement of the voyage,
at the port of loading, to protect the gold. Having rising that questions the Court found the
ship unseaworthy.
What emerges from the outcome of this case, in conjunction with other cases,
like Tattersall v. National Steamship Co19, where the cargo was cattle; Stanton v.
Richardson20, with the cargo of sugar; or finally from Maori King v. Hughes21, where
the cargo was frozen meet that as well in case of seaworthiness in general the crucial
element in the cargoworthiness is the fitness for the particular voyage and particular type
of cargo. It is the reason why the Courts were examining fitness and conditions to hold
and carry specific cargo. One may say that the decisive factor is the business nature of
15

id.
Queensland National Bank v. Peninsular and Oriental Steam Navigation Co. (1898) 1 QB 567 (CA)
17
Sovereign a former British gold coin, worth one pound sterling, now only minted for commemorative
purposes- New Oxford American Dictionary (electronic version) , by Apple Computer Inc.
18
Supra note 13 at 52
19
Tatersall v. National Steamship Co. 12 QBD 297
20
Supra notes 7 and 9
21
Supra note 12
16

12

each particular contract and its business purpose. As it is reasonable for the shipper who
ships valuable goods to expect them to be shipped in secured venue, it is reasonable for
the shipper who ships frozen goods to be stored in refrigerated.
I.I.V. Proper Stowage
Another issue is a distinction between cargoworthiness and the manner the
goods are stowed. What on the face of it may seem like an issue of cargoworthiness may
in fact be just a case of adequate handling and stowing of the goods. The distinction is
crucial, because it sets the liability in utterly different way in the context of the HagueVisby Rules, where the shipowner is obliged for a due diligence for making the ship
seaworthy (cargoworthy), and at the same time is exempted from the liability from
damages or loss rendered from the act, negligence or default on the part of the ships
master, crew or other servants, which may occur during stowage. In the Kopitoff v.
Wilson22

the

Court

established

test

for

drawing

distinction

between

uncargoworthiness and bad stowage. In this case heavy armor plates had been placed on
the top of quantity railway iron and secured there by wooden shores.23 The ship
encountered bad weather. As the sea was rough the ship rolled heavily, which caused one
of the armor plates to brake loose. It went through the side of the ship and consequently
caused her to sink, together with all the cargo on board. The plaintiff claimed that that
manner of stowage made the ship unseaworthy. According to the Court the crucial
element of assessment was whether the vessel, at the time of her sailing was in a state, as
regards stowing, reasonably fit to encounter ordinary perils of the sea. The characteristic
feature is reasonable fitness to encounter ordinary perils of the sea. This description
corresponds to general definition of seaworthiness. As well as in seaworthiness in
general, crucial element is fitness or readiness to encounter ordinary perils. As far as
readiness is concerned it must be emphasized that it refers to the state of the vessel in
time of sailing away, at the moment of providing vessel by the shipowner. As the
condition of reasonableness is concerned, the fitness must be conforming in the
conditions of particular voyage. In the Kopitoff v. Wilson case the defendants argued that

22
23

Kopitoff v. Wilson (1876) 1 Q.B.D. 377

Chuah, 208

13

there was an unusual storm, which would have made any ship roll. According to the
plaintiffs contended that the sea roughness and wind were not more to be reasonably
expected. Finally, probably the most important feature is that fitness to encounter
ordinary perils refers to the vessel herself. On the face of it seems clear, but usually bad
stowage affects or threatens the cargo, not the structure of the ship, as it had taken place
in Kopitoff v. Wilson.
The Kopitoff v. Wilson test was used in The Thorsa 24case where the ship was
carrying a cargo of chocolate from Genoa to London. Gorgonzola cheese was carried in
the same hold. Because of bad weather the hatches were closed, in consequence of what
there was insufficient ventilation and the cheese contaminated the chocolate. There was
an exemption clause in the contract, covering the shipowner against liability for any act
neglect and default in the management, loading and stowing of the ship. Nestl, the
owner of the chocolate claimed that the bad stowage rendered the ship unseaworthy, in
consequence of what the shipowner could not rely on the exemption clause. The Court
stated that it had not been contended that ship herself had been in any way defected. The
sole point of the plaintiffs was the manner the cargo was stowed. The court emphasized
that the manner the cargo was stowed did not constitute a danger to the ship herself, in
contrary to the Kopitoff v. Wilson situation, where bad stowage endangered the safety of
the ship and in fact caused damage to her. Similarly in Elder, Dempster & Co. Ltd v.
Paterson, Zochonis & Co. Ltd25, where the ship Grelwen was carrying the palm oil in
casks, on top of which bags full of palm kernels were placed and subsequently the palm
oil casks were crushed. The Court found that at the time of loading of palm oil the ship
was ready to receive and carry it without any injury. Court found that the injury was not
caused by unseaworthiness of the ship or her equipment, but by other factors. One may
draw a conclusion, basing on the outcome of the Kopitoff v. Wilson case on one hand and
The Thorsa and Elder et al. v. Paterson et al. that bad stowage endangering the safety of
the ship may amount to unseaworthiness (see. Kopitoff v. Wilson), but bad stowage,
affecting nothing but cargo damaged by it is bad stowage, nothing but it.26

24

The Torsa (1916)

Elder, Dempster & Co. Ltd v. Paterson, Zochonis & Co. Ltd (1924) A.C. 522
26
Chuah, 209
25

14

It seems that this conservative approach towards interpretation of bad

stowage amounting to unseaworthiness is correct. Distinction between unseaworthiness
and bad stowage must be clear. If the borderline between those two is faded the
unjustified switch of the liability may occur. Law sets strict liability for unseaworthiness,
much stricter than liability for act, negligence or default, which may be excluded by the
will of the parties. In fact bills of lading often limit liability for negligence or default,
such provisions would not be applicable if there was an unseaworthiness found. One
should note, that, not withstanding practical bargaining possibilities of the parties, as bills
of lading are concern, it is the will of the parties to prevail. If there is a will of the parties
to exclude liability for it should be given priority and should not be overridden by the
excessive interpretation of the notion of unseaworthiness. In the situation, where bad
stowage is regarded as unseaworthiness should be an exception, and as such should be
interpreted narrowly. One could easily imagine a situation where a shipper in order to
override limitation of liability, provided either by bill of lading or by statute would rely
on unseaworthiness to seek remedies.
It must be emphasized though that the duty to supply a seaworthy ship is not
equivalent to a duty to provide one that is perfect, and such as cannot break down except
extraordinary circumstances.27 The standard is that the vessel must have a degree of
fitness, which an ordinary, careful and prudent owner would require his vessel to have at
commencement of her voyage, having regard all probable circumstances of it.28 It must
be emphasized that the degree of requirement is high. Firstly a standard not for an
ordinary person should be applied, but for a shipowner, which implies professional
character of his maritime business and a level of skill and experience, higher than one of
ordinary individual. Secondly the standard is high even for the maritime business people,
since the requirement is set not only for an ordinary shipowner, but a higher standard is
set, the one of careful and prudent owner. To this extend the shipowners guarantees

27
28

Supra note 6 at 115

id., footnote 83

15

that the vessel is fit for the voyage. In case of defect it must be determined, if a prudent
shipowner would have made her good before sending to sea.29
I.I.VI. Sufficient and competent crew
Although in aforementioned cases of McIver and The Vortigern the
unseaworthiness lied in the physical condition of the ship and her inadequate equipment,
the human factor in those cases was decisive. Namely it was human mistake,
miscalculation or negligence that determined the physical condition of the vessel
unseaworthiness (chief engineer miscalculating the bunkers, engineer not reporting the
master the shortages in fuel), but still the unseaworthiness itself was a question of
physical condition of the ship. Regardless aforementioned examples incompetent or
insufficient crew may constitute independent cause of the vessels unseaworthiness.
The question of the crew competence does not only arises as to general
capability of the captain and the crew to sail, but as it was strongly emphasized in the
general remarks about unseaworthiness, the competence to sail particular ship,30 so when
the ship has peculiarities the crew must be competent to tackle those peculiarities. 31
Competence of the master and the crew must not only be measured by their training but
by their personal attributes and proclivities.32 Not only the crews competency and
qualifications, but also the size of the crew influences the assessment of the
seaworthiness of the vessel. Insufficient crew may also be a reason of unseaworthiness.
In Hongkong fir Shipping Co. Ltd v. Kawasaki Jisen Kaisha Ltd33 the charterparty
provided that the vessel should be in every way fitted for ordinary cargo service,
which was a standard charterparty term. The engines of the ship were old and required
special expertise from the crew. The Court held that the shipowner had hired insufficient
crew, which was even worsened by the fact that the chief engineer was addicted to drink
and had frequently neglected his duties. Those circumstances rendered the vessel unfit for
the ordinary cargo service, hence constituted unseaworthiness. Court stated that the
vessel was not fit for the ordinary cargo service when delivered, because the engine
29

R.Colinvaux, Carvers Carriage by Sea 13ed, London 1982, 115

J.C.T. Chuah, Law of International Trade, 2nd ed., London 2001, 206
31
id.
32
id.
30

33

Hongkong Fir Shipping Co. Ltd v. Kawasaki Jisen Kaisha Ltd (1962) 2 Q.B. 26 (CA)

16

room staff was incompetent and inadequate Another interesting issue raised in this
case is the distinction between the categories of the unseaworthiness. The charterers
claimed that the vessel was unseaworthy, because of defect and inefficiency of the
machinery, instead of insufficiency and incompetence of the crew. The Court held though
that diesel engines of the ship were in reasonably good condition and that by the reason
of their age the engines needed to be maintained by an experienced, competent, careful
and adequate engine room staff.
This rule was confirmed in the Manifest Shipping & Co. Ltd v. Uni-Polaris
Insurance Co. and La Runion Europene34, where the Court stated that that
unseaworthiness included the staffing of the ship with insufficient or incompetent crew.
In this case the ships master was found incompetent because it lacked knowledge of
operating CO2 fire fighting equipment. The Court held that mere navigational skills of the
crew were insufficient and stated that in assessing the seaworthiness one must take into
the consideration general important duties in ship preservation, such as usage of the fire
extinguishing systems on board of the ship.35
In the Standard Oil Co. of New York v. Clan Line Steamers Ltd36 ship Clan
Gordon, due to the construction had to retain water ballast a when loaded with full
homogeneous cargo. The shipowner did not convey instructions to retain the water
ballasts to the master of the vessel. She was sailing from New York with such cargo and
master ordered to empty the ballast tanks, which resulted in the ship kneeling over and
sinking in calm waters. The Court held that the masters inefficiency might lie in his
ignorance as to how his ship could behave, due to peculiarities of her structure in the
ordinary ocean voyage. According to the Court one could not made a distinction between
the lack of skill and lack of knowledge. Both equally rendered the master unfit and
unqualified to command, and therefore made the ship he commanded unseaworthy.
As one can see Common Law set very strict standards of seaworthiness as the
qualifications and sufficiency of the crew in concerned. Not only has the crew to
sufficient to command and operate particular ship, but has to be familiar with all her
34

Manifest Shipping & Co. Ltd v. Uni-Polaris Insurance Co. and La Runion Europene (The
Star Sea) [1997] 1 Lloyds Rep. 360
35
supra note 15, at 207
36
Standard Oil Co. of New York v. Clan line Steamers Ltd (1924) AC 100 (HL)

17

peculiarities, and be highly qualified not only in navigationally but in general command
and maintenance skills.
It must be emphasized though that unseaworthiness caused by incompetent or
insufficient crew has to be distinguished from negligence on the part of the crew, which
is not the unseaworthiness. The legal distinction between those two is necessary. As it
will be pointed below in details the unseaworthiness in common law is absolute and no
negligence or bad will has to be shown for holding the shipowner liable for providing the
unseaworthy ship. As the case of unseaworthiness caused by the physical condition of the
ship is clear and does not raise any controversy, the issue of unseaworthiness due to
crews incompetence or insufficiency is controversial, especially in the light of the
liability limitation provisions of The Hague-Visby Rules. 37 While article III of the
Convention bounds the carrier to exercise due diligence provide seaworthy ship, article
IV.2. (a) limits carriers liability for the loss or the damage arising or resulting from an
act, neglect or default of the master, mariner, pilot or the carriers servants in the
navigation or in the management of the ship. In the light of those provisions it is clear
that in the interest of the carrier would be showing that the damage or loss in particular
given case was caused by the negligence of the crew or the master, and not the
unseaworthiness of the ship. Contrary the shipper would likely argue that the loss was
caused by unseaworthiness, what would give him the right to claim damages from the
carrier. This problem was raised in the Steel v. State Line Steamship Co.38, where the
vessel State of Virginia was carrying a cargo of wheat from New York to Glasgow. The
cargo was damaged, because seawater entered the ship through insufficiently fastened
porthole. The bill of lading contained an exception for the perils of the sea, also arisen
from negligence. The jury could not make a finding whether the ship was seaworthy or
not at the commencement of the voyage. The House of Lords remitted the case for a new
trial.39 The Lords confirmed that in common law, in the contract of carriage of goods,
wherever the contract is in the form of bill of lading or any other form there is a duty, on
the part of the person who furnishes or supplies the ship, to provide that the ship is fit for
37

see art. IV.2. (a) of the Hague-Visby Rules, the concept of seaworthiness in The Hague-Visby
rules will be discussed below
38
Steel v. State Line Steamship Co. (1877) 3 App Cas 72 (HL)
39
A.D. Hughes, casebook on Carriage of Goods by Sea, 2nd ed., London (1999), 54

18

its purpose, another words that the ship is seaworthy. House of Lords emphasized that to
meet the seaworthiness requirement the ship must be reasonably fit for the voyage,
moreover it was emphasized that the carrier should not only make his best to make a ship
fit, but the ship should be really fit. House of Lords did not answer the question whether
there was unseaworthiness or mere negligence by the crew in that case, since it was to the
jury to determine the facts, but set the principle saying that it must be determined if the
ship was reasonably fit to encounter ordinary perils of the sea. In the more recent case
International Packers London Ltd v. Ocean Steam ship Co. Ltd40, where Hague Rules
were applicable, the cargo of tinned meat was damaged, when the difficult sea conditions
stripped the hatch covers. The ship was equipped with the locking bars to secure the
covers, but they were not placed on time. The Court held that the shipowner had not
failed to exercise due care and diligence to make the vessel seaworthy, since it was for
the master and other officers to decide when to fit the locking bars. On this example one
can draw a conclusion, that seaworthiness is a state at the commencement of the voyage,
a state of fitness for the given voyage, both technical and in the masters and crew
credentials. If the locking bars were not provided at all the ship could have been
considered as unseaworthy, similarly if the crew were not aware of the existence of the
bars, than the crews ignorance could have been considered as unseaworthiness,
according to the Standard Oil doctrine. Instead ship and the crew was prepared for the
kind of the perils they had encountered, but failed to act diligently. As it was shown
above it is crucial to distinguish unseaworthiness from the crews negligence or default.
Similarly as in the case of bad stowage the doctrine of unseaworthiness must be used
prudently, carefully and narrowly. Otherwise it may lead to situation where the notion of
crews insufficiency or incompetence amounting to unseaworthiness is exploited by the
shippers in order to override contractual or statute liability limitation.
I.I.VII. Adequate Documentation
Another category of unseaworthiness is the lack of adequate documentation.
It must be emphasized that the documentation thats lack renders the unseaworthiness
must be of a legal nature. If the documents required influence ships ability to sail it is
clearly an example of unseaworthiness. In the Ciampa v. British Steam Navigation Co.
40

International Packers London Ltd v. Ocean Steam Ship Co. Ltd (1955) 2 Lloyds Rep 218

19

Ltd41 the vessel, which was sailing from Mombasa was lacking the clean bill of health,
which made it necessary for the ship to be sanitized in France, and subsequently made it
impossible to perform the charterparty. It was held that the absence of this document
rendered the ship unseaworthy.42 In The Madeleine

43

the vessel was held unseaworthy,

because it was lacking the deratisation certificate, which was required by the laws of
India and without that document, she could not sail to any other country. Similarly in
Levy v. Costerton 44 the ship was considered unseaworthy, because it was lacking the bill
of health, which was required by the laws of Sardinia. The vessel could not enter the port
of Cagliari and was put to quarantine. It was held that the vessel had not been furnished
with everything needful and necessary for such a ship and for the voyage hence it was
unseaworthy.
The documentation missing must be of a legal nature though to
unseaworthiness to be determined. In Alfred C. Toepfler Schiffahrtsgesellschaft mbH v.
Tossa Marine Co. Ltd

45

the ship Derby was on the time charter and sailing under the

Cypriot flag with Filipino officers and crew. The ship did not have the International
Transport Federation Blue Card, the document indicating that the crews work conditions
and payment meets the ITF standards. The charterparty limited the trading to the extend
that the ITF were excluded. The limitation however did not include Portugal. While the
ship was discharging cargo at the Portuguese port of Leixes the ITF representatives
discovered that the ship did not have the ITF Blue Card. As a consequence the discharge
was stopped for 21 days before the owners reached an agreement with ITF. As a result of
the delay the charterers could not perform sub-charter, which had been stipulated, lost
profits and had to compensate the sub-charter that had been performed instead. Charterers
sued for the damages, claiming that the lack of the ITF Blue Card meant that the
shipowners failed to provide a seaworthy ship. In he present case the Court held that
understanding of the words fitted for service may go beyond a mere physical condition
of the ship but its scope should not be extended to the warranty of work and payment
41

Ciampa v. British Steam Navigation Co. Ltd (1915) 2 K.B. 774

Chuah, 207
43
The Madeleine (1967) 2 Lloydd Rep 224
44
Levy v. Consterton (1816) 4 Camp 389
45
Alfred C. Toepfler Schiffahrtsgesellschaft mbH v. Tossa Marine Co. Ltd (1985) 2 Lloyds Rep
325 (CA)
42

20

conditions of the crew. Court also distinguished this case from former The Madeleine
and Levy v Costerton cases, where missing documents were required by law. In this case
ITF blue Card was a document issued by a self-appointed and extra-legal organization.
Secondly, it must be emphasized that the shipowners had no obligation to obtain the ITF
certificate, which was crucial argument in determining that there was no case of
unseaworthiness in the present case.

I.II. THE NATURE OF THE OBLIGATION IN THE COMMON LAW

Duty to provide seaworthy ship in Common Law is absolute. It means that the
shipowner may not rely on the fact that he had acted with due diligence to provide a
seaworthy vessel or there was not negligence on his part. It is not relevant, whether the
ship owner did his best or tried to provide the seaworthy vessel. The actual condition and
vessels fitness for the sea voyage is important and relevant. In the McFadden v. Blue
Star Line46 the Court stated that if the ship was in fact unfit at the time when the
warranty begins, it did not matter that its unfitness is due to some latent defect which the
shipowner did not know of, and it was no excuse for existence of such defect that he had
used his best endeavors to make the ship as good as it could have been made. Similarly
in Steel v. State Line47the Court stated that the obligation to provide a seaworthy ship
should have been called a warranty and not merely that they should do their best to
make the ship fit, but that the ship should really be fit. Some authors, e.g. Colinvaux,
conclude that in the Common Law, the shipowner undertakes responsibility for any
defect in the ship or her machinery and equipment, even for the defects not discoverable
by careful examination48 It seems to be reasonable to share that approach, especially in
the light of strict application of the absolute nature of the duty to provide seaworthy ship.
There is no reason to believe that the carrier should be released from the liability for the
mere reason of non-discoverable defects.

46

McFadden v. Blue Star Line (1905) 1 K.B. 697

Steel v. State Line (1877) 3 App.Cas. 72,86.
48
R. Colinvaux, Carvers Carriage by Sea, 13th ed., London 1982, 110
47

21

Another issue of great significance is that the carriers duty to provide a

seaworthy ship, although absolute exists only at the beginning of the voyage, namely at
the time the carrier provides the ship, and does not continue after the ship sails away. On
the other hand it is not sufficient that the ship is seaworthy at the time the cargo is being
loaded. If she becomes unseaworthy after loading the cargo and before the time of sailing
away the carrier would still be held liable.49 It must be noted though that as far as the
cargoworthiness is concerned the duty takes effect at the time of loading.50 It is so,
because cargoworthiness is a ability to take and hold specified cargo, so it is clear that
one can expect the ship to be fit to take and hold the cargo in question from the very
moment the cargo is being loaded.
It must be emphasized though that the duty to provide a seaworthy ship does
not extends for the entire time of the voyage. If the vessel is seaworthy at the time of
sailing and becomes unfit after sailing the shipowner would not be liable for the breach of
duty to provide a seaworthy ship.51 If on the other hand the ship is not seaworthy at the
time of sailing and the unseaworthiness is cured by the subsequent repairs, after sailing
away the shipowner would still be liable for the loss caused by unseaworthiness of the
vessel. 52
I.II.I Doctrine of Stages
Practical problems may arise when the voyage is conducted in stages. One
can imagine a situation where one part of the voyage is by river and part by the sea.
Similarly, where part of the voyage is by usually calm sea and other part by well known
areas of rough sea and the bad weather. The condition of the vessel and her equipment as
far as the fitness is concerned may differ. The general rule is that the shipowner may
either make the ship fit for an entire voyage or make her fit at the commencement of the
each stage of the voyage. As far as the second option is concerned it seems to be logical
that in accordance to ad maiori ad minus inference if the ship is fit and ready for the more
dangerous and demanding voyage it should be ready to face less demanding as well.

49

Supra note 48, at 120

Chuah, 210
51
id.
52
Quebeck Marine Ins. Co. v. Commercial Bank of Canada (1870) L.R. 3 P.C. 234.
50

22

In The Vortigern53, where the ship was chartered for a voyage from
Philippines to Liverpool the Court stated that she was unseaworthy for the entire voyage,
for the simple reason she had not enough coal on board for such a voyage. But if such a
strict approach is applied it may lead to the situation, where in long voyages the ship
would never be seaworthy, for the mere reason that she could not, from the
commencement of the voyage, carry on board enough equipment of coal to take her to the
port of destination. The Court pointed out that it had become a common practice to divide
a long voyages into stages for the purpose of replenishing the ships with coal and, as far
as practicable, complying with the warranty of seaworthiness which had been attached
when the ship commenced her voyage.54
Other words, dividing the voyage into bunkering stages had been justified.
The warranty of seaworthiness is not broken by commencing a voyage without sufficient
fuel for the whole of it. The ship is free to take a necessary fuel for reaching intermediary
port, but at the same time she must have enough time loaded there to reach the next
intermediary port and cover the next stage of the voyage.
In the light of the light of doctrine of stages a question arises, how to secure
proper and diligent performance of the contract and certainty of the business turnover.
One could easily imagine a situation when the doctrine of stages being exploited,
subsequently leading to overriding legal requirements of the warranty of seaworthiness.
This problem was pointed at in Northumbrian Shipping Co. v. Timm55, where the Court
held that the owners were bound to choose usual or reasonable stages.56 It must be
emphasized that determination and planning of bunkering stages must be conducted by
the shipowner or his representatives when the ship begins her voyage. Conclusion may be
drawn that if the shipowner, either himself or by a person acting on his behalf fails to
determine diligently the stages of the voyage before it starts or at the last instance when
the ship sails away, he can not shield himself from the liability with the defense of the
doctrine of stages.

53
54
55
56

The Vortigern (1899) P 140

id
Northumbrian Shipping Co. v. Timm (1939) A.C. 397, 404, 407
R.Colinvaux, at 121

23

As far as the time charter is concerned the doctrine of stages does not apply to
each separate voyage on which the ship may be employed under a time charter. The
warranty of seaworthiness in such kind of charter does not arise at the beginning of each
voyage stage, but is implied warranty for the entire period of hiring, if at the starting
point of that period the vessel is in the seaworthy condition.57
Another act that separates the stages of the voyage is loading of the ship. It is
particularly important in the context of stowage and cargoworthiness. The warranty that
the ship is fit to receive particular cargo attaches at the time the cargo is being loaded on
board.58 In McFadden v. Blue Star Line

59

the slice door was opened ant imperfectly

closed after the plaintiffs goods were loaded but before the ship sailed away. In
consequence of bad closing the carried goods were damaged. Court held that if the defect
existed before the goods were put on board of the ship it would have constituted a breach
of the warranty of cargoworthiness. It raises an interesting question, especially in
conjunction with previously analyzed doctrine, stating that only a bad stowage that
threatens the ship herself and her structure can amount to unseaworthiness, in contrary to
bad stowage which solely results with a loss or damage to the cargo. In stage voyages
though, when there are several loadings it may amount to unfitness for receiving a cargo
at the subsequent stages.60
In Botany Worsted Mills v. Knott61shipments of wool and sugar were stowed
in such a manner that the drainage from the sugar did not reach the wool. On the
intermediate loading though the drainage flowed the wool and damaged it. The Court
held the shipowner liable, since the damage was caused by improper stowage and
subsequent unfitness. It must be emphasized that initially the cargo was stowed properly
and the subsequent reloading caused damage and raised grounds for shipowners liability.
Previously it was shown how the doctrine of stages contributes to loosening the strictness
of the duty to provide a seaworthy ship, but interestingly in this example one can see how
the doctrine of stages may actually contribute to tightening the warranty strictness and
liability subsequently. As in the cases of bunkering stages the doctrine allowed to sail
57

Supra note 56 at 122

id.
59
McFadden v. Blue Star Line (1905) 1 K.B. 697
60
see R. Colinvaux at 123
61
Botany Worsted Mills v. Knott (1900) 76 Fed.Rep. 582
58

24

away without sufficient fuel for the entire voyage and the vessel would still be considered
seaworthy the loading stages doctrine allows to establish shipowners liability in the
situation where normally he would not be bound to ensure warranty of seaworthiness.
Assuming that there was no doctrine of stages the shipowner would be required to
guarantee the ships seaworthiness (cargoworthiness) at the commencement of the
voyage only. Subsequent loss of cargoworthiness in consequence of reloading would not
affect the fulfillment of the duty to provide seaworthy ship by the shipowner. In such
situation the carrier would be released from his duty when the seaworthy vessel is being
provided by him at the commencement of the voyage and subsequent alterations of the
cargo stowage would not influence this duty. Doctrine of stages introduces fiction, as if
each stage constituted new, separate and independent voyage, in addition to the voyage as
a whole. This allows imposing attachment of the warranty of seaworthiness at the each
stage of the voyage.
Other concerns in the doctrine of stages are pre-sailing operations. A
comprehensive explanation of this problem is provided in AE Reed&Co. Ltd v. Page,
Son & Easn Ltd62 where a barge, The Jellicoe was overloaded with the cargo of
woodpulp. She sank before sailing away with the cargo on board. The defendants argued
that at the time she sank the warranty of seaworthiness was not attached yet, since the
accident took place before sailing away. Furthermore defendants argued that the doctrine
of stages could not be applied, since the damage was caused by overloading, not by
inadequate equipment. The Court held that damages not repaired at the commencement
of the new stage, collision during loading and starting on the voyage with that damage
unrepaired obviously constitute unseaworthiness at the commencement of the voyage
stage63 The Court noticed that there was no reason for defining the stages only by the
difference in equipment. It was stated that it was overloading that made the barge unfit
for towing and hence unseaworthy. The Court established that by loading, a new stage of
an adventure had been commenced, with a new warranty of fitness for that stage and the
overloading constituted a breach of this warranty

62
63

AE Reed&Co. Ltd v. Page, Son & Easn Ltd (1927) 1 K.B. 743
Chuah, at 210

25

The crucial element of this judgment was establishing the argument that a
new stage of the voyage begins upon loading, in consequence of what the warranties and
duties for the new stage attach even before sailing away.
One could also argue that the vessel, after being loaded found herself on the
bottom of the sea, was certainly unfit for the following stage of the voyage.
The issue that raised more controversy in this case was the damages for the
cargo on board of the vessel and the fact that the cargo was loaded before the accident
happened and that overloading was the factor causing the accident and unseaworthiness.
It must be underlined that in the normal cases of unseaworthiness the ship is provided
by the shipowner in unseaworthy condition, and than, subsequently the cargo is loaded.
In this case the situation is different; the act causing the unseaworthiness is taking place
at the same time as placing the cargo, the damages for would be claimed. It may be
reasonably argued that, as far as the loading of the cargo, plaintiffs were claiming
damages for, was simultaneous with the loading of the cargo that caused damage to the
vessel.
Aforementioned cases exemplified the importance of the doctrine of stages in
the duty to provide a seaworthy ship. The important distinction must be set, between
bunkering and loading stages. Those two kinds of stages present a significant alteration in
the general concept of the seaworthiness. Firstly it allows the release the carrier from the
duty to provide a seaworthy vessel as far as she must be equipped with the fuel for the
entire adventure. It must be emphasized though that special rules had been established in
order to prevent from exploitation and misinterpretation of this liberty. It had expressly
been established that the duty to of diligent and prudent determination and planning of
the voyage stages lies on the carrier.
Secondly as the loading stages are concerned, contrary to the general rules of
seaworthiness the warranty may we widened and include acts that took place after the
vessel sets sails, as long as the intermediary loading constitutes a new stage of the
voyage.

26

I.II.II Burden of proof and the importance of causal link

Unseaworthiness raises grounds for the shipowner liability in case of loss or
damage to the carried goods. The liability of the shipowner is created if at the vessel is
unseaworthy at the commencement of the voyage.
It must be strongly emphasized though that one must establish both existence
of unseaworthiness at the commencement of the voyage, the damage or the loss to the
carried goods and the casual link between the previous two, for the carrier to be held
liable.
In The Europa64 the vessel was chartered to carry sugar bags from Stettin to
Liverpool. The contract provided an exemption for collision. While entering the
Liverpool harbor the vessel struck the dock wall. The impact damaged a water pipe and
water ran into twin-decks damaging sugar stored there. The water also passed through
scupper holes, which were not properly plugged, and in consequence the sugar stored in
the lower hold was damaged as well.65 Initially, the lower court held in favor of cargo
owners, basing of the on the fact that the breach of the obligation of providing a
seaworthy ship deprived the shipowner of benefit of all exceptions. The shipowner
admitted that cargo in lower hold was damaged because of unseaworthiness, but as the
cargo in the twin deck is concerned he relied on the exemption for collision. The
appellate court shared the opinion of the shipowner and ruled in his favor. The court
concluded that the charterer or the cargo owner were entitled to treat the shipowners
warranty (of seaworthiness) as overriding the exemption clause, under condition though,
that the damage sued for had been caused by the unseaworthiness: The cargo owner
must rely on his breach of warranty and must than prove that the damage sued for has
been caused by unseaworthiness at the material time.

The Court also compared the

warranty of seaworthiness to the case of policy of insurance on ship or good, when such
warranty is made expressly or by an implication. Other words, as the shipowner
undertakes to accept the burden of higher level of responsibility on himself by
guaranteeing the fitness of the vessel it is reasonable that his liability would only occur
and be applicable to the damage caused by unseaworthiness, and not to any other kind of

64
65

The Europa, (1908) P84, PD, Div, Ct

A.D. Hughes, at 75

27

damage, caused by different factors, that occurred to cargo or the ship. It is perfectly
reasonable and just to limit such liability only to damages causally linked to
unseaworthiness. If one took The Europa case as an example, it would have been
extremely unfair and unjust to hold the shipowner liable for the entire cargo, even if only
the part of the cargo was damaged due to unseaworthiness. The defendants arguments,
admitting that the cargo in the lower hold was damaged due to unseaworthiness, but at
the same time emphasizing that the destruction of the cargo in the twin-deck cannot be
attributed to unseaworthiness is fully justifiable.
Another argument in favor of defendants is that in case is that the will of the
parties should be prevailing. Regardless the circumstances it is the contract that should be
granted priority and exceptions from this rule should be extraordinary. There is no reason
to accept the view that such extraordinary circumstances arose in case of cargo in twindecks, damaged in result of collision. Such an argument would be able to defend itself if
there was a case of unseaworthiness. Breach of this fundamental duty by the shipowner
would raise the grounds to overlap the contractual provisions; otherwise the priority
should be given to the will of the parties.
One could argue that simple causal link test could be used in assessing the
scope of liability in the seaworthiness cases. The Europas unseaworthiness was in the
lack of proper plugging of the scupper holes. If the holes were properly plugged the water
would not have flooded the lower holds and the damage to cargo would not have been
inflicted. Another words, the damage in the twin-deck was inevitable (although exempted
by contractual provision), but the damage in the lower holds was a damage that could
have been directly attributed to unseaworthiness.
Establishing the existence of unseaworthiness, which caused the loss, is a
sufficient condition for holding the shipowner liable. It is not necessary that the
unseaworthiness was the sole and only cause of the loss.
In Smith, Hogg & Co. Ltd v. Black Sea and Baltic General Insurance66 the
shipowners were arguing that it had been an act, neglect or default of the ships master
what was the real and actual cause of the damage. The Court stated that that the
distinction between neglect conduct by ship master and any other cause of the damage
66

Smith, Hogg & Co. Ltd v. Black Sea and Baltic General Insurance (1940) AC 997 (HL)

28

could not have been made. According to the Court, the negligent act was a co-operating
cause, if it was a cause at all; and due to this fact a primary question had to be answered,
whether the disaster would have not happened if the ship had fulfilled the obligation of
seaworthiness. Once again, similarly as in the previous case, the Court draws attention to
causal link test.
It must be also noted that the Court would not examine whether the
unseaworthiness was a dominant cause of the loss or damage; or it was ancillary cause. It
is enough to establish that the unseaworthiness constituted real, effective or actual cause.
It is immaterial that other causes contributed to the loss or damage.67
It must be emphasized though, that as far as causal link is concerned,
seaworthiness must be something more than a mere causa sine qua non of the loss.68 It
must be emphasized that the damage must follow from the unseaworthiness according to
the usual course of things.69
In Monarch SS. Co. v. Karshamns Oliefabriker

70

Court stated that

Damage arises according to the usual course of things if in circumstances existing at the
day of contract, both parties to it, supposing than to have considered the probable effects
of the breach of the contract, with due regard to events, which might reasonably be
expected to occur, must be assumed as reasonable man to have foreseen such damage as
at least serious possibility
Bearing in mind aforementioned requirement one can recall The Europa
case. It is not difficult to establish that normal course of things in case of badly plugged
scupper holes is subsequent flooding of the lower compartments. The Europa clearly met
the requirement of compatibility with the normal, usual course of things and the causal
link in case of unseaworthiness.
Another question which arises in the context of effect of unseaworthiness is
partys rights to rescind the contract. As a general rule the seaworthiness is not a
condition breach of which entitles the party aggrieved, on discovering it, to rescind the

67

R. Colinvaux, at 108
Supra note at 109
69
id.
70
Monarch SS. Co. v. Karshamns Oliefabriker (1949) AC 196
68

29

contract.71 If one had applied such a doctrine it could lead to absurd consequences, where
the mere fact of initial unseaworthiness would result in parties terminating contracts
immediately, regardless reasonable possibility of proper performance of the contract by
the carrier.
It has been established that the cargo owner is entitled to repudiate the
contract before the loading takes place. In Kish v. Taylor

72

the Court stated that The

fact that the ship is not in fit condition to receive her cargo, or is from any cause
unseaworthy, when about to start on her voyage, will justify the charterer or holder of the
bill of lading in repudiating his contract and refusing to be bound by it.73
In cases Freeman v. Taylor74 and Stanton v. Richardson75 it was stated that
the charterer was entitled to reject the ship if she could not be made seaworthy within
such time as not to frustrate the object of the voyage.76
Aforementioned conclusion is extremely important, not to say crucial for
understanding of the problem. The object of the voyage is a decisive factor, and if it is
possible to save it the carriage contract should not be rescinded. It must be noted though,
that the object of the voyage should be interpreted widely and not in the separation from
the general business context. Not only the very carriage of goods by sea contract should
be taken into consideration, but other linked transactions, which business objectives may
be affected by non or late delivery and the sale of goods contract in particular.
If the sale of goods contract was to be frustrated in effect of unseaworthiness
the charterer or the cargo owner should be entitled to rescind the contract, basing on the
discovery of unseaworthiness of the vessel.

71

R.Colinvaux, at 106
Kish v. Taylor (1912), A.C. 604
73
R. Colinvaux, at 107
74
Freeman v. Taylor (1831), 8 Bing
75
Stanton v. Richardson (1875) L.R. 7 C.P. 390
76
Supra note 73
72

30

II. CARRIERS DUTY TO PROVIDE SEAWORTHY SHIP IN THE HAGUE-VISBY

RULES
Hague-Visby Rules were incorporated into English law in the Carriage of
Goods by Sea Act (CGSA) of 1971. In the United States Hague Rules were incorporated
into domestic law with enactment of the Carriage of Goods by Sea Act of 1936.
(COGSA). Contracts of carriage between the ports of United States and inland water
carriage are covered by the Harter Act.
Article III (1) of the Hague-Visby Rules, and respectively articles III(1) of
both English and American Carriage of Goods by Sea Acts, provide that:
The carrier shall be bound before and at the beginning of the voyage to
exercise due diligence to:
a) Make the ship seaworthy;
b) Properly man, equip and supply the ship;
c) Make the holds, refrigerating and cool chambers and all other parts of the
ship in which goods are carried, fit and save for their reception, carriage
and preservation.
As one can see, Hague-Visby Rules change the concept of the duty it its very
basics. The absolute warranty is not anymore implied in the contracts to which the Rules
apply. It is striking that the carriers duty is limited to exercise due diligence to make the
ship seaworthy.
Another striking feature is that the Rules had distinguished and enumerated
the obligations of the carrier, previously known and established by the Common Law as a
part of the seaworthiness. One can say that all three duties enumerated in the article III(1)
a-c of the Rules were already included in the notion of seaworthiness before.
The obligation to make a ship seaworthy (article III (1)(a)) is equivalent to
general notion of seaworthiness and its definition as a physical and structural condition of
the vessel in particular.
The obligation to properly man, equip and supply the ship may be compared
to the seaworthiness, as requirement to properly man the ship is concerned to
seaworthiness as sufficient and competent crew; and as requirement to properly equip
31

and supply the ship is concerned, it refers to adequate equipment and bunkers, known
from the prior case law.
The third obligation, that is to make the holds, refrigerating and cool
chambers and all other parts of the ship in which the goods are carried, fit and save for
their

reception, carriage and preservation, clearly indicates a similarity with

requirement of cargoworthiness. It must be emphasized that the requirements set in the

article III (1)(c) cover all stages of cargo handling, from its loading and capabilities of the
ship to receive contracted cargo, to the fitness to keep and preserve the cargo.
As far as the requirement of exercising due diligence is concerned the
interpretation of the scope of this term was had been provided in the Riverstone Meat Co.
Pty Ltd v. Lancashire Shipping Co. Ltd77where the cargo of 150 cases of ox tongues was
damaged, when the seawater entered the holds on the voyage from Sydney to London.
The water flooded the ship because the covers of the storm valves were not properly
secured, by the fitter firm, which was negligent. The Court examined whether the carrier
had exercised due diligence. It was undisputed that the cargo was damaged and that it
was damaged because the ship had been unseaworthy, the real question lied in the
carriers diligence or negligence in providing the seaworthy ship. The unseaworthiness
was actually caused by carelessness of a fitter, employed by the skilled repairers working
for the carrier.78 The most significant issue in that case was whether the carrier, who had
pointed independent contractor to perform repairs, could actually have been held liable.
One could argue that it is sufficient for the carrier to exercise diligence in appointing
competent professional contractor to perform the repairs. The Court studied the issue of
diligence attributable directly to carriers agents and distinction between carelessness on
the part of officers or the servants of the agent and on the part of their independent
contractors or subcontractors. The important issue was whether the carrier was obliged to
perform all actions to exercise due diligence personally. The court noticed that:
Whether the responsibility is, it is imposed on the carrier and no one elsethat is clear- but it is equally clear that no one would regard the carrier as being in the
wrong merely because he gets whatever requires to be done, inspection, survey of work,

77
78

Riverstone Meat Co. Pty Ltd v. Lancashire Shipping Co. Ltd (1961) 1 Lloyds Rep 57 (HL)
A.D. Hughes, at 250

32

done for him by someone else. () One must treat the words due diligence to make the
ship seaworthy as if they were equivalent to due diligence to see if the ship is made
seaworthy
The Court stated that the carrier must answer for anything that had been done
amiss in the repairs and that the carriers duty lays in exercising due diligence in ensuring
that the ship is seaworthy, and not due diligence in securing the services of reputable and
competent professional to fulfill that task.79
The Court underlined his dissatisfaction with the state where a cargo owner of
damaged goods through defect in seaworthiness of the vessel, would not be able to
defend his rights and his situation would be dependent on the arrangements with cargo
owner had nothing to do. The Court also criticized the possibility of measurement of
control that the carrier could exercise over persons engaged in surveying or repairing the
ship.
The concern for the protection of rights and welfare of the cargo owners is
crucial. It is extremely difficult to argue contrary to the courts conclusions about
impossibility of justifying placing the cargo owner in the position where he could not
defend his rights nor claim nor claim remedies, only because the arrangements between
shipowner and his contractors.80
One also must look at this judgment in the light of and in conjunction with
the provisions of article IV (1) of the Rules.
Neither the carrier nor the ship shall be liable for loss or damage arising or
resulting from unseaworthiness unless caused by want of due diligence on the part of the
carrier to make the ship seaworthy () Whenever loss or damage has resulted from
unseaworthiness the burden of proving the exercise of due diligence shall be on the
carrier or any other person claiming exception under this article
One might wonder whether in the light of the fact that the burden of proof as
far as due diligence is concerned and high requirements for the scope and the notion of

79
80

J.C.T. Chuah, at 281

id. at 282

33

the due diligence, as it was shown in the case of Riverstone Meat, the positions of the
parties had in fact been significantly changed?
In the Common Law the warranty was absolute, which put the carrier in the
relatively more difficult position, but from the other hand it was the plaintiffs duty and
obligation to prove the unseaworthiness of the vessel. Under the Hague-Visby rules
regime the situation has been somewhat changed: The carriers duty to provide a
seaworthy ship is no longer absolute. Absolute warranty of seaworthiness is not implied
in contracts to which the rules apply. The carriers obligation has been limited to the duty
of exercising due diligence in making the ship seaworthy. On the other hand that is the
carrier who must prove that he had actually exercised due diligence, and as it was pointed
out earlier the diligence standards are high. In this situation one might say that the burden
of proof had been switched as well. Absolute obligation on the shipowner and the burden
of proving the unseaworthiness, damage and the causal link between those two, on the
claimant- usually the cargo owner in the Common Law; On the other hand limitation of
liability only to situations were due diligence had not been exercised and the burden of
proof set on the shipowner to show that the due diligence had been carried out.
What must be emphasized, though that in general there is no presumption of
the unseaworthiness, so the cargo owner must still prove the damage, unseaworthiness
and the causal link, and only after that the shipowner may use the due diligence defense.
(The exceptional instances, where the courts were presuming the ships unseaworthiness,
were when the ship had sunk soon after leaving port, with no weather or any other
circumstances accounting for her loss81, but it must be emphasized that such
presumptions were exceptional.)
Subsequently to the scope of due diligence it must be established, how far
should the carrier go in his precautions to be able to use the due diligence defense.
Diligence and due diligence are ambiguous terms, which may be interpreted unlikely
in different situations. The requirements for the diligence test were set out in the
Amstelslot82 case, where the vessel broke down due to a fatigue crack in reduction gear
of unknown cause. A careful inspection was conducted before the voyage, but did not

81
82

Chuah, at 211
Union of India v. NV Reederij Amsterdam (1963) 2 Lloyds Rep. 223 HL

34

reveal the defect. The inspection included examination of reduction gear by two
surveyors, including the surveyor to Lloyds Register of shipping. Cargo owners argued
that extra test should have been carried out, including so called magnaflux test.
Magnaflux test is a process in which oil impregnated with iron particles is spread over
the gears and than charged with an electric current, which will produce a visible line
particles at any crack.83 Number of other, additional precautions was suggested,
including:
-

removing the upper housing of the gears for the purpose of examination,

wiping the teeth of the gears clean of oil before examining them

examining the teeth of one helix at a time, instead of four helices

simultaneously.

The Court had found that the carrier was not obliged to take every
conceivable precaution; instead he only needed to take such precautions as would have
been take by reasonable owner.84 Other words, one might say that that the standard of
precautions to be taken should be adequate to the standard of precautions that a
reasonable person in the defendants shoes, with the skill and knowledge of the defendant
or the skill and knowledge the defendant ought to have had, would have taken.85
One can concur that cargo owners requirement of taking additional tests and
inspections, including magnaflux test exceeds the standard that reasonable shipowner
would have taken. The nature and complexity of the magnaflex test indicate its
extraordinary character and implies impossibility of its use in the normal course of
marine surveys. In Amstelslot the Court found that the most important question in the
case was not whether additional precautions would have increased the possibility of
finding the defect, but whether reasonable person in the shoes of the carrier would have
normally taken them, and if not would such person be considered incompetent. In fact the
Court agreed that additional precautions would have given better chance of finding the
crack.
The Court concluded following:

83

id.
S. Baughen, Shipping Law, 3rd ed. 2004, 125
85
Chuah, at 282
84

35

After all, there would be a better chance of avoiding road accidents if

everyone drove five miles an hour. This line of questioning is quite legitimate for the
purpose of lying down a foundation, but it does no more than that. The ultimate question
is not whether there was a better chance of discovering the crack, but whether, on
balance, one or more of the precautions ought to have been taken. What has to be
balanced is in the one scale extreme unlikelihood of there being any crack to be found
and in the other scale the serious damage and loss that could occur if there were a crack.
The balance that is so struck will determine whether or not a prudent surveyor should
have felt it necessary to do more than these surveyors did.
Some points in this excellent and clear judgment require clarification. Once
again it must be emphasized that the Court did not question the necessity and sensibility
of additional surveys, it was clear that if such precautions had been taken the likelihood
of discovery of the crack would have been much higher. What one should seek for is the
balance of interest and risk. It may be argued as well that adequacy of measures to the
goals should be sought for. The balance the Court is talking about should also take into
the account practicability, both actual and business and economic of the measures to be
taken.
The final remark that must be done is the meaning of the notion of
reasonable person. It must be emphasized that the test of reasonable person should refer
to a general and abstractive person. It is clear that reasonable is an ambiguous term
again, but it should not be compared, benchmarked or referred to any actual conduct of
the shipowners. If the general practice of carriers is bad and careless it does not mean that
such bad carriers should be applied in the reasonable person test.
Similarly, compliance with the necessary international codes of shipping
standards as to seaworthiness is not a conclusive evidence of due diligence, as it was held
in the Northern Shipping Co. v. Deutsche Seereederei GmbH86, where the Russian
version of the International Maritime Dangerous Goods Code (IMDG) was an issue. 87
Bearing that in mind it also must be noted that the opposite is presumed either: non-

86
87

Northern Shipping Co. v. Deutsche Seereederei GmbH (2000) 2 Lloyds Rep. 255
Chuah, at 282 and id. footnote 6

36

compliance with a relevant shipping codes does not automatically determine the lack of
due diligence.
The court reached similar conclusions in the case of The Hellenic
88

Dolphin , where the shipowners claimed that they had exercised due diligence by
following three factors. Firstly the vessel had undergone annual drydocking and was fully
classed. The intermediate examination of the vessel had also been conducted by
superintending officer before the ship set out on the round voyage. Finally the routine
inspection had had been carried out by the master and the chief officer.89 The cargo
owners claimed that in order to use the due diligence the carrier should have had carried
out further examination by a superintending engineer on the turn around point of the
round voyage. The Court stated that such measures would implicate perfection, but not
necessarily would have been regarded as a course of action that would be obvious to a
reasonable shipowner.
In this case, similarly as in The Amstelslot case the court emphasized
importance of the likelihood of the conduct by a reasonable person over material value of
the actions for the actual feasibility of discovering the potential defects.
A parallel with traditional common law can be seen. Neither in the common
law, nor in contracts where the Hague-Visby rules are applicable there is no requirement
for the perfect ship in the common law, nor the expectation for perfect diligence exists
in the Rules.
As the exercising due diligence to making the ship cargoworthy is concerned
interesting example was provided in the A. Meredith Jones & Co. Ltd v. Vangemar
Shipping Co. Ltd (The Apostolis)90, where welding carried out on the ship had exposed
the cargo of cotton to a risk of ignition. The Court examined the issue, whether the
exposure to risk of ignition caused by welding made the ship unseaworthy. The court of
first instance held that the welding works rendered the ship unseaworthy for receiving
inflammable cargo.
If one were to ask rhetorically whether the carrier had made the hold of the
ship fit and safe for preservation of an inflammable cargo when he was carrying out
88

The Hellenic Dolphin (1987), 2 Lloyds Rep. 336

S. Baughen, at 125
90
A. Meredith Jones & Co. Ltd v. Vangemar Shipping Co. Ltd (1997) 2 Lloyds Rep. 241
89

37

welding work above the hold, which resulted in sparks raining into it, there could I think
be only one answer: no, his hold was not fit and safe for the cargo; his ship was
unseaworthy
The court in this judgment was basing on the Maxine Footwear Co. Ltd v.
Canadian Government Merchant Marine Ltd91, where the cargo was ignited as a result of
fire in the insulation in the hold before the cargo was being loaded, so the court found the
vessel unseaworthy from the time the vessel caught fire.92 The higher court in Apostolis
however distinguished those cases, stating that there was no breach of Article III (1) of
the Rules, since the welding exposed the cargo to an ephemeral risk of ignition.93 The
Court also stressed out the holds themselves were not initially defect.94 It was also
emphasized when the Court distinguished The Apostolis and Maxine Footwear that the
fire in Maxine had taken place before the cargo was loaded and that it was insulation of
the vessel on fire; in the meantime in The Apostolis the ship became unseaworthy just
because the of the fire, and not as a result of some intrinsic defect in the ship or system
The final argument for holding that there was no breach of Article III (1) was
that there was no negligence on the part of shipowner, since the exposure of the cargo to
an avoidable risk did not make the ship unseaworthy.95
As the notion and the scope of due diligence is established it does not
necessary imply that in every case, where it is held that the carrier did not exercise due
diligence to provide a seaworthy vessel, he would always be held liable. Similarly as in
the case of the burden of proof in the common law, the causal link between breach of an
obligation and loss or damage must be shown. If the carrier who failed to prove that he
had exercised due diligence to provide a seaworthy vessel can still protect himself from
the liability if he manages to prove that the failure to take a due diligence did not cause a
loss.96

91

Maxine Footwear Co. Ltd v. Canadian Government Merchant Marine Ltd (1959) 2 Lloyds Rep. 105

92

Chuah, 283
id.
94
id.
95
id.
96
S.Baughen, 126
93

38

In The Yamatogowa97 cargo owners were trying to recover the salvage and
general average contributions, following the breakdown of the vessel due to the failure of
its reduction gears. Because of the way the gears were encased, they were very difficult
to be examined. In the previous year the shipowners had inspected the gears, but had
given them only a superficial scrutiny. Undoubtedly they had failed to exercise due
diligence, but the shipowners were able to shield themselves from the responsibility,
because of the fact that even a through check of the gears would not have revealed the
deficiency.98
The aforementioned example once again shows the importance of the causal
link in the seaworthiness claims cases. It must be emphasized that neither warranty nor
obligation of the carrier is absolute and he has proper measures in his disposal to protect
himself from the potential liability.
If one was to construe the burden of proof and defense allocation rules in the
cases related to seaworthiness in contracts ruled by the Hague-Visby Rules it would have
been following.
The burden of proving the loss or damage to the cargo, unseaworthiness of
the vessel and the causal link between the two, is on the claimant (usually cargo owner or
his insurer). Subsequently, in the light of Article III (1) of the Rules the shipowner is
entitled to defend himself, since his obligation is not absolute and he is only obliged to
exercise due diligence in making the ship seaworthy. In this respect, since it is the
shipowner who benefits from the statutory provision (liability limitation), it is for the
shipowner to prove that the due diligence had been carried out.
Normally carriers failure to provide enough evidence that he had exercised
due diligence would have given rise to his liability. However carrier has one more chance
to protect himself from the liability by proving that there was no conjunction between
lack of diligence and the loss or damage to the cargo. It must be emphasized that such
evidence is relatively difficult to present.

97
98

The Yamatogowa (1990) 2 Lloyds Rep. 39

Supra note 96

39

The second significant alteration of the Common Law tradition, set out by
article III (1) of the Rules refers to the doctrine of stages.
The wording of the Rules attach obligation to exercise due diligence in
making the ship seaworthy before and at the beginning of the voyage. In contrary to
the common law, where the doctrine of stages applied, the Rules set out a continuous
duty from start of the loading up to sailing.99
In Makedonia100 the vessel had broken down and the cargo owners had to
pay a share of salvage costs. The cargo owners claimed that the ship was unseaworthy
due to insufficient bunkers. In the bunkering context obligation to exercise due diligence
consists of two things: The vessel must be adequately bunkered for the first stage of the
voyage and the proper bunkers must be arranged at the intermediate ports. The
shipowners fulfilled both duties and were not in the breach of the article III (1) and were
protected from the liability. If the common law was applied in the similar factual state the
doctrine of stages would have imposed a duty on the shipowners to take a due diligence
in making the actual bunkering operations at the intermediate ports. On the face of the
problem one can see a little difference. The crucial difference lies in details. In common
law an obligation was to whole of bunkering operation was done properly. The wording
of the judgment shows that the shipowners duty is just to exercise due diligence in
arranging proper kind of bunkers in the intermediate ports, but not imply the obligation to
take the due diligence in every stage of bunkering operation and its actual result.
The notion of the time scope of the obligation from Article III (1) of the
Hague-Visby Rules was also explained in the Maxine Footwear Co. Ltd v. Canadian
Government Merchant Marine Ltd101 case. The shipowner argued that the duty to
exercise a due diligence to make the ship seaworthy at two moments of time: at the
beginning of the loading and at the beginning of the voyage. The court held that the
dutys nature is continuous and that the shipowner was obliged to exercise the due
diligence to make the ship seaworthy during the entire period from beginning of the
loading until beginning of the voyage. In the courts opinion before and at the

99

S. Baughen, at 126
Makedonia (1962) P 190
101
Supra note 91
100

40

beginning of the voyage means the period from at least the beginning of the loading until
the vessel starts her voyage.
In the courts opinion the wording of before the voyage could not be
interpreted as at the commencement of the loading. It is clear that the notion before
the voyage covers entire period prior to sailing away. Commencement of the loading
seems to be logical moment from the duty should be attached.

41

III. DUTY TO CARRY THE GOODS WITHOUT DEVIATION

III.I.I The Notion of deviation
Duty not to deviate is a prescribed and implied condition in all voyage charter
parties.

102

It is not hard to realize the significance of fulfilling this duty for the proper

and satisfactory performance of the charter party contract. Timely delivery is extremely
important for the shipper. One can easily imagine consequences for the shipper that may
arise from the failure to deliver goods on time. Notwithstanding which party of the sales
contract the shipper is it is his essential and primary interest to have the goods delivered
on time. Late delivery may not only result with the liability for the breach of contract,
both carriage and sales with all its consequences provided by law. Subsequently late
delivery may result in liability for damages for lost profits and anticipated contracts.
The carriage of goods by sea is a high-risk activity. Factors like distances,
weather, sea conditions, natural disasters, embargos, strikes, military actions and so forth
influence sea transport more than any other types of transportation and business
activities. Aforementioned factors may, with high probability affect the timelessness of
the delivery of the goods carried by sea. Bearing that in mind one can realize that
additional threat for timely delivery, such as deviation should be eliminated in advance.
Contrary to other obstacles deviation is usually predictable and dependent on the masters
will, so it can be contracted out.
Deviation means departure from the prescribed or ordinary route which the
ship should follow in fulfillment of a contract of carriage.103
If the parties of a contract had stipulated a route of the ship in the contract,
change of course and departure from this route shall constitute deviation. Situation
becomes more complicated when there were no contractual provisions about the route. In
practice very few standard charter forms make an express provision for the route to be
followed.104 In this case the ordinary trade route should be applicable. In the lack of
evidence the direct geographical route shall be presumed to be an ordinary or usual

102

E.R.H. Ivamy, Carriage of Goods by Sea, 21, 13th ed. (1989)

id. 7
104
J.F.Wilson, Carriage of Goods by Sea, 17, 4th ed. (2001)
103

42

route, but this presumption may be rebutted by the evidence of the practice actually
adopted in a particular trade or even in a particular shipping line.105
In Reardon Smith Line Ltd v. Black Sea and Baltic Insurance Co.106 the
Reardons vessel Indian City, sailing from the port of Poti to Baltimore, USA called at
the port of Constanza to bunker. During entering the seaport she ran aground and was
seriously damaged. Part of the cargo had to be thrown overboard and the ship could not
continue her voyage to Baltimore. The charterers withheld the value of undelivered cargo
from the freight. Reardon demanded full payment m but other party claimed that the fact
that the vessel had added more than 200 miles to call at Constanza and that fact
constituted a deviation. It must be emphasized that in 1930s cheap oil was available in the
Romanian port of Constanza. Therefore Constanza became a customary refilling port for
ocean going vessels. It had been shown that 25 % of vessels sailing through Bosphorus
were calling at and bunkering at Constanza. Court held that not geographical direct route
had to be followed, but the usual route, and in that case it was usual for the oil burning
ships to call at Constanza. In this case custom of calling at Constanza decided that there
was no deviation. The existence of such custom must be universal and uniform though.107
Having in mind the Courts opinion rendered in Reardon case, The test of what is usual
and reasonable in a commercial sense may arise in very different circumstances and
must be decided whenever it arises by the application of sound business consideration
and by determining what is fair and reasonable in the interest of all concerned it should
be noted that the uniformity and universality of the custom can not be interpreted
absolutely and objectively. The application of aforementioned must be conducted in
respect of any given particular case and fact pattern.
It must be noted that deviation not necessarily means the deviation from the
geographical route. Delay in performing the contract of voyage may also constitute a
deviation.108 Such approach is fully justified. Reasoning by analogy one may argue that if
taking geographical route different than stipulated in contract or bill of lading constitutes
deviation performing the carriage contract in a different time frame should be treated as
105

A.D. Hughes, Cases on Carriage of Goods by Sea, 80, 2nd ed. (1994)
Reardon Smith Line Ltd v. Black Sea and Baltic Insurance Co., [1939] AC 562 (HL)
107
J.C.T. Chuah, Law of International Trade, 215, 2nd ed. (2001)
106

108

S. C. Boyd, A.S. Burrows, D.Foxton, Scrutton on Charterparties, 257, 20th ed. (1996)

43

such as well. The reason why duty not to deviate is an implied carriage contract term is
that deviation brings additional, unnecessary risk for the vessel and her cargo. The risk is
brought upon the ship not only when she deviates from the geographical voyage route but
when the voyage is delayed as well. Analogically as in the case of geographical route
deviation the test must be conducted whether the damage or loss would have taken place
if there was no deviation- delay. The justification for this reasoning is that delay prolongs
the risk of a voyage, for example taking another ship in tow had been held to be an
equivalent to deviation, since it must retard the progress of a towing vessel and thereby to
prolong the risk of a voyage109
The crucial characteristic of deviation is that it must be intentional. The
essence of deviation is a voluntary substitution of another voyage for a contract
voyage110. The deliberate act of deviation must be a part of ships owner or her
officers.111 Consequently there will be no deviation in the situation where the vessel had
sailed of the course due to the masters illness, where the ship is blown off the course.112
The question arises how the involuntariness of the deviation caused by an error should be
treated. Deviation caused by an error, resulting from negligence or even in cases of lack
of good, proper or reasonable sea practice should not be treated, as it was deliberate,
with all consequences.
Deviation constitutes breach of contract and results in the rise of the liability
of the carrier. The question arises whether it constitutes fundamental breach.
Traditionally deviation had been treated as such, the contract had been commonly said to
be terminated by the deviation, with no protection usually given to common carriers
stipulated.113 Most commonly deviation was treated as giving right to the party of
carriage contract to consider the breach a repudiation bringing the contract to an end and
claim damages. The charterer may also choose to accept the deviation and continue the

109

supra note 7, footnote 75

supra note 1
111
J.F.Wilson, 17
112
J.C.T. Chuah, 216
113
A.D. Hughes, Cases on Carriage of Goods by Sea, 90, 2nd edition (1994)
110

44

contract and claim damages only. It must be emphasized though that in this latter case the
carriers right for freight will remain untouched.114
According to US doctrine unjustified deviation makes the carrier insurer of
the goods, under a breach of contract theory, as a wrongdoer in tort115, hence the liability
and the risk for loss or damage of goods passes on the carrier. One should ask himself a
question what is the moment of passage the risk and whether the risks passes back after
returning to the contractual or usual route. The first question seems to be prima facie
clear and one would agree that liability for the loss or damage of goods occurs from the
moment of going of course. The issue becomes more complicated though when there was
an involuntary deviation caused by an error resulting from mal practice or negligence.
For the sake of certainty and integrity it should be assumed that the liability and passage
of risk occurs also from the moment of going of course, not from the moment of error,
negligence or the act of bad practice taking place. It should be emphasized that
aforementioned circumstances do not give rise to the passage of risk, but deviation does.
The more complicated issue is the question of liability for the damages or the
loss of goods after returning to the contractual or usual route. One must examine the
casual link between deviation and the occurrence of the event causing damage or loss of
goods. If the event causing damage could have been avoided providing that there was no
delay caused by deviation there would be sufficient justification for the carriers liability.
From the other side when the event could not be prevented from or avoided even if the
voyage was continued, following the contractual or usual route.116 Another question that
arises is to what extend would the deviating carrier be liable. Aforementioned doctrine
that tells to treat the deviating carrier as if he was an insurer tends to favour the strict
approach and the extensive liability of the carrier. Would that liability be so extensive as
to cover the cases of force majeure? Though the liability should be extended, as the
insurer bears the extensive risk, such as perils of the sea, it should not be extended that
far to cover force majeure. Ivamy also points out that in case of unjustified deviation the
shipowner cannot rely on the exception clauses in the charter party and then is then only
entitled to the benefit of the exceptions available to a common carrier, e.g. act of God,
114
115

S. C. Boyd, A.S. Burrows, D.Foxton, Scrutton on Charterparties, 260, 20th ed. (1996)
T.J.Schoenbaum, Admiralty and Maritime Law, 627, 3 rd ed. (2001)

45

loss by the Queens Enemies, if he can prove that the loss would have occurred even if no
deviation had taken place.117 Some authors go even further, claiming that unless he
proves that the damage or loss had been a result of an act of God or by the Kings
enemies or by inherent vice of the goods and the loss or damage must have had occurred
even if there was no deviation the carrier would be liable irrespectively the loss or
damage had arisen after the deviation had ceased, during the deviation or even before
deviation.118 The latter case is especially interesting. The example is loss covered by an
exemption in bill of lading, for example the sea perils and occurred before deviation had
taken place. The deviation is said to have displaced and destroyed the special contract
(exemption in bill of lading).119
Another effect of unjustifiable deviation is that the carrier cannot claim the
contractual rate of freight payable under charter-party. It may be entitled to a reasonable
sum if the goods are carried to a destination safely.120
III.I.II Justified Deviation
In some circumstances deviation is permissible and does not give rise to
carriers liability. Traditionally Common Law allows deviation for purposes of saving
human life, to avoid danger to ship or cargo and when it is made necessary by some
default on the part of charterer.121
Deviation for saving human life is always justified and permitted. Saving life
at the sea is fundamental moral duty and should not be distressed by any threat of legal
liability for the possible damage to a ship or cargo. Saving human life should be
interpreted broadly and also should include deviation for communicating with a vessel in
distress. The impulsive desire to save human life when in peril is one of the most
beneficial instincts of the humanity, and nowhere more salutary in its results than in
bringing help to those who, exposed to destruction from the fury of winds and waves,

117

E.R.H. Ivamy, Carriage of Goods by Sea, 23, 13th ed. (1989)

S. C. Boyd, A.S. Burrows, D.Foxton, Scrutton on Charterparties, 259, 20th ed. (1996)
119
id. footnote 84
120
E.R.H. Ivamy, Carriage of Goods by Sea, 23, 13th ed. (1989)
121
J.F.Wilson, 18
118

46

would perish without assistance.122 Common Law does not justify deviation for the sole
purpose of saving property. In the case Scaramanga & Co v. Stamp123 the steamship
Olympias, owned by defendants had sighed another ship (Arion) in distress. Arions
machinery had been broken down and the ship was in a very bad condition. The weather
and the sea conditions were fine and Olympias could have had taken the Arions crew
on board easily and save them. Instead the captain of Olympias decided to attempt to
salvage the ship in order to claim salvage remuneration. After having taken Arion a tow
Olympias had got ashore and both ship and cargo were lost. In this case Court had
confirmed permissibility of deviation for the purpose of saving human life and did not
justify deviation for saving property. In Scaramanga case it was clear that the crew could
have been saved without putting the salvage ship and her cargo to risk and danger. As
indicated above salvage operation and towing brought additional not necessary risk upon
Olympias. It not only prolonged risk of a voyage but as well introduced substantial,
significant risk in navigation and sailing. One should bear in mind that towing another
vessel changes the sailing conditions significantly and requires skills and experience from
the master and the crew. Court clearly distinguished deviation for saving human life from
saving property, where prior is protected and latter results with all the effects of
unjustified deviation. Court stated that if lives of the persons on board a disabled ship
can be saved without saving the ship, as by taking them off, deviation for the purpose of
saving the ship will carry with all the consequences of an unauthorized deviation.124 In
the situation when the only possible way to save human life would be salvage of the ship
such deviation would be justified, providing that the motive leading to deviation is saving
human life and the salvaging ships master and crew are acting in bona fide of saving
lives.125
The limitation of the liability in case of saving human life is high. The
deviation for saving human life would not involve forfeiture of insurance nor liability to
the owner of the goods.126

122

Scaramanga & Co. v. Stamp, (1880) 5 CPD 295 CA

id.
124
See supra note 21
125
id.
126
J.C.T. Chuah, 216
123

47

The deviation to avoid danger to the ship or cargo is also justified. It must be
emphasized, that it is not necessary that the danger should be common for ship and cargo.
It is enough that either ship or cargo would be in danger to justify deviation.127 One of the
main duties of the master is to ensure bringing the adventure to successful conclusion.
Protecting the ship and her cargo from undue risks would be a justified reason for taking
the ship off the contractual or usual course.128 The risks that may cause such deviation
include storms, icebergs, heavy fog, pirates and the fear of capture by hostile forces.129
The danger that justifies the deviation must be of reasonably permanent nature. In case
that deviation was reasonable the charterer cannot refuse full freight payment.
The other reason that justifies deviation is when the ship moors to the port for
necessary repairs when she suffered damage. It is unclear though whether in such
situation ship should be put for repairs into nearest port or to some other. Ivamy, favors
the first concept130, while Chuah supports the second concept: The liberty to take the
ship to port for repairs is not confined to using the nearest port; it is always question of
fact as to what is reasonable decision of the shipmaster.131 Chuah opinion seems to be
more adequate. The distance from he port should not be the sole consideration in such
case. Master should also take into consideration factors like quality of repairs in given
ports, costs, time of repairs and general condition of a vessel, and the nature of the
damage. After having examining those factors it may happen that some more distant port
should be more suitable in given situation.
The question arises whether deviation for repairs is justified in the situation
were repairs were necessary due to prior unseaworthiness of the vessel. The United States
Courts have held in the case The Louise132 that deviation was unjustified in the situation
when shipowner was aware of unseaworthiness before sailing away. On contrary English
Courts held that deviation for repairs, even caused by unseaworthiness is justified. House
of Lords held that justification of deviation lies in the necessity to avoid the danger, and
is not affected by the cause of that danger, therefore deviation for repairs, even caused by
127

S. C. Boyd, A.S. Burrows, D.Foxton, Scrutton on Charterparties, 265, 20th ed. (1996)
128
See supra note 19, at 21
129
id
130
131
132

id.

J.C.T. Chuah, 217

The Louise [1945]AMC 363, J.F. Wilson, 19, footnote 62

48

initial unseaworthiness should be justified.133 It seems that the view the first view,
expressed by the American jurisprudence is more justified. It is hard to give account to
opinion justifying breaching one fundamental duty of a party to a contract, to avoid
danger arising from breaching another fundamental duty. Supporters of the approach
represented by English Courts may argue that the charterer may always claim his
remedies on the grounds of carriers breach of duty to provide seaworthy ship. The
arguments for such approach would be certainty and integrity of the doctrine: the
deviation doctrine would be clear and free from exceptions; harmed party would still be
satisfied on the basis of seaworthiness. On the face of it such approach seems
satisfactory, but one must pay attention to the practical side of the problem, namely
question of the burden of proof. The advantage of restrictive deviation doctrine is
presumption that deviating carrier is to be held liable. If only it is proved that the
deviation actually took place, which is relatively easy to show the carrier is liable and
faces all consequences of unjustified deviation. The presumption may be overruled by
evidence by the carrier that he deviated to conduct necessary repairs.
Deviation made necessary by default by a charterer is also permitted. This is
fully justified. It may be in the situation when charterer had load on board some
dangerous goods without carriers consent or when charterer had breached his contractual
duty to load a full cargo. In the first case the carrier will be justified to deviate in order to
discharge those dangerous goods, in the latter situation he will be entitled to deviate to
load full cargo.134 One might wonder why in case of necessity of discharging dangerous
goods deviation is not permitted on the basis of avoiding the danger to the ship or cargo.
As emphasized above such danger must be of reasonable and permanent nature. Although
the second condition seems to be undoubted- dangerous goods are stored on board of the
vessel continuously and permanently, the fulfillment of the first condition, raises
questions. It must be noted that possible threat is not inevitable and reasonable enough.
Dangerous goods may or may not bring peril upon the vessel and other cargo; secondly
the mere fact of carrying dangerous goods is nothing unusual. Dangerous goods are
commonly carried every day practically on all seas. The wrongdoing is not in placing the
133
134

J.F.Wilson, 19
id. 20

49

dangerous goods on board, but in doing that without consent and knowledge of the
carrier, therefore it is justified to distinguish grounds for justifying the deviation and give
right to deviate on the basis of default by a charterer.
III.I.III Liberty Clauses
It has become a common practice to include in the contract or bill of lading so
called liberty clauses. Justification of deviation stipulated expressly in the contract is
permitted on the general rule of freedom of contracting.

Such clauses give the master

right to deviate in certain situations. It must be emphasized that as any exceptions from
the rule liberty clauses should be interpreted narrowly. Deviation or liberty clauses are
normally drafted in favour of the shipowner and courts interpret them restrictively.135
Certainly too broad interpretation of liberty clauses cannot destroy the commercial object
of the contract. In the Leduc v. Ward136 case liberty clause permitted to call at any ports
an any order. Court stated that such clause was too wide. Basically it had the same effect
as if it was drafted any port in the world. Such construction was held to be too wide and
not consistent with the mercantile object of the contract.

The doctrine of commercial

object of the contract is very significant in interpretation of liberty clauses. It must be

noted that that is not the only test that have to be met in narrow interpretation of deviation
clauses. Equally important is reasonable purpose of deviation. The liberty could not
reasonably be intended to give the right to call at an intermediate to land or take on board
friends of the shipowner for the purposes of a pleasure trip137
It must be emphasized that liberty clauses, although interpreted narrowly and
restrictively are valid and enforceable. When carefully and precisely drafted liberty
clauses will have full effect138

135

J.F.Wilson, 21
Leduc v. Ward (1888) 20 Q.B.D 475, J.C.T Chuah, 220
137
J.C.T Chuah, 221
138
id.
136

50

III.II. DUTY NOT TO DEVIATE IN CONTRACTS RULED BY THE HAGUE-VISBY RULES

The Carriers duty not to deviate looks slightly different according to the
Hague-Visby Rules, introduced into the English law in The Carriage of Goods by Sea
Act and Hamburg Rules139, than in traditional common law. The most significant
difference is that Hague-Visby rules expressly permits deviation for purposes of saving
property. Art. IV(4) provides that Any deviation in saving or attempting to save life or
property at sea or any reasonable deviation shall not be deemed to be an infringement or
breach of these rules of contract of carriage and the carrier shall not be liable for any
loss or damage resulting therefrom. On the face of the problem one may notice how
wide this liberty is comparing to the common law rules.
Not only deviation for saving the property is allowed but also deviation in
attempt of doing that, which gives more flexible opportunities for the carriers to avoid
liability, since there would be enough for them that they had taken an attempt of saving
life or property.
As one continue to analyze the article of Hague-Visby Rules the decrease of
strictness is even more obvious. Permission to deviate for any reasonable purpose
(reasonable deviation) is striking. In practice this provision should not have as significant
effect as express permission for deviation with the purpose of saving property, since the
courts would rather be careful and conservative in interpreting this provision. What is
reasonable must be assessed in the light of every condition and every circumstance of the
case. The deviation must be reasonable not only to one party but to both.140 This
opinion was rendered by the Court in the Stag Line Ltd v. Fosclo, Mango & Co. Ltd.141
In this case the vessel had deviated to allow engineers working on board to be landed in
the port of convenience. After landing the engineers the ship did not return to her route
immediately and ran on the rocks. The cargo owners sought to recover their losses,
claiming that the damage was a result of unlawful deviation. The carrier claimed that
deviation was allowed by the provisions of the Carriage of Goods by Sea Act, as
reasonable. Court noticed that vessels often deviate in order to avoid some imminent
139

UN Convention on Carriage of Goods by Sea 1978

J.C.T Chuah, 294
141
Stag Line Ltd v. Fosclo, Mango & Co. Ltd (1932) A.C. 328
140

51

peril. Court contested the requirement of reasonableness to both parties of the contract
and pointed out that deviation is usually caused by a fortuitous circumstances that are
never contemplated to the original parties to the contract; and may be reasonable,
though it is made solely in the interest of the ship or solely in the interest of the cargo or
indeed in the direct interest of neither. Example of the last situation, according to the
court may be when the presence of the passenger, member of the crew is urgently
required on the shore after the ship had sailed away, or when there is a fugitive on board.
The Court noticed that the test for reasonable deviation should be following:
The true test seems to be what departure from the contract voyage might a
prudent person controlling the voyage at the time make and maintain, having in mind all
relevant circumstances existing at time, including the terms of contract and interest of all
parties concerned, but without obligation to consider the interests of any one as
conclusive
The prudent person controlling the voyage means the master, shipowner or
their agents, therefore the Court expressly excluded cargo owner from the test and
resigned from introducing the notion of reasonable cargo owner. What is striking the
test should be made after taking into the account all the circumstances of the case. The
terms of the contract and interests of the parties should be taken into consideration, but
those are not the only and decisive factors. Moreover The court talks about all parties
concerned, not simply parties to the contract of carriage. It seems that notion of all
parties concerned is wider and more general; hence potentially interests of the third
parties, outside the original contract, if they have any significance to the case should also
be taken into consideration.
The Reasonable Deviation will most probably be interpreted in some
accordance with traditional common law rules but permission to deviate for saving
property materially alters the situation, especially in the opinion of the Court in the Stag
Line, where the court held that the doctrine of deviation subsists even when Hague
Rules apply.142
Such provision threatens proper conduct of the carriage business. The main
purpose of carriers business is carriage of goods not the salvage operations. There is a
142

S.Baughen at 104

52

danger that carriers attracted by the salvage remuneration would engage too often in
salvage operations at the cost and risk of charterers. Therefore test for reasonable
deviation should also be applied in the cases of saving property. It must be noted, that
some authors, due to the recent developments in the case law and the interpretation of the
notion of the reasonable deviation tend to question the significance of the deviation at
all.143

143

see S. Baughen, Does Deviation Still Matter?, Lloyds Maritime and Commercial Law Quarterly 1991

53

IV. OTHER DUTIES OF THE CARRIER

IV.I. Duty to take reasonable care of Goods
The implied duty of the carrier to take care of the cargo had already been
established in the Common Law; where in McFadden v. Blue Star Line144 the court
stated If anything happens whereby the goods are damaged during the voyage the
shipowner is liable because he is insurer except in the event of the damage happening
from some cause in respect of which he is protected in his contract

145

One could

conclude that attaching liability of the carrier for the loss or damage to the goods, unless
expressly excluded in the contract, provides implied duty to take care of the cargo. In the
common law though both contractual provisions with liberty clauses, which released the
shipowner from the and the clauses expressly imposing the liability and the duty on him.
The Hague-Visby Rules introduce the new detailed regime of the duty. The
Article III (2) of the Rules, and respective national acts, provides:
Subject to the provisions of Article IV, the carrier shall properly and
carefully load, handle, stow, carry, keep, care for and discharge the goods delivered.
First of all it must be noted that carriers duty of care refers to the entire
period of handling of the goods. Not only entire period is covered by the provisions of the
Article III (2) of the rules, but all categories of possible activities involving cargo. From
loading, through keeping and care for, which are continuous duties, up to the discharge of
the cargo.
Secondly, what is striking in comparison with the provision of the HagueVisby Rules on the seaworthiness, is that the duty of care seems to be higher than mere
due diligence, as in the case of seaworthiness. The wording of the Article III (2) of the
Rules seems to confirm that. One must draw his attention to the requirement of properly
carrying out duties, which seems to attach higher level of care than just carefully. The
question, whether in fact the higher degree of care was required was raised in the
144
145

McFadden v. Blue Star Line (1905) 1 K.B. 697

Chuah, 222

54

Albacora v. Westcott and Laurance Line146, where the cargo of salted fish had been
shipped from Glasgow to Genoa. The crates containing fish were marked keep away
from engines and boilers, but no other instructions were given by the shippers. On
arrival in the port of discharge the fish were found damaged by halophilic bacteria,
because the temperature in the hold was more than critical 5C.147 The cargo owner
claimed damages, maintaining that the carrier was in breach of Article III (2) since the
fish could only be properly carried in refrigeration. He claimed, that the notion of
proper carrying referred to the appropriate manner in conjunction with the actual nature
of consignment, and it was irrelevant that the shipowner and ships officers neither knew
nor could have discovered that the special treatment was necessary. The Court held that
such interpretation of the words properly would lead to unreasonable result. Although
the court agree that the notion of properly and carefullyis was slightly different, he
concluded the interpretation presented by the cargo owner could not be accepted.
According to the court, in the context of the case properly meant in accordance with
the sound system. Adoption of the sound system should be conducted in the light of all
the knowledge, which the carrier has or ought to have had about the nature of the goods,
hence according to the court the shipowner had adopted the sound system, and in
consequence could not have been held liable. The Court stated:
In my opinion, the obligation is to adopt a system, which is sound in the
light of all the knowledge which the carrier has or ought to have about nature of the
goods. And if that is right, than the respondents did adopt the system. They had no reason
to suppose that the goods required any different treatment from that which the goods in
fact received.
The Court also noted that he sound system should not refer to all the
weaknesses and idiosyncrasies of the particular cargo, but to all circumstances in relation
to general practice of carriage of goods by sea.
In another case, International Packers London Ltd v. Ocean SS Co. Ltd148
the cargo owners brought a case against the carriers for the damage of their tined meat.
The damage took place due to two factors: the tarpaulins were not correctly fastened and
146

Albacora v. Westcott and Laurance Line (1966) 2 Lloyds Rep. 53

A.D. Hughes at 255
148
International Packers London Ltd v. Ocean SS Co. Ltd (1955) 2 Lloyds Rep. 218
147

55

were washed away. Consequently the water entered holds and damaged the cargo.
Another factor was subsequent advice of the surveyor, who had suggested that the tins
should have been left where they were, what led to rusting of them to rust.149 As the first
claim is concerned, the court stated that although there was a breach of an obligation the
carrier could use the exemption provided in the Article IV (2) (a) of the Rules, which
provides that carrier nor the ship shall be responsible for loss or damage arising or
resulting from act, neglect or default of the master, mariner, pilot, or the servants of the
carrier in navigation or management of the ship. As to the second allegation the court
held that although the default was on the part of the independent contractor, the carrier
was held liable, since according to the Court, obligation under Article III (2) of the Rules
extended to efforts taken to protect the goods from circumstances caused by an earlier
accident or danger, even if the earlier danger was an expected peril or was brought about
without carriers fault.150 This argumentation seems to be perfectly clear and reasonable
when careful analyze of the wording of an article III (2) is carried out. Once again it must
be emphasized that duties of the carrier set out thereof are comprehensive. One will come
to the conclusion that courts argumentation was right, especially in the light of the
obligation to care for the goods. This duty implies an obligation not only to prevent
destruction of the goods, but also include prevention from further deterioration of the
goods that had been affected due to events for which the carrier cannot be held liable.
IV.I.II. Carriers Defenses and immunities
Article IV (2) provides defenses for the carrier. Carrier is shielded from the
responsibility for the loss or damage to the goods if they result from one of the events
enumerated in the Article IV (2) (a-q) The list of exemptions is relatively comprehensive
and include:
(a)

Act, neglect or default of the master, mariner, pilot or the servants of the carrier in
the navigation or management of the ship;

(b)

Fire, unless caused by the actual fault or privity of the carrier;

(c)

Perils, dangers and accidents of the sea or other navigable waters;

149
150

Chuah, 287
id.

56

(d)

Act of God;

(e)

Act of War;

(f)

Act of public enemies;

(g)

Arrest or restrain of princes, rulers or people, or seizure under legal process;

(h)

Quarantine restrictions;

(i)

Act of omission of the shipper or owner of goods, his agent or representative;

(j)

Strikes or lockouts or stoppage or restrain of labour from whatever cause, whether

partial or general;

(k)

Riots and civil commotions;

(l)

Saving or attempting to save life or property at sea;

(m) Wastage of bulk of weight or any other loss or damage arising from inherent defect,
quality or vice of the goods;
(n)

Insufficiency of packing;

(o)

Insufficiency or inadequacy of marks;

(p)

Latent defects not discoverable by due diligence;

(q)

Any other cause arising without actual fault or privity of the carrier, or without the
fault or neglect of the agents or servants of the carrier, but the burden of proof shall
be on the person claiming the benefit of this exception to show that neither the
actual fault or privity of the carrier nor the fault or neglect of the agents or servants
of the carrier contributed to the loss or damage.
It must be emphasized that the burden of proof in the last exception is very

difficult and carriers usually tend to use one of the other exceptions provided in Article
IV (2) of the Rules.
The carrier may accept additional liability by resigning from some
aforementioned exceptions, but he is not entitled to limit his liability with some further
exceptions, added to the list. Article III (8) prohibits clauses, covenants, agreements
relieving carrier from the liability or limiting his liability for the loss or damage of to the
goods arising from negligence, fault or failure to the duties, otherwise than as provided in
the Rules. Exceptions other then provided in the Rules, particularly in the Article IV (2)
shall be null and void.

57

Article IV (2) (a) provides probably the most controversial exception. This
provision refers to crews negligence or default in navigation of the vessel. This provision
has been strongly criticized by the cargo owners interests and there is no equivalent
provision in any other transport convention.151 It should be emphasized, that all
exceptions should be interpreted narrowly, so should this one. As interpretation of the act,
default or neglect in navigation was clear and referred to direction of the vessel in the
route of voyage152. The notion of this duty was explained in The Ferro153 case as
something affecting the sailing of the ship.
As the notion of management of the vessel is concerned the issue seems to be
somewhat more complex. In the Goose Millerd Ltd v. Canadian Government Merchant
Marine Ltd154 the Court stated that where the act done in management is one which is
necessarily done in the proper handling of the vessel, but in the particular case the
handling is not properly done, but is done for the safety of the ship herself, and is not
primary done at all with the cargo, that must be a matter that which falls within the
words management of the said vessel
What one must find striking is the conjunction of the exemption of Article
IV(2)(a) and the notion of seaworthiness as far as adequate and competent crew is
concerned. It must be emphasized that the default or negligence of the master or the
crewmember must be distinguished from the unseaworthiness. If it is the vessel
unseaworthiness involved in the case the Article IV (2) (a) does not apply.155

151

J.F. Wilson, Carriage of Goods by Sea, 198

Chuah, at 288
153
The Ferro (1893) P 38
154
Goose Millerd Ltd v. Canadian Government Merchant Marine Ltd (1929) A.C. 223
152

155

Chuah, at 289

58

IV.II. Duty to proceed with due dispatch

The carrier is obliged to commence the voyage, proceed the voyage and
complete it with due dispatch.156 Regardless this duty is expressly provided in the
contract, or implied by law it is essential from the point of view of economic purpose of
the contract. As deviation threatens indirectly to the timely performance of the carriage
contract undue dispatch would jeopardize the performance of the carriage contract and
other linked contracts directly. Distinction between deviation and the duty to proceed
with due dispatch had been set in Freeman v. Taylor157 where the Court stated that
inasmuch as the freighter might bring his action against the owner, and recover
damages for any ordinary deviation, he could not, for such deviation, put an end to the
contract: but if the deviation was so long and unreasonable that, in the ordinary course
of mercantile concerns, it might be said to have put an end to a whole object the freighter
had in view in chartering a ship, in that case the contract might be considered to an
end. In this judgment court highlighted extraordinarily long and unreasonable deviation,
and practically excluded such situations from the traditional notion of deviation,
including the exemptions and liberty clauses for deviation.
The practical notion of this judgment of particular importance is that in cases
of particularly unfair deviations the exemptions could not be applied, since the new,
separate category of wrongdoing had been created.

156
157

Chuah, at 211
Freeman v. Taylor (1831) 8 Bing. 124

59

V. CONCLUSIONS
The contemporary maritime law is an extremely complicated legal system.
One of the most important, and at the same time complex issues in its scope is carriage of
goods. Variety of legal regimes, cultures and traditions in conjunction with risky nature
of the shipping business, uncertainty of the turnover and high possibility of contractual
default, create number of legal challenges. In the contract of carriage of goods by sea
there is an immanent conflict between interests of carrier (shipowner) and the shipper
(cargo owner). The clash between interest of the is inevitable, but at the bottom line
proper performance of the contract would be in the interest of both parties, hence never
has the balance shifted decisively on the favor of one party. Gaining more favorable
position as far as certain duties were concerned was respectively accompanied by
additional duties. In the duty to provide a seaworthy ship for example, an original
common law obligation of the carrier was absolute. It was replaced with the obligation
based on due diligence in The Hague and The Hague-Visby Rules, but the burden of
proof had been respectively switched as well. In the absolute duty to provide a seaworthy
ship burden of proof was on the cargo owner, claiming compensation for the loss or
damage to his goods; in modern maritime conventions it is still his duty to prove
unseaworthiness, loss or damage to the goods ant the link between them, but the
shipowner, who gained the benefit of changed scope of the obligation, limited to exercise
due diligence only must prove that the due diligence had been actually exercised.
Although the balance between is strived to be maintained, one can observe
development of the scope of carriers duties. Traditional common law tended to impose
stricter duties on the carrier, in particular as the duty to provide a seaworthy vessel was
concerned, which used to be an absolute obligation, or as the duty not to deviate was
concerned, as no deviation to save the property was justified. International maritime
conventions, and national laws implementing them had relieved those duties, by
introducing obligation to exercise due diligence in making the ship seaworthy and
allowing deviation for saving property at sea.
Another development was introducing the Hamburg Rules, which must be
noted. Although the major maritime countries are not signatories to the Hamburg rules,
since new convention generally favors the shipper, it must be noted that application of

60

two conventions would be complementary. Firstly the Hamburg Rules provide that they
are applicable when the port of loading or discharge provided in the contract is located in
the contracting state or the bill of lading is issued in the contracting state. One can easily
imagine the situation, where both parties of the contract were from the non-contracting
states and the Hamburg Rules would be still applicable.
On the other hand the importance of common law and more generally English
law must be emphasized. Firstly English law is often law of choice of the parties, due to
maritime tradition and impartibility, when the parties to the contract are not English.
Secondly common law will still play significant role in interpretation of modern maritime
conventions, due to its rich jurisprudence. In arbitration, often lex mercantoria is used,
which in maritime cases will use aforementioned traditions. Finally practical reason for
using English law is that worlds biggest maritime insurance and salvage company
Lloyds id based in the United Kingdom.
The question for future is how the duties of the carrier are going to develop?
It is not likely that major maritime states would adopt Hamburg Rules. It should be
observed that the difference between placing the parties powers under the two main legal
regimes is too critical to be easily overcame. It seems more reasonable not to switch to
Hamburg Rules too carelessly, since the carriers risk is higher and this might have
slowed trade development, when the carriers were held liable or exposed to frivolous
lawsuits.

61

BIBLIOGRAPHY
I.

BOOKS:

1. Simon Baughen, Shipping Law, 3rd ed., London 2004,

2. Steward c. Boyd, Andrew S. Burrows, David Foxton, Scrutton on Charterparties
and Bills of Lading, 20th ed., London 1996,
3. Jason.C.T. Chuah, Law of International Trade, 2nd ed., Sweet & Maxwell 2001,
4. Raoul Colinvaux, Carvers Carriage by Sea, 13th ed., Stevens&Sons, London
1982
5. A.D. Hughes, Casebook on Carriage of Goods by Sea, 2nd ed. Blackstone Press
1994,
6. E.R. Hardy Ivamy, Carriage of Goods by Sea, 13th ed., London & Edinburgh
1989,
7. Jan opuski (ed.) Prawo Morskie (Maritime Law), Bydgoszcz 1996
8. Sze Ping-Fat, Carriers Liability under the Hague, Hague-Visby and Hamburg
Rules, The Hague, London, New York 2002,
9. Thomas J. Schoebaum, Admiralty and Maritime Law, 3rd ed., Hornbook Series,
West Group, St. Paul, Minn 2001
10. John F. Wilson, Carriage of Goods by Sea, 4th ed., Longman 2001
II. Articles:
1.

Simon Baughen, Does Deviation Still Matter?, Lloyds Maritime and

Commercial Law Quarterly 1991, Lloyds of London Press Ltd 1991;

2.

Martin Dockray, Deviation: a Doctrine all at Sea?, Lloyds Maritime and

Commercial Law Quarterly 2000, Lloyds of London Press Ltd 2000

III. International Conventions:

1. 1968 Hague-Visby Rules;
2. 1978 UN Convention on Carriage of Goods by Sea (Hamburg Rules)

62

IV. National Legislation:

1. 1924 Carriage of Goods by Sea Act (UK)
2. 1936 Carriage of Goods by Sea Act (US)
3. Harter Act
4. 1971 Carriage of Goods by Sea Act

ABBREVIATIONS:
ITF- International Transport Federation
et al. et alii- and others
CGSA- Carriage of Goods by Sea Act of 1971 (UK)
COGSA- Carriage of Goods by Sea Act of 1936 (US)
LMCLQ- Lloyds Maritime and Commercial Law Quarterly
NAFTA- North American Free Trade Area
WTO- World Trade Organization

63