Shipping Law Governs the Relations and Risks and Liabilities

The expression seaworthiness is broadly elucidated by the judges and critics [1] it doesn’t merely mean that the carrier has to provide a seaworthy vessel to fight common perils of the sea. It was held in Elder, Dempster and Co v Paterson Zochonic and Co. Ltd [2] “the shipowner who agrees to transport goods by sea thus warrants that the ship will not only be seaworthy in the ordinary sense i.e. It will be tight stanch and tough and practically is fit to face any threats expected during the voyage but also the ship and the furniture and all the machinery will be fit to the agreed cargo.” [3] In AEReed and Co Ltd v Page, Son and East [4] , Lord Scrutton LJ claims seaworthiness is applied in two ways

Fitness of the ship to enter on the planned voyage and

Fitness of the ship to receive the agreed cargo as a carrying container

Hence it can be noted that the carrier undergoes two tests of providing seaworthy ship:

A good built up ship which can fight the common threats of the sea.

Cargo Worthiness.

The shipowner is under an implied obligation to provide a fully equipped ship which is suitable for the carriage of cargo. The ship-owner must provide refrigeration system in the ship if he is in contract to carry frozen meat, there is an ‘implied warranty’ that the ship and the refrigeration is fit to decided voyage. [5] The carrier is also under an implied obligation to employ adequate and capable crew to control the ship. Valid certifications to prove the seaworthiness and perfect physical condition of the ship must be carried in the ship [6]

At the commencement of voyage or each voyage, if the vessel will take one or more than doctrine of stages [7] the ship must be seaworthy. Does this mean that the carrier is obligated to provide seaworthy ship only at the beginning of the voyage? If yes then the carrier will not be responsible if he verifies that seaworthy ship was provided at the beginning of the voyage.

Hague–Visby Rules [8] imposes and holds the carrier accountable before and at the beginning of the voyage to exercise due diligence to make the ship seaworthy.

It can be noted that Common law and HVR go hand in hand and concur that carrier’s obligation begins when the voyage commences [9] though the obligation in Common Law is an absolute one. The burden of proving that the ship was unseaworthy is difficult and hence the carrier can’t be held responsible for a long period after the journey begins and reaches its destination.

The carrier is obligated to provide a seaworthy ship [10] . Only the nature of the duty varies however the personal integration remains same under common law and the Hague/ Hague- Visby Rules [11] . The difference between both is, the duty under common law is absolute while in HVR a duty to apply due diligence is bestowed. If the HVR doesn’t apply, the carrier remains under the absolute duty.

The absolute duty imposed by the common law on the carrier to provide seaworthy ship though being strict doesn’t interpret that the carrier has to make available the faultless ship. In President of India v. West Coast Steamship Co [12] , it was held that the carrier should supply a ship that can survive the usual threats of the sea, bearing in mind the type of water, ship and time of travel etc. The ship should be fit for the purpose of sailing, only proving that efforts were made to make it seaworthy is not sufficient. Lord Blackburn alleged in Steel et Al. v The State Line Steamship Company [13] that this absolute duty means “that where there is a contract to carry goods in a ship, whether that contract is in the shape of a bill of lading, or any other form, there is a duty on the part of the person who furnishes or supplies that ship, or that ship’s room, unless something be stipulated which should prevent it, that the ship shall be fit for its purpose. That is generally expressed by saying that it shall be seaworthy” [14]

The carrier will be hence exempted from the losses if he has furnished such a vessel and will clear his obligation, provided he was accountable for violation of his duty to implement due care for the cargo or in storing the cargo [15] . However in the Kapitan Sakharov [16] the carrier will be liable for unseaworthy condition of the vessel which aroused from bad storage, although physically seaworthy and cargo seaworthy ship was supplied.

Therefore for the protection of the ship, its goods and employees the duty will expand to guarantee that there is no hazardous cargo on the ship also to ensure that bad storage will not make the ship unseaworthy. The carrier can however seek exemption by inserting an appropriate exclusion clause in the contract of carriage to eliminate his liability for providing an unseaworthy ship although the duty is an absolute one.

US Harter Act 1893 [17] is the pioneer of the duty to exercise due diligence to stabilise the interest amongst the carriers and the cargo owners. If the cargo owners suffered any losses or damage it could defend them as at that time the exercise of the duty was not a positive obligation. HVR [18] later implemented the positive obligation to exercise due diligence. In The Muncaster Castle [19] a duty to exercise due diligence surpassed the absolute duty to provide a seaworthy vessel. In the case where rules do not apply absolute obligation still applies, i.e. Common law still applies to case of Charterparties except the parties consent. Furthermore it is evident in Carriage of Goods by Sea Act 1971 [20] that ‘there shall not be implied in any contract for the carriage of goods by sea to which the Rules apply by virtue of this Act any absolute undertaking by the carrier of the goods to provide a seaworthy ship’. [21]

Lord Keith of Avonholm expressed ‘the carrier will have some relief which, weighed in the scales, is not inconsiderable when contrasted with his previous common law position. He will be protected against latent defects, in the strict sense, in work done on his ship, that is to say, defects not due to any negligent workmanship of repairers or others employed by the repairers, and, as I see it, against defects making for Unseaworthiness in the ship, however caused, before it became his ship, if this could not be discovered by him, or competent experts employed by him, by the exercise of due diligence.’ [22]

To investigate whether the carrier, or his servants or agents, to man performed due diligence to provide a seaworthy vessel Lord Justice Auld in The Kapitan Sakharov [23] instituted an objective test. The standard of due diligence fluctuates as per the facts, the information accessible during the time of performing duty and conditions of the case. Due Diligence can be defined as: the efforts of the prudent carrier to take all reasonable measures that can be possibly taken, in the light of available knowledge and means at the relevant time, to fulfill his obligation to provide a seaworthy vessel.

The importance of exercising due diligence arises when the shipowner attempts to use the exemptions in Art IV r2 of the HVR or to prove his innocence or the exemption clauses of the contract of carriage [24] , in order to exempt himself from liability if the vessel commenced its voyage in an unseaworthy condition. Because, if the shipowner could prove that he exercised due diligence to make the vessel seaworthy [25] then he will not be responsible if it turns out to be unseaworthy.

On the contrary, when the cargo is loaded it is not enough ship being seaworthy. The carrier will still be held liable if the ship becomes unseaworthy before sailing and after the cargo is loaded. [26] According to Chuah the duty takes effect at the time of loading so far as ‘cargoworthiness’ is related. Hence one can anticipate that the ship is fit to occupy cargo at the moment when it is loaded.

If the duty to provide a seaworthy ship does not extend for the entire voyage it is worth highlighting, if at the time of sailing the ship was seaworthy and later befalls unfit this will not be a breach of duty on carrier’s party to provide seaworthy ship. [27] On the contrary the carrier will be liable for the loss occurred if the ship was repaired by being unseaworthy to seaworthy before sailing and the ship turns unfit after it sails. [28]

It will be difficult to maintain the ship if the route of voyage is in different geographical territories and stages. The condition of ship may fluctuate if the part of journey is through river, rough sea with high tides and calm sea. This might hamper the condition of the sea. Hence we need to be clear with the general rule which expects that the carrier may either make the ship fit for whole journey or make it fit at the beginning of each stage of the journey

The court was of the opinion in the case of The Vortigem [29] the ship was unseaworthy because it didn’t had sufficient fuel to suffice the journey. The court also observed that it has become a routine to split long journeys into parts to refill the ship with fuel which is feasible practice and also obeys the warranty of seaworthiness which is associated at the beginning of the journey [30]

How appropriate and diligent functioning of the contract and confidence of business revenue

be secured if doctrine of stages is considered is a puzzle? The legal necessitate of warranty of seaworthiness is superseded if doctrine of stages are oppressed. This problem was addressed by the court by ordering the owners to decide acceptable stages [31] in the case of Northhumbrian Shipping Co v Timm. [32] At the beginning of the journey the carrier or his agents should plan bunkering stages, if he fails to do he looses with defence of doctrine of stages and an opportunity to defend himself from liability.

If the ship is hired under time charter doctrine of stages doesn’t apply to every separate voyage. In this case it is implied warranty if at the beginning of the journey the vessel was in seaworthy condition for the hired period, the warranty of seaworthiness doesn’t apply at starting of each voyage stage [33] .

In McFadden V Blue Star Line [34] the court alleged it is breach of the warranty of cargoworthiness if the fault was present before goods were loaded. This action divides the stages of voyage. The warranty is associated when the goods are loaded to confirm that ship is seaworthy to accept the goods, it mainly relates to stowage and cargoworthiness. [35]

AE Reed & Co Ltd v Page, Son & Easn Ltd [36] explicates one major concerns in doctrine of stages which is pre-sailing operations, the defendants in this case pleaded that warranty of seaworthiness was not assigned when the ship descended as the mishap occurred before ship sailed and also they appealed insufficient equipment was not the cause of damage, the actual cause was overloading. The court ruled out that factors like accident during shipment, damage unrepaired at beginning of the new stage and initiating the voyage with same damage comprises unseaworthinesss at the beginning of the voyage. [37]

It can be analysed from the cases discussed above the significance of doctrine of stages in duty to furnish a seaworthy ship. A vital modification in the notion of seaworthiness is offered by bunkering and loading stages.

The carrier is free from obligation to provide a seaworthy ship provided its loaded with coal for whole journey.

The warranty is expanded and includes action that occurred after the ship sailed. [38]

The Common law presents a noteworthy amendment in the rules [39] which relates to doctrine of stages. The Rules provide “before and at the beginning of the voyage” ‘obligation to exercise due diligence in making the ship sea worthy’ this Rules sets a continuous duty from start of the loading up to sailing. [40]

The ship was damaged and the cargo owners had to claim to recover costs in Makedonia [41] . They alleged due to inadequate bunker the ship was unseaworthy. However it was observed that the carriers didn’t violate Art III (I) and accomplished all the duties hence were protected from burden. The court observed that the carriers duty is to perform due diligence in managing appropriate bunkers in immediate port.

Maxine Footwear Co Ltd v Canadian Government Merchant Marine Ltd [42] clarifies the concept of the ‘time scope’ of the obligation of Hague-Visby Rule. The court ruled in this case that nature of duty is continuos and the carrier was compled to perform due diligence to make rge ship seaworthy during the whole period from starting of the loading and start of the voyage. The term “before and at the beginning of the voyage” indicates the period from no less than beginning of the loading until the ships sails the court described.

The phrase ‘before the voyage’ as per the court should not be misunderstood as ‘at the beginning of the loading’ it comprises entire stage before sailing.

The rules of shipping do provide that carriers are under several duties to the shipper. The first of these duties starts in booking a space with the carrier for transportation of items with a particular vessel. If a shipper has booked such a space in a particular vessel, and that space is reused, then the shipper is able to claim damages for breach of contract if the shipper then goes on to refuse to carry the items by the carrier. [43]

In this note however it must be pointed out that the statement that the duty to provide a seaworthy ship does not apply once the ship has set sail, as stated by Chuah in the statement above, might not necessarily be seen to be accurate in all circumstances. The fact is that the common law of bailment requires that when goods are delivered, they are in the same condition, condition being defined both by quality and by quantity, as when they received. This implies that the carrier is not simply allowed to state that he was not under a duty to ensure the seaworthiness of a ship once it has set sail, for if damage is found to goods then the first person a shipper will look to for the purpose of attributing liability is the carrier

As such, it is clear that the carrier continues to be under a duty as to the condition of the ship used to transport the cargo even after a ship has set sail. A distinction can be seen in the fact that the duty a carrier is under after the ship has set sail is seen to be under a ‘reasonableness’ duty rather than the absolute one that previously exists. This reasonableness duty means that one can take into account the degree of knowledge that the carrier actually possesses or is considered reasonable to possess given all the circumstances, and is a much more flexible and subjective duty than the absolute duty. [44]

Furthermore, it must be noted that a carrier not only bears liability for damage caused to goods under usual contractual principles and under the laws of bailment, but also under the laws of negligence. The law of negligence (or the law of tort) provides that a carrier is considered to be under a duty of care to shippers and must ensure that the goods he is carrying are transported to the destination adequately. As such, as stated by Chuah, it may very well be true that the carrier is not required to ensure that the ship is in a seaworthy state after the ship has sailed to an absolute as extent as it is required to do before the ship sails. However, the law in tort provides that a relative duty at least continues. The duty is considered to apply to any of those who have a proprietary or pessory interest in the goods he is carrying. This means that under negligence, a carrier is not only liable for any damage caused to the goods to the shipper, but also to the person who has purchased the goods. This can therefore considered to be another instance where the provisions of the common law surpass the protections provided for by the Hague-Visby rules and the liabilities they impose on carriers. [45]

It is apparent from the case law that the burden which rests upon the ship owner to exercise due diligence to make a ship seaworthy is not a light one. [46]

In conclusion, it can be seen that the questions of what duties a shipper is under with regards to the seaworthiness of a ship is tied to the question of allocation of risks and liabilities of damage. The common law rules and the Hague-Visby rules can in fact be seen to provide for different standards. The common law rules provide that there is an absolute duty on a ship-owner to ensure the seaworthiness of the ship before the ship sails, and this absolute duty ends once the ship has sailed. This can be seen to be quite an extensive duty, and one that imposes quite an onerous burden on any carrier which is subject to the common law rules. It can be contrasted with the Hague-Visby rules which provides that there is only required to be a due diligence standard of a carrier with regards to ensuring the seaworthiness of a ship. This is a more reasonable standard, but the common law rules have the advantage of ensuring legal certainty as it is always known who will bear liability for specific damage done matter what event occurs, which therefore results in less litigation with less associated costs.

However, it must be noted that the matter is not as simple as stating that a shipper is no longer under an absolute duty once a ship has sent sail. While an absolute duty does not exist once the ship has sailed, there is still a duty of reasonableness. Thus a carrier is under a duty to ensure that damage is not caused to goods by the risks posed by other goods under the laws of contract. He is also deemed to be liable for any goods that arrive at a port in a different condition to that they were in when they were shipped unless it can be shown that the damage caused to the goods were from a cause that fell outside his control under the laws of bailment [47] . Furthermore, under the laws of negligence, a carrier can be seen to bear liability not only to the shipper of goods but also the purchaser of those goods – indeed the remit of negligence law goes wider than this and provides that there is a duty of care to anyone who has a proprietary interest in the goods. Chuah’s statement can therefore be seen to be valid but must not be misunderstood as implying that carriers’ duties towards shippers with regards to seaworthiness of ships ends once the ship has set sail. The question of common law rules is in any case much less important nowadays given that most transactions and shipping are governed by the Hague-Visby rules rather than the common law rules of shipping.

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