Containers and cargoes3 Heat damaged soyabeans –

problems with carriage to China

Legal6 The UK Supreme Court reconfirms

law on safe port warranties in charterparties The OCEAN VICTORY

7 Liability for cargo damage caused in consequence of charterers’ orders to delay

8 Responsibility for cargo handling operations

The Britannia Steam Ship Insurance Association LimitedRISK WATCH

Volume 24: Number 3

August 2017

Navigation and seamanship

5 Piracy: recent attacks indicate aresurgent threat to shipping

Crew injured byhigh pressuremachinery

Personal injury1 Crew injured by high pressure machinery

2 Stowaways: recent cases2 The importance of wearing a hard hat

Loss prevention4 Loss prevention seminars

Example 1A fourth engineer suffered burns to his righthand and forearm while changing the gasketof the waste oil tank steam heating line. Theengineer had closed the inlet and outlet valvesbefore opening the flange but he failed todrain the hot water which proceeded to splashonto his hands and face. In this case, althoughthe engineer was wearing protective gloves,the heat, combined with the quantity ofwater soaked through the protective layer ofthe gloves and caused his burns.

Example 2A carpenter sustained deep cuts to his fingerwhen he attempted to clean the nozzle of ahigh-pressure washer with his finger andaccidentally touched the washer trigger atthe same time. The crew member was wearingfull safety equipment at the time of theincident but the pressure of the water wasenough to cause the cuts.

Example 3An engine cadet suffered deep cuts to hisforehead while carrying out routinemaintenance to the ship’s main engineturbocharger. The cover flew off the gritwashing container due to a build-up ofpressure within the unit’s valves, which wereshown to be fully choked with grit andmoisture. As there was no pressure gauge onthe container, the attending crew wereunable to find out whether the unit had beendepressurised until the cover flew off. Thecontainer was also not in the vertical positionat the time, therefore the trajectory of thecover was at an angle as it flew off.

Luckily the cadet was wearing his helmet atthe time otherwise the incident could havekilled him.

The lesson to be learned from all of the aboveexamples is that a thorough risk assessmentshould always be carried out by crewundertaking tasks using high pressureequipment or during the repair/cleaning ofhigh pressure machinery to find out whatsafety equipment is required for each individualtask. In example 3, the risk assessment shouldhave included the following:

• Stop! • Think – what could go wrong? • Ensure everyone taking part or observing isaware of the job tasks and the potential risks• Could the container be under pressure?• If so, remove the cover with the utmost careto one side of the cap• Ensure that there is nobody in the immediatevicinity – look behind you!

The above examples also demonstrate theimportance of ensuring appropriate safetyequipment is worn at all times when operatingor working on high pressure equipment.

The dangers may not always beimmediately evident but the risk of injury issubstantial and the consequences canprove fatal. It is therefore of vital importancethat a thorough risk assessment is carriedout, safety procedures are strictly adheredto and vigilance is demonstrated by thecrew at all times.

The Club has recently seen several crew injuries which were caused whilecleaning, repairing or operating machinery with high pressure components.

The Convention on Facilitation of InternationalMaritime Traffic, 1965, as amended, which was adopted by the IMO in 2011, defines astowaway as:

‘A person who is secreted on a ship, or incargo which is subsequently loaded on theship, without the consent of the shipowner orthe master or any other responsible personand who is detected on board the ship after ithas departed from a port, or in the cargowhile unloading it in the port of arrival, and isreported as a stowaway by the master to theappropriate authorities.’

In recent months there has been an increasein the numbers of stowaways trying to boardships at West African ports. Recent incidentsinclude:

Example 1The ship completed cargo operations andproceeded out to the port anchorage. A shoreboat coming alongside reported that therewere stowaways in the rudder trunk. It isthought that the stowaways got on boardbefore the ship cleared the breakwater, at atime when no crew were likely to be presenton the aft deck.

Three stowaways were found and repatriatedashore by immigration authorities, howeverthe ship was still fined for having stowawayson board.

Example 2The ship completed cargo operations and theusual stowaway checks were carried out. Nostowaways were found on board. As the shipwas leaving the port area, a passing ferry boatreported that stowaways were seen enteringthe rudder trunk.

Local agents were contacted and assisted themaster in disembarking 10 stowaways. Theship was fined by the immigration authorities.

The ship is responsible for ensuring that allpersons coming on board are properlydocumented and permitted to be on board fora legitimate reason. However, it can be hardto see who might be a potential stowaway, as they often wear the same type of clothesas stevedores or other shore personnel,making it hard to detect and to challenge the stowaways. It is recommended that,where possible, the identities of thoseboarding the vessel are checked at thebottom of the gangway (i.e. before they step

foot on board) and that a thorough pre-departure stowaway search is carried out.

In addition to these so-called ‘professional’stowaways, there are reports of a number oflocal companies and individuals who assistpotential stowaways to gain access to theports and ships. Often a small gratuity to ashore watchman is all that it takes to allowunauthorised people to access the ship.

It is harder to detect stowaways who haveboarded the ship by the rudder trunk, andthis is when the assistance of a shore/pilotboat, or an observant and friendly passingferry is often essential.

It is advisable that stowaways are removedand landed from the ship as soon as possible,but even where this is possible, the fines andexpenses can be quite significant.

Seafarers and Members are reminded thatany stowaways found on board a shipmust be treated in accordance with theIMO guidelines. It is important to avoidany situation arising which could result inthe crewmembers being charged with anycriminal wrongdoing or negligence.

Stowaways: recent cases

Personal injury

Of all the types of PPE, a hard hat is the mostimportant and a recent case handled by theClub shows what could have happened if ahard hat had not been worn.

On 22 January 2017 the second officer wasadjusting the chain and lock of a valve whenhe was struck in the back by a wave thatentered the manifold.

He was washed against the stairs and suffered ahead injury. The impact was so severe that thehard hat he was wearing was seriously dented.

Luckily only a brief deviation was requiredbefore the second officer could be evacuatedby helicopter for emergency treatment.Examinations showed that he had suffered atraumatic brain injury and a laceration of hisfrontal scalp. Fortunately the injury provednot to be too serious and he was given the allclear to fly the next day.

Without the hard hat, the outcome mighthave been far worse and so the message isclear – always make sure that you arewearing the correct PPE.

The importance of wearing a hard hat

2 Britannia RISK WATCH Volume 24: Number 3: August 2017

In previous editions of Risk Watch and Health Watch we have talked about the importance of wearing thecorrect personal protective equipment (PPE).

Containers and cargoes

Claims of this nature can be relativelyexpensive because of the high value of asoyabean cargo.A review of the claimsencountered gives some practical pointers for consideration by the crew.

What’s the problem? There are two main problems encountered,both of which relate to pre-shipment qualityof soyabean cargo:

i) Soyabeans loaded at a temperature over30°C, with moisture content over 11.5% forvoyages over 20 days are at a high risk of self-heating and associated damage.

ii) Soyabeans may suffer heat damage orblackening prior to loading. Shippers mayseek to mitigate by mixing this with soundcargo. There is usually a tolerance in any cargofor off-spec or discoloured cargo, but it maybe difficult to determine on a visualinspection that cargo has, for example, lessthan 1% blackened beans (on spec) ratherthan 3% (off spec).

Poor ventilation during the voyage is oftenblamed for the damage arising. However, ifthere is sweat damage due to lack ofventilation, this is likely to affect only the toplayer of cargo in the stow. Where damage isspread more evenly throughout the stow, thispoints to a problem with the quality of cargoitself. However, Chinese courts may not acceptthis position, so precautions should be takenin advance if possible.

What precautions can be taken to avoidproblems?

Before loading• Extra care should be exercised by crewwhen loading soyabeans in South America or USA for carriage to China, in particular,after a rainy period, and where delivery willbe between August and October.

• Members should request a certificate ofquality from the shippers prior to loading, ifpossible. This should set out figures for themoisture content, foreign material, heatdamaged kernels, total damaged kernels andsplit kernels.

• If the shipper cannot provide a certificate,confirmation of the moisture content shouldbe requested in writing.

• Where there is any apparent risk of highmoisture content or pre-existing damage , orwhere a problem is actually observed, it maybe advisable to take joint samples of cargowith shippers at the loadport to ascertain theaverage moisture content and temperatureof the cargo. Samples can be retained foranalysis later in the event of a claim arising.

During loading• Check cargo thoroughly throughout loadingas different quality cargo may be presentedduring this process. Pay particular attentionto any apparent moist, blackened or cakedkernels.

• Take care during loading to closehatchcovers rapidly in the event of rain andto record any such activity properly in bothlogbooks and statements of facts.

• Cargo temperature and apparent conditionshould be checked and recorded wheneveroperations permit, for example during pausesin loading operations and in particular duringany longer delays that happen.

During voyage• Full ventilation records should bemaintained throughout the voyage. Theseshould take into account the ‘three degreerule’, which states that: ventilation can takeplace at any time when the outside airtemperature is at least 3 degrees cooler thanthe cargo temperature on loading. Theyshould record cargo temperature, airtemperature and accurate ventilation settingsduring both day and night.

• During the voyage, hatchcover drain valvesshould be checked for any condensationwhich may indicate self-heating. Anycondensation should be recorded.

• During the voyage, wherever possible, the condition and temperature of the cargoshould also be checked, always taking intoaccount safety and operational restrictions.

During discharge• As with loading, if there is any rainfall duringdischarge, this should be recorded andhatchcovers closed quickly.

• In the event that a problem with cargocondition is observed, Members shouldcontact the Club, who will arrange for asurveyor and any other experts to assist.

If the master or crew are in any doubt, theyshould not hesitate to contact the Club, vialocal Correspondents, who can provideguidance as may be required.

Heat damaged soyabeans – problems with carriage to China

3

Britannia Members have received several claims in recent years relating to heat damaged soyabean cargocarried to Chinese ports.

The seminars have been very well receivedand the format is constantly being updatedand adapted to meet the needs of ourMembers. The loss prevention team havetaken part in a number of public seminarsand also in our Members’ own officerseminars, visiting and presenting atMembers offices, which has been particularlypopular in south east Asia.

Technical seminars aimed at seafaringofficers and superintendents have been heldin Wuhan, Szczecin, Taipei and Manila. Theseseminars highlight the importance ofeffective risk assessments with an emphasison safety awareness. Recent topics coveredin the seminars have included:

• navigation errors and resourcemanagement, with a reminder of theprinciples of safe working procedures andpractices on board;

• cargo related matters, particularly relatingto dangerous goods; and

• other general areas of concern in themaritime industry, including MARPOLviolations and entry into enclosed spaces.

Loss prevention seminarsThe Club’s loss prevention department has been travelling around theworld to continue with its series of technical seminars.

The loss prevention team have also developedan interactive game which is sometimes usedin the seminars. In these scenarios, volunteersfrom the audience take part in role play whichhighlights the need for good risk assessmentson board. These role play sessions are lighthearted and fun but do have a very seriouspoint to make as effective risk assessmentscan prevent serious injury and fatal accidents.

Another aspect of the loss prevention team’sseminar initiative is the use of film to add anextra dimension to the presentations. Theteam have created two short film scenarios.One deals with bridge resource managementand is called ‘Navigation – Back to Basics’. The other highlights the potential problemsassociated with the use of ECDIS and is called‘ECDIS – an accident waiting to happen’. The films were produced in a full mission shipsimulator with the loss prevention teamplaying the various roles.

The ‘Back to Basics’ film was based on severalincidents on various types of ship, which were combined into a single scenario basedon a container ship. This type of ship was usedas we have noted a steady number ofincidents where container ships have made

contact with the quay and, in some cases,have damaged the container cranes.

The ECDIS film was based on a single incidentand taken from a UK Marine AccidentInvestigation Branch (MAIB) Report. The film isdesigned to demonstrate the incorrect use ofECDIS and also draws attention to the factthat there is a great variety of different ECDISmodels on the market, which are operated inmany different ways, with changes to theoperation and the menu.

The technical seminars are aimed at seafarersand superintendents as these are the peoplewho implement their company’sorganisational policies. However, we are awarethat seafarers’ efforts to manage and promotesafety on board their ships are defined andpotentially restricted by their Managers’ ownsafety culture and training. In order to try toaddress this, the loss prevention team haveadapted their seminar programme to includeseminars aimed at the actual decision makerswithin the Members’ company. These includethe senior management and the designatedperson ashore (DPA). So far these DPA seminarshave been presented in Singapore, Mumbai,Chennai, Hong Kong, Kobe and Tokyo.

Loss prevention

4 Britannia RISK WATCH Volume 24: Number 3: August 2017

Navigation and seamanship

Piracy: recent attacks indicate a resurgent threatto shipping

The theme of the recent DPA seminars hasbeen ‘Safety Culture and Risk Assessments’and participants have been asked toconsider their seafarers’ understanding andinterpretation of the company’s safetyculture, leading to discussions about howrisk assessments can be made moreeffective and also considering the legalresponsibilities of DPAs and seniormanagement in respect of theirobligations under the ISM Code.

The team have also started using electronicvoting devices to obtain feedback from theaudiences at the seminars. This feedbackhas shown that the senior management’sperception of training, safe workingpractices and safety culture may notalways be realistic. For example, around 8%of the 240 attendees indicated that safetyculture is included in their SMS andtherefore does not need to be specificallyaddressed with the crew. The conclusionsand findings from the seminars will becirculated to Members in the form ofarticles in Club publications and will bediscussed at these events in the future.

5

On 12 June the Combined Maritime Forces (CMF), a multi-nationalnaval partnership tasked with preventing piracy in internationalwaters, released a statement confirming that its naval presence in theGulf of Aden will increase.

Full details of the statement can be foundvia the following link:

www.goo.gl/pwG1vD

The CMF response follows several recentattacks on commercial shipping in theregion summarised below:

• On 16 May the Indian navy investigatedreports of two dhows and eight skiffs beingused for piracy activities in the Gulf of Aden.Three skiffs escaped at high speed, howeverthe remaining ships were searched andweapons and ammunition confiscated.

• On 31 May a tanker was fired upon in theBab al-Mandab Strait. The tanker wasdamaged in the attack. The onboardsecurity team returned fire and the piratesmoved away. Reports suggest one of the

attacking skiffs unexpectedly explodedduring the attack. The motive behind the useof explosives by the attackers is not yet clear.

• On 1 June another tanker was fired upon bysix armed pirates in the Gulf of Oman. Theonboard security team fired warning shotsand the pursuing skiffs moved away.

The above acts as a timely reminder thatpirates continue to pose a threat to ships inthe Gulf of Aden. Ships transiting high riskareas should continue to implement BestManagement Practices 4 (BMP4), full details ofwhich can be found on the Britannia PiracyFocus page at the following link:

www.goo.gl/4yh2fn

Legal

In May 2017 the UK Supreme Court issued itsjudgment in the OCEAN VICTORY and therebyconcluded several years of litigation in theEnglish courts as to the meaning of a safeport warranty in a charterparty. The disputearose out of the loss of a bulk carrier atKashima port, Japan in October 2006 in asevere gale.

SummaryThe Supreme Court upheld the 2015 decisionof the Court of Appeal which had found thatKashima was a safe port at the time whentime charterers had given voyage orders forthe ship to proceed there to discharge itscargo. As a result, the time charterers hadcomplied with the safe port warranty underthe time charterparty and therefore were notheld responsible for the subsequent loss of theship and cargo when the ship was at Kashima.

The Supreme Court also upheld the Court ofAppeal’s judgment on the separate issue ofthe effect of a co-insurance requirement underthe BARECON form of bareboat charterparty.The result was that the registered owners andbareboat charterers of the ship, as joint co-assureds under the ship’s hull & machineryinsurance policy, could not claim anindemnity from the time charterers for theloss of the ship. The liability of the bareboatcharterers towards the registered owners forthe loss was extinguished by payment of theproceeds of the H&M insurance policy so thatthe bareboat charterers and their subrogatedinsurers had no claim to make against thetime charterers.

Finally, the Supreme Court also reconfirmedthat under the Convention on Limitation ofLiability for Maritime Claims 1976 chartererscannot limit their liability towards the ownersfor loss of or damage to the chartered ship byreference to the tonnage of the chartered ship.

The factsOCEAN VICTORY was a bulk carrier owned by a registered owner and bareboat chartered to an associated company on a BARECON 89standard bareboat charter form. Standardclause 12 of the form (now clause 13 inBARECON 2001) required the bareboatcharterer to insure themselves and theOwners jointly for hull risks.

The bareboat charterer re-let the ship on timecharter to a third party. In September 2006the time charterers ordered the ship to load a cargo of iron ore in South Africa anddischarge at Kashima port, Japan. The shiparrived at the Raw Materials Quay at Kashima

in October 2006 and on 24 October the shipbegan to lose its moorings under the effect oflong waves and a severe gale. The ship triedto depart to seek shelter but grounded in theKashima port fairway and became a total loss.

The hull insurers paid the registered ownerscirca USD70 million for the loss of the shipand the insurers took an assignment of therights of the owners and bareboat charterers.The bareboat charterparty and the timecharterparty both contained safe portwarranties. The subrogated insurers brought a claim against the time charterers for allegedbreach of the safe port warranty and claimedthe insurance proceeds paid for the loss ofthe ship as damages.

To defend the claim the time charterersargued that Kashima was a safe port and thatthe loss had arisen as a result of an abnormaloccurrence; and also sought to defend theclaim by arguing that the bareboat chartererswere not liable towards the registered ownersto the extent that the loss claimed wascovered by the hull insurance taken outjointly by the registered owner and bareboatcharterer.

The judgmentCharterparty safe port warranties Under English law a port is safe if the particularship can reach it, use it and return from itwithout, in the absence of some abnormaloccurrence, being exposed to danger whichcannot be avoided by good navigation andseamanship.

The date for judging breach of the safe portwarranty is the date of nomination of the port.A safe port warranty is not a continuingwarranty. The warranty is a prediction aboutsafety when the ship arrives in the future andassumes normality at the port; given all of thecharacteristics, features, systems and a state of affairs which are normal at the port, at theparticular time when the ship should arrive.The question is whether the port isprospectively safe for this particular ship. If the answer is ‘yes, unless there is anabnormal occurrence’ then the safe portwarranty is complied with.

When the case first came before a judge of theCommercial Court in 2013, the judge decidedthat Kashima port was not a safe port becausethe two weather phenomena of long waves,and a very severe northern gale, were commoncharacteristics of the port, notwithstandingthat the judge found that simultaneousoccurrence of both of these two phenomenon,

which had caused the casualty, was a rareevent and had never apparently occurred inthe previous 35 years.

The Charterers appealed and at the appeal inJanuary 2015, the three judges of the Court ofAppeal said that the judge should haveconsidered whether the simultaneousoccurrence (‘critical combination’) of longwaves and a severe northerly gale made itdangerous for the ship to remain at the berth,but unable to safely leave, was an abnormalevent, or a normal characteristic of the port.

The Supreme Court agreed with the ‘criticalcombination’ test and said that an abnormalevent was something well removed from thenormal. It was out of the ordinary course andunexpected. It was something which thecharterer would not have in mind. Was thedanger rare and unexpected, or was itsomething which was normal for theparticular port for the particular ship’s visit atthe particular time of the year?

The evidence presented to the courts was thatno ship in the port’s history had beendangerously trapped by long waves at theRaw Materials Quay, with a risk of damage ormooring break out, at the same time as theKashima Channel was not navigable becauseof gale force winds.

The Court of Appeal, upheld unanimously bythe five judges of the Supreme Court,concluded that the ‘critical combination’ ofboth long wave and severe northerly gales atKashima was historically found to be a such arare event that it was an ‘abnormaloccurrence’, and so the Charterers were not inbreach of the safe port warranty.

Co-insurance of registered owner andbareboat charterer of hull risksThe decision that Kashima was a safe portmeant that it was not necessary for the Courtof Appeal or the Supreme Court to considerthe co-insurance defence raised by the timecharterers. Nonetheless, for completeness, theCourt of Appeal decided that the co-insuranceclause in the BARECON form of bareboatcharterparty was a complete code for thetreatment of insured losses as between theregistered owner and bareboat charterers inthe event of a total loss of the ship. Such that,even if the bareboat charterers had been inbreach of the safe port obligation in the charter,they were under no liability to the registeredowners because the owners had agreed tolook to the insurance proceeds rather than tothe bareboat charterers for compensation.

The UK Supreme Court reconfirms law on safe port warranties in charterparties The OCEAN VICTORY

6 Britannia RISK WATCH Volume 24: Number 3: August 2017

The logical consequence was that thebareboat charterers suffered no loss as aresult of any breach of the safe port warrantyand in turn the time charterers had no liabilityto the demise charterers. The time chartererscould thus escape liability for the loss of theship on the technicality of an agreementbetween the owners and the bareboatcharterers with which they had nothing to do.

The Supreme Court upheld this decision by amajority however two dissenting judgesargued persuasively that the co-insuranceclause only deals with the mechanics ofpayment of the insurance proceeds and notthe substantive rights of the parties andtherefore the co-insurance clause ought notto exclude a right to claim damages forbreach of contract.

Limitation of liability On the issue of limitation, the Supreme Courtjudges were unanimously of the view (in thetheoretical scenario that if charterers hadbeen in breach of the safe port warranty andheld liable) that the ordinary meaning ofArticle 2(1)(a) of the Convention on Limitationof Liability for Maritime Claims 1976 (‘claims

in respect of loss of life or personal injury orloss of or damage to property…occurring onboard or in direct connection with theoperation of the ship or with salvageoperations, and consequential loss resultingtherefrom’ )does not extend a right to limit aclaim for damage to the ship by reference tothe tonnage of which limitation is to becalculated. Therefore the charterers would not have been able to claim a limit of liabilityfor the loss of OCEAN VICTORY by reference to its tonnage.

ConclusionIn relation to limitation of liability under the1976 Convention the Supreme Courtreconfirmed previous case law that chartererscannot limit their liability for damage to orloss of the chartered ship by reference to thetonnage of that ship.

On the other hand the decision of theSupreme Court on the effect of co-insuranceof owners and charterers under a charterpartyis not yet settled because of the dissentingjudgments of the Supreme Court judges. Weunderstand that BIMCO are currently workingon an updated version of BARECON which will

include a response to this issue. Pendingadoption of the new version, charterersshould take legal advice on whether to amendthe BARECON form to protect the owners’right to claim against the bareboat charterersfor an insured loss.

In relation to safe port warranties theupholding by the Supreme Court of thedecision of the Court of Appeal is welcomefrom a charterers’ perspective, because theinitial decision of the Commercial Court had a draconian result in the case of a modern,purpose built port which nobody previouslyhad thought to be unsafe.

In summary, owners bear the risk of losscaused by a danger which is avoidable byordinary good navigation and seamanship by their master and crew. Charterers areresponsible for loss caused by a danger whichis predictable as normal for the particular ship at the particular time when the ship isanticipated to be at the nominated port andsuch danger is not avoidable by goodseamanship. Owners and ultimately their hullinsurers are responsible for loss caused by a danger due to abnormal occurrence.

7

A time charterer should think carefully aboutordering a ship to wait outside a dischargeport for a long period of time when thecharterparty incorporates the Inter-ClubAgreement 1996 (the ICA).

According to a recent decision of the HighCourt in The Yangtze Xing Hua [TransgrainShipping (Singapore) Pte Ltd v YangtzeNavigation (Hong Kong) Co Ltd [2016] EWHC3132 (Comm)] such an order may beconsidered an ‘act’ within the meaning ofclause 8(d) of the ICA. This means that if cargodamage occurs as a result of such an order,the ICA will allocate liability for any cargoclaim 100% to charterers.

Factual backgroundAs they had not been paid for the cargo, thecharterers ordered the ship to wait off thedischarge port for more than 4 months. Whenthe ship finally discharged the cargo in May2013, cargo damage was discovered. A cargoclaim was made against the ship. That claimwas settled and the owners then brought arecourse action against charterers under theterms of the time charterparty.

It was common ground that liability (asbetween owners and charterers) for the cargoclaim was to be apportioned in accordancewith clause 8(d) of the ICA which had beenincorporated into the charter.

Clause 8(d) provides that:a) liability for all other cargo claims whatsoeverare to be apportioned between owners andcharterers 50/50;

b) but if there is clear and irrefutable evidencethat the cargo claim arose out of the ‘act orneglect’ of one or the other, then that partyshall bear 100% of the claim.

The decisionAn arbitration tribunal held that the charterers’decision to keep the ship at the dischargeport anchorage for a prolonged period oftime was an ‘act’ falling within clause 8(d) ofthe ICA and so liability for the cargo claimwould be apportioned 100% to charterers.

The charterers appealed. The question of lawfor the court to decide was whether the term‘act’ in clause 8(d) meant a culpable act in the

sense of fault or whether it meant any act,whether culpable or not. In the court’sjudgment, the word ‘act’ in clause 8(d) wouldreasonably be understood to bear its ordinaryand natural meaning of any act withoutregard to questions of fault. In consequence,the court ruled that the tribunal’s constructionof ‘act’ in clause 8(d) was correct anddismissed the charterers’ appeal.

It is understood that there is an appealpending against the judgment.

We are grateful to William Stansfield fromThomas Cooper LLP for assistance with this article.

Liability for cargo damage caused in consequence of charterers’ orders to delay

8 Britannia RISK WATCH RISK WATCH is published by The Britannia Steam ShipInsurance Association Limited, and can be found atwww.britanniapandi.com/publications/risk-watch/

The Britannia Steam Ship Insurance AssociationLimited is happy for any of the material in Risk Watchto be reproduced but would ask that writtenpermission is obtained in advance from the Editor.

Tindall Riley (Britannia) LimitedRegis House45 King William StreetLondon EC4R 9AN

Tel +44 (0)20 7407 3588Fax +44 (0)20 7403 3942 www.britanniapandi.com

Editor’s messageWe are always looking for ways to maintain and increase the usefulness, relevance and general interest of the articleswithin Risk Watch. Please forward any comments to: rwatched@triley.co.uk

Legal

In November 2012 Risk Watch published anarticle summarising the responsibilities ofstow planners where a charterparty clausetransfers risk and responsibility for stowage ofcargo upon the charterers. This is commoncommercial practice, as seen for example inclause 8 of the NYPE 1946 time charter formand clause 5(a) of the Gencon 1994 voyagecharter form, which transfer responsibility forstowage to charterers. Even if the masterprepares or approves of the stowage plan, thecharterers will likely remain responsible forloss or damage caused by improper stowage,unless there is a significant intervention by theshipowners or the master. Two more recentcases are of useful guidance on this topic.

Stowage of steel coilsA cargo of steel coils was shipped from Chinato Russia under a Congenbill 1994 on termsthat incorporated the Hague Rules and also aGencon 1994 charterparty which wasincorporated into the bill of lading by thestandard Congenbill reverse wording ‘Allterms and conditions, liberties and exceptionsof the Charter Party…are herewithincorporated’.

Clause 5 of the Gencon charterparty providedthat ‘The cargo shall be brought into theholds, stowed and/or trimmed, tallied, lashedand/or secured by the Charterers, free of anyrisk, liability and expense whatsoever to theOwners’.

The master and chief mate prepared astowage plan for steel coils which proved tobe inadequate, because the plan omitted thelocking coils to secure the cargo. Localstevedores, who were employed by thecharterers, stowed the cargo without anylocking coils, however there was no evidencethat the stevedores had abided by themaster’s stowage plan. The master allowed

the ship to sail despite expressing concernafter completion of loading about the lack oflocking coils. The ship experienced adverseweather during the voyage causing it to rollmoderately to heavily. The cargo stow shiftedand coils were damaged. The cargo interestsbrought a claim in the High Court against theshipowners for failure to properly andcarefully load, stow, carry and care for thecargo. The Court found that the cargo shiftingand the resulting damage was caused by theabsence of locking coils. The stowage wasimproper because it was inadequate to meetthe foreseeable weather conditions duringthe voyage. The Court decided that theshipowners were not responsible for theimproper stowage because responsibility forstowage was transferred to the charterers andto cargo interests under clause 5 of theGencon charterparty, which, the Courtconcluded, was incorporated into the bill oflading. Nor was there any significantintervention by the master or shipowners inthe stowage because the evidence indicatedthat the stevedores, who were employed bythe charterers, had not abided by the master’sstowage plan but had stowed the cargoaccording to their own plan.

This case demonstrates that, where thecharterers are responsible for stowage, theymust be attentive to stowing and securingcargo in accordance with the cargo securingmanual. Even if a stowage plan is prepared bythe shipowners/master it must be carefullyreviewed by the charterers and theiremployed stevedores.The ‘EEMS SOLAR’ [2013] 2 Lloyd’s Rep 487

Carriage of rice in bagsA cargo of rice in bags were carried fromPakistan to the Ivory coast. The Hague Rulesand the Synacomex 90 form of charterpartywere incorporated into the bills of lading.

Clause 5 of the Synacomex charterparty formprovided that ‘Cargo shall be loaded, trimmedand/or stowed at the expense and risk ofShippers/Charterers at the average rate of1,500 metric tons per weather workingday…Cargo shall be discharged at theexpenses and risk of Receivers/Charterers atthe average rate of 1,500 metric tons perweather working day…Stowage shall beunder Master’s direction and responsibility’.

The cargo interests brought claims againstthe shipowners for bags torn during loading,carriage or discharge and for short delivery.The shipowners accepted that they wereresponsible for stowage under the master’sresponsibility provisions of Synacomex clause5, however the shipowners argued that thewords ‘expense and risk of Shippers/Charterersand ‘Receivers/Charterers’ meant thatresponsibility for loading and discharge wastransferred to the cargo interests orcharterers, and that, therefore, to the extentthat damage to the bags of rice was causedby bad loading or discharge (as opposed tobad stowage) that would be the responsibilityof cargo interests. The High Court agreed withthe shipowners that the words ‘expense andrisk’ of the cargo interests or charterers inSynacomex clause 5 did indeed have theeffect of transferring responsibility for loadingand discharging to the charterers and cargointerests, and therefore the shipowners werenot responsible for cargo damage to theextent caused by bad loading and dischargeof the cargo.

This case demonstrates that charterpartyprovisions as to ‘expense and risk’ of cargooperations such as loading, stowage anddischarge can transfer responsibility awayfrom the shipowners to the charterers orcargo interests for such cargo operations.The ‘SEA MIRROR’ [2015] 2 Lloyds Rep 395

Responsibility for cargo handling operations