The exceptions (Article IV (2))

“ Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from:

(a) act, neglect, or default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship;”.

Cargo interests generally find this exception unfair.

The master and crew are employees of the carrier and therefore working under the control and direction of the carrier. However, if by their negligent act they cause loss or damage to the cargo while navigating or managing the ship, the carrier does not have to pay compensation to the cargo owner.

This exception extends to pilots who might be guiding a ship into or out of port and other servants of the carrier.

chapter 8 Recoveries

It is very important to understand the limitation of the term

‘management of the ship’ and the distinction between managing the ship and caring for the cargo.

Several decisions made in the English courts will help in this respect.

■ In one case, the carrier failed to keep the hatches properly covered with tarpaulins while the ship was being repaired with cargo on board. Rain entered the holds and damaged the cargo. The carrier was not entitled to rely on the above exception;

covering the hatches was not an act of managing the ship but of caring for the cargo.

■ In another case, mismanagement of refrigerating machinery by the crew led to damage to the cargo. As the sole purpose of the refrigeration machinery was to keep the cargo cool, its mismanagement was a failure to care for the cargo, not an act of mismanaging the ship.

On the other hand, a breakdown of the ship’s engines caused by the negligence of the chief engineer or the ship running aground or colliding with another ship as a result of a lapse of concentration on the bridge would both be classed as negligence in the ‘navigation or management of the ship’.

The carrier would then be excused liability for any damage to the cargo that might result (unless the claimant could prove that the carrier had failed to exercise due diligence to make the ship seaworthy at the start of the voyage and that the unseaworthiness

was the cause of the engine breakdown, grounding or collision).

The remaining exceptions are largely self-explanatory:

"(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;

(d) act of God;

(e) act of war;

(f) act of public enemies;

(g) arrest or restraint of princes, rulers or people, or seizure under legal process;

(h) quarantine restrictions;

(i) act or omission of the shipper or owner of the goods, his agent or representative;

(j) strikes or lockouts or stoppage or restraint of labour from whatever cause, whether partial or general;

(k) riots and civil commotions;

(l) saving or attempting to save life at sea;

(m) wastage in bulk or 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 the 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.”

The most commonly used defences in practice are negligence in navigation or management of the ship, fire, perils of the seas and inherent vice.

Perils of the seas requires particular comment. A peril of the sea is generally considered to cover fortuitous accidents or casualties peculiar to transportation on the sea such as stranding, sinking, collision of the vessel, striking a submerged object or encountering heavy weather or other unusual forces of nature. But the term should not be interpreted too liberally.

If, for example, waves wash across the ship in very heavy seas and enter through the hatch covers, the carrier would not be able to rely on a defence of perils of the seas if the reason the water entered the hatches was that they had defective seals.

Similarly, a shift of cargo in the hold in heavy seas might not be a peril of the sea if the cargo had not been properly stowed or secured in the first place.

A difficulty for any recovery agent is that courts in different countries will interpret the term in their own way and what might be a perils of the seas defence in one country might not be a defence available to the shipowner in another.

!

The exception in (q) seems, on the face of it, to give the carrier a defence against pretty much anything else that is not included in (a) to (p). However, the burden of proof remains firmly on the carrier to show that the loss or damage was not their fault. Thus, if cargo was presumed to have been sound when loaded to the ship by reason of a clean Bill of Lading having been issued but was found to be damaged at the time of discharge and there are no clues whatsoever as to how the damage occurred, then the defence in (q) would be of no help to the carrier;

they would be liable.

Always remember that the burden of proof applies if the carrier wants to rely on the (q) defence.

To end this section it is necessary, because of its importance, to emphasise the relationship between Article III (1) (the duty to exercise due diligence to make the ship seaworthy, etc) and the exceptions in Article VI (2).

The carrier cannot rely on any of the exceptions where the loss or damage is shown to have been caused by a lack of due diligence to make the ship seaworthy before and at the beginning of the voyage.

The following example shows the distinction:

Example

A ship runs aground on rocks that are clearly shown on navigational charts. Cargo suffers loss or damage as a result.

■ If the ship had sailed without having the correct charts on board, then there was a lack of due diligence to make the ship seaworthy at the commencement of the voyage. The carrier will be liable for the cargo damage and will not be able to rely on the exception of ‘negligence in navigation’.

chapter 8 Recoveries

■ If the ship had sailed properly prepared and fully seaworthy and the grounding was due to a mistake on the bridge then the carrier would be able to rely on the defence of

‘negligence in navigation’.