Agent responsible for depriving the interests of the cargo of the possibility of declaring general average – Newsletters
A Danish company (K) bought 1,995 pairs of shoes from a Thai manufacturer with a gross weight of 2,447 kg for € 59,232. K has booked the transport of the goods with a Danish forwarder (S). The shoes were loaded into a container for sea transport and S subcontracted the transport to a Danish shipping company which in turn subcontracted a Swiss shipping company which carried out the transport on the ship NN owned by a Swiss shipowner (R). The ship was carrying 3,222 containers.
On October 3, 2017, a fire broke out in two containers loaded on the bridge. The fire was extinguished by the ship’s crew. The container with the shoes was delivered to K on October 11, 2017, where the shoes were found to have been significantly damaged by water. K was not informed that this was due to a fire on board the vessel.
It was stated in the investigation report prepared by the surveyor appointed by R that the two containers in which the fire had started contained charcoal (for the water pipes). On October 3, 2017, smoke was detected in the containers and a fire alarm was triggered. The crew carried out the firefighting operation with water hoses and injected water into the burning containers. The firefighting operation caused water to enter cargo hold 1 where K’s container was stowed. It was reported that ash was visible on top of the containers in cargo hold 1 and that there was approximately “10 cm of water on top of the tank in cargo hold No. 1”. During a visit to the vessel, it was found that the hatches had been damaged by the heat generated by the fire. The cause of the fire was believed to be the self-igniting charcoal.
K and its insurers (cargo interest) brought an action against S and R in Danish court.
In support of its claim, the interests of the cargo maintained that the fire on board the vessel and the fire-fighting operation meant that K would have been entitled to claim general average on the ground that the damage caused to K’s cargo should have been offset by general average contributions from all parties involved in accordance with the York Antwerp general average rules. K argued that R was responsible for failing to inform K of the fire and for releasing all cargo on board, which deprived K of the possibility of obtaining general average contributions from other parties. interested.
S denied responsibility and argued that even though R was at fault, S was not responsible because she was not vicariously liable for R.
R denied responsibility and argued that:
- the firefighting operation did not constitute an act of general average because there was no common danger;
- all right to report the general average had been lost due to the fact that K had not declared the general average;
- R had no obligation to declare general average;
- K could have declared general average if he wanted to; and
- R (by virtue of the bill of lading issued for the carriage) had waived any obligation to exercise a lien on the cargoes on board and to collect a bond on the interests of the cargo concerned.
The court ruled that R was liable to K because he had failed to provide timely information about the fire and the firefighting operation in such a way that K was deprived of the possibility that he otherwise would have had to declare general average:
A fire aboard a container ship can quickly develop and endanger the vessel and its cargo. Regardless of the fact that the fire was limited to two containers, a general average according to Rule A of the York-Antwerp rules was present and the cargo was sacrificed for the common safety of property exposed to a common danger. It follows from the York-Antwerp III rule that damage caused to a ship and to a cargo, or to any of them, by extinguishing a fire on board the ship, is admitted as general average.
Even if R was not required to report general average, R should have informed the freight concerned of the incident in order to give it the opportunity to protect its interests. The court considers that R, by not informing K, breached his obligation to protect the interests of the cargo and, therefore, acted negligently towards K who was deprived of a real possibility of have damages compensated by means of general average contributions. It is therefore not disputed that K was not aware that the water damage to the cargo had been caused by the fire fighting on board the ship until the cargoes on board were delivered. to the owners of the cargo. Since the cargo interest in question is only liable for the general average contribution to the extent of the goods, but not personally, Article 465 of the Danish Merchant Shipping Act, it was impossible for K to obtain contributions in general average from these interests. For the general average contribution of cargo or other goods, the owner is responsible.
The court further found that S was vicariously liable to K for R’s liability and was S.
It follows from the judgment that a contracting carrier can engage its liability when a general average situation is deemed to have occurred if it fails to provide information to its customer on the concrete circumstances giving rise to the situation of general damage, even when the contracting carrier keeps no information on these circumstances. In many cases, no specific contractual rule will have been agreed between the contracting carrier and its carrier to apply in such cases.
The costs and resources required to collect security from a significant number of cargo owners as part of a container ship general average report will often be substantial and, in this context, losses resulting from damage minors to the cargo can be considered insignificant in comparison. However, this does not exclude the possibility that the freight concerned may seek to obtain compensation for its losses if it has not been informed of the circumstances which would have made it possible to declare general average and, by such means, to d ” obtain compensation for damage to the cargo.
For more information on this topic, please contact Jesper Windahl at WSCO Advokatpartnerselskab by phone (+45 3525 3800) or email ([email protected]). The WSCO Advokatpartnerselskab website can be found at www.wsco.dk.
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