Facts of the matter

On May 18, 2011, the container ship CMA CGM LIBRA ran aground while departing from Xiamen, China, en route to Hong Kong. The dispute between the ship’s owners and the cargo interests arose when the owners declared a General Average (GA) and the cargo interests refused to contribute.

The cause of the grounding was determined in the trial judgment as being “the faulty passage plan and the resulting negligence of the captain in deciding to navigate outside the marked channel”. The passage plan (which included the pro forma passage plan document and the vessel’s work card) was found to be faulty and the relevant charts did not note the necessary warnings indicating that the water levels were. shallower than those recorded.

The interests of the cargo had argued that these failures rendered the vessel unfit for navigation. This, they argued, meant that there was prosecutable misconduct on the part of the owners if they had not done their due diligence to provide a seaworthy vessel. As such, the owners lost their entitlement to GA contributions under the York-Antwerp rules.

The owners, on the other hand, had argued that faulty passage planning does not render a vessel unfit for navigation and that any failure should fall within the navigation error exception provided for in Article IV Rule 2 (a) of The Hague Rules “errors of crew, navigators or management of the ship”.

Proving that the owners had done their due diligence to provide a seaworthy vessel at the start of the voyage, the owners argued that it was enough for the vessel to be fitted with the necessary equipment and employ a competent crew to allow safe navigation.

Admiralty court decision

The owners sued the cargo interest for the unpaid GA contributions. The judge dismissed the owners’ request, ruling that the vessel was unseaworthy within the meaning of article III, rule 1 of the Hague Rules. To arrive at this decision, the judge applied the “prudent owner test”, namely “would a prudent owner have sent the vessel to sea with the defect in question without requiring it to be repaired, if he had any? had knowledge? “. Applying this test, which the judge called a conventional seaworthiness test, he concluded that a careful owner would not allow his vessel to leave with this flawed passage plan.

The judge also found that it was not enough for owners to simply employ a competent crew and provide the necessary equipment to fulfill their due diligence obligations. Instead, it was found that the owners were responsible for the actions of the crew in failing to use reasonable skill to prepare the passage plan adequately, and therefore the owners had not exercised due diligence. reasonable.

Decision of the Court of Appeal

The owners appealed, arguing that there are distinct and separate obligations regarding (i) the exercise of due diligence to provide a seaworthy vessel on the one hand, and (ii) matters of navigation and management of the vessel on the other hand, and that the crew’s navigation acts and nautical misconduct could not be linked to the carrier’s obligation to provide a seaworthy vessel.

The Court of Appeal dismissed the appeal, ruling that “a properly prepared passage plan is an essential document that the vessel must have in its possession at the start of any voyage. There is no reason why the absence of such a document should not make a ship unseaworthy ”.

Supreme Court decision

The owners appealed again. The questions submitted to the Supreme Court were as follows:

• Did the faulty passage plan render the vessel unseaworthy for the purposes of Article III Rule 1 of the Hague Rules? and,
• Whether the master’s failure to exercise reasonable skill and care in preparing the passage plan constitutes a lack of due diligence on the part of the carrier for the purposes of the Article III, Rule 2 of the Hague Rules?
Owners again sought to distinguish between due diligence and navigation issues. In addition, they argued that the seaworthiness obligation concerned the question of whether the ship was itself fit for the purpose of safe navigation. This, they said, concerned an attribute of the vessel, rather than something “extrinsic” such as a passage plan, which recorded a navigation decision.

The Supreme Court upheld the Court of Appeal and Trial Court rulings that the vessel was not seaworthy due to a faulty passage plan.

He concluded that the failure of the crew to navigate the vessel safely and to prepare an appropriate passage plan could constitute a lack of due diligence on the part of the carrier. Although the preparation of the passage plan is a matter of navigation, which could fall under the exception of Article IV, Rule 2 (a) of the Hague Rules, the exception could not be invoked in the event of a violation. of Article III Rule 1 of the Hague Rules “the carrier is required, before and at the start of the voyage, to exercise due diligence to render the ship seaworthy. “. Further, the court concluded that if the vessel was not seaworthy, it made no difference whether it was caused by negligent management of the owner or negligent navigation.

Other Supreme Court findings include:

The prudent owner test (see above) is an appropriate test of airworthiness.
Providing the necessary equipment and a competent crew is only one aspect of the owners’ obligation to provide a seaworthy vessel.
Confirmation that the owners’ obligation under Article III Regulation 1 to exercise due diligence to render the vessel seaworthy is not transferable. This includes when the task may have a navigation element, such as preparing a crossing plan. Consequently, the owners cannot subcontract or be released from their responsibility by delegating it to the crew.
Comment

The Supreme Court ruling is important in that it confirms the owners’ obligation under Article III of Regulation 1 to exercise due diligence to provide a seaworthy vessel, including ensuring that that proper passage planning takes place. Providing the necessary equipment and a competent crew does not by itself mean that owners have exercised due diligence.

In terms of wider applicability, it should be noted that this case was unusual and can be distinguished in several respects. The crossing plan was, for example, flawed in many respects, such as the inclusion of erroneous information, the wrong course plotting on the map, the failure of the proper under keel clearance calculations and, most importantly, a key warning. from the port authority advising mariners concerning unmapped shallows outside the dredged channel that are not marked on the maps or included in the passage plan.

Further, the master admitted at trial that if the crossing plan / maps had included a reference to unmapped shallows outside the channel, he would not have crossed that area. This was important because it confirmed the direct causal link between the faulty passage plan and the resulting negligence of the captain in deciding to navigate outside the dredged channel. (The Captain’s concession is also a salient reminder of the risk of cross-examination of witnesses at trial where such concessions or deviations from previously stated evidence can fatally undermine a case or push it down a very different path.)

These points emphasize that the question of causation, which is essentially a question of fact, is essential in cases like this. It is not sufficient for applicants to simply point out some or all insignificant flaws or omissions in a passage plan and allege unseaworthiness (recalling that the burden of proof regarding unseaworthiness lies with the interests of the cargo / applicants). Instead, such problems must be serious enough (for example, to endanger the safety of the ship) and be causative. The seriousness of such defects or omissions is likely to be fertile ground for further litigation, such as whether they meet the prudent owner test. This is likely to pay close attention to the facts in each case, which will then likely turn to arguments on whether any flaws or omissions were the cause of the loss suffered.

Another important point concerns the timing and the potential difference in liability with respect to (i) the work on the passage plan before the trip and (ii) the execution and monitoring of the passage plan during the trip.

Regarding the first, the Supreme Court concluded: “In view of the ‘essential importance’ of the passage planning for the ‘safety … crossing plan or if it does so with a faulty crossing plan which endangers the safety of the vessel. In other words, owners can be held liable for any negligence on the part of the master before the start of the voyage in preparing the crossing plan (and assuming the fault meets the criterion of the vessel). careful owner).

However, it was also stated: “If, for example, the causal negligence consisted of errors made by the master or the deck officers in performing or monitoring the planning stage of the passage during the voyage. , the carrier could at first glance rely on the nautical fault exception. ‘ In other words, owners cannot be held liable for negligence during the trip as they can claim the defense of Article IV, Rule 2 (a). The timing of any negligence could be of utmost importance.

Of course, this assumes that there were then no separate issues such as a faulty departure plan, incompetent crew, or a failure to put in place systems to monitor or execute the passage plan. Additionally, things could get complicated if there are potentially negligent acts both in regard to, for example, the preparation of the crossing plan and the actions of the crew during the voyage. This again highlights the issues of the factual matrix and causation, noting that each claim will need to be considered on a case-by-case basis.

Finally, the court confirmed that delegating the preparation of a voyage plan to the master does not relieve an owner of the responsibility for a breach of due diligence, and that it does not matter whether navigation is the responsibility of the master. the responsibility of the master and involves the exercise by the master of his specialized skills and judgment. While this may be of concern to owners in general, the court noted that the same is true for most of the work needed to make a ship seaworthy, for example, work done by ship repairers or the chef. mechanic on the ship’s engine. These are other people who have specialized skills and work to make a vessel seaworthy, and for whom an owner remains responsible for any failure to exercise due diligence in their work.
Source: The Standard Club