Australia: Alize decision highlights duty of ship owners to ensure seaworthiness

Last Updated: 19 August 2019
Article by Stuart Hetherington

In brief - Cargo interests successfully establish that defective passage plan causative of unseaworthiness

Alize 1954 and CMA CGM SA v Allianz Elementar Versicherungsa AGC and Others [2019] EWHC 481 (Admlty) concerned a dispute between the owners of a container vessel which grounded whilst leaving the Port of Xiamen in China and the claim made in general average by her owners against cargo interests. A small percentage of the cargo interests refused to pay the claim asserting that the vessel was unseaworthy by reason of the fact that she had an inadequate passage plan, which was the cause of the casualty and that the owners had not exercised due diligence to make the vessel seaworthy.

The evidence in the case was given some seven to eight years after the events in question, which made the reliability of the lay evidence somewhat problematical.

The passage plan had been prepared by the second officer. It was contained in two documents, the first being a document provided to the vessel by the owners in which the plan was to be recorded and the second being the vessel's working chart. The first consisted of five pages plus the relevant tide tables and an Under Keel Clearance calculation.

The vessel carried a Voyage Data Recorder and the track of the vessel was reconstructed using the appropriate software. There was also an audio recording of what was said on the bridge, which had been transcribed and made available to the Court.

Expert opinions were given on behalf of both parties to the litigation.

In the course of his judgment, Mr Justice Teare rejected an argument on behalf of the cargo interests that following the decision of the Supreme Court in the United Kingdom in the case of Volcafe Limited (2018) 3 WLR 2087 the burden lay on the owners to prove that the general average expenditure had not been caused by a breach of Article III rule 1 by proving that the vessel was seaworthy, or that if it was not due diligence had been exercised or that any unseaworthiness was not causative. That submission was rejected by the Court on the basis that the Volcafe case was concerned with Article III rule 2 and not Article III rule 1 of which the present case was concerned.

Mr Justice Teare identified a number of deficiencies in the passage plan, perhaps the most significant of which was that an area outside the charted fairway should have been noted as a "no go" area on the chart. Mr Justice Teare found that neither the passage plan nor the chart contained the necessary warning and was therefore defective or inadequate and imprudently so.

The next question was whether that amounted to unseaworthiness.

Defective passage plan also considered in Sanko Harvest case

Interestingly the judgment refers to the fact that it had been submitted by counsel in the case that "there was no previous case in which it had been held that a defective passage plan rendered the vessel unseaworthy". It should be noted that in the case of the Sanko Steamship Co Ltd and Grandslam Enterprise Corporation v Sumitomo Australia Ltd & Ors (1996) 63 FCR 227, Sheppard J in his judgment deals at length with the failures of the second officer in relation to passage planning and correction of charts, generally with the route chosen by the second officer and the master to enter Esperance via an area of the sea which had been marked on the charts "dangerous to navigation" and relied on such matters in finding the owners liable to the cargo interests. (Whilst not referred to in the judgment, a section of the written submissions made by the cargo interests is headed "Failure to properly plan the passage").

In a section headed "Unseaworthiness" generally the cargo interests identified in submissions the sections into which its submissions had been divided as B (Failure to correct charts), C (as all being relevant to considerations about the unseaworthiness of the vessel). It is true to say that Sheppard J does not specifically identify in his judgment that the inadequacy of the passage planning itself amounted to unseaworthiness but clearly that was the tenor of his judgment.

He found that "the loss of the vessel was due to grossly negligent conduct on the part of its crew, particularly its master and second officer. There is no real dispute between the parties that that is the case" and "For the purpose of dealing with at least one of the submissions made on behalf of the defendant (the cargo interests), it is necessary to emphasise the heinousness of the shocking piece of navigation which led the vessel to the rock upon which it eventually founded. It is no exaggeration to say that the master and second officer of the vessel made a conscious decision to make a frontal assault on the Archipelago of the Recherche. This they did contrary to clear and explicit warnings about the dangers of such a course for any vessel let alone a vessel of moderately deep draft of the size of the Sanko Harvest especially when fully loaded."

Owners' failure to prepare adequate passage plan was a failure to exercise due diligence

Mr Justice Teare held that in 2011 the prudent owner would have insisted on such a passage plan before the voyage was commenced. He held: "The vessel was, in my judgment, unseaworthy at the beginning of the voyage". (The "Sanko Harvest" had grounded in February 1991 and to the best of the writer's recollection Professor Moreby and Captain Beetham, who gave evidence for the cargo interests, highlighted in their evidence the necessity for good passage planning. In particular, Captain Beetham had referred to a Department of Trade (UK) guide which had been practised on many ships.)

Having found that the master and second officer failed to prepare an appropriate passage plan the next question for Teare J's consideration was whether by the exercise of due diligence the master and second officer could reasonably have prepared an appropriate passage plan. He said (at [101]) "it must follow from my finding that they could have done so."

Teare J therefore found that the cargo interests had established causative unseaworthiness and the owners failed to establish the exercise of due diligence to make the vessel seaworthy.

Stuart Hetherington
Marine insurance
Colin Biggers & Paisley

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