Lloyd's Maritime and Commercial Law Quarterly
BAD STOWAGE OR UNSEAWORTHINESS?
Cia Sud American Vapores v. MS ER Hamburg
Where cargo is so badly stowed as to imperil the safety of the vessel, a difficult question arises as to how any resulting loss or damage, to either the vessel or its cargo, should be categorized. Is it due to the bad stowage or to the unseaworthiness caused by the bad stowage? The answer to this question will prove critical to the question of who should bear responsibility for the loss under a time charter under which the charterers have accepted responsibility for stowage. This issue recently came before Morison J in Compania Sud American Vapores
v. MS ER Hamburg Schiffahrtsgesellschaft mbH & Co KG
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A vessel, while under time charter on an amended New York Produce Exchange (1946) form, sustained severe damage as a result of an explosion of a container of calcium hypochlorite that had been stowed on board adjacent to a bunker tank. The shipowners claimed US$63 million in respect of this damage, and also for loss of hire, while the charterers counterclaimed for US$12 million. There were two rival contentions as to the cause of the explosion. The first was that the cargo was inherently unstable and volatile; the second was that it became unstable during the voyage due to its stowage adjacent to a bunker tank which was heated during the voyage. When the matter came before Morison J, no finding had been made as to which of these contentions was correct. On the assumption that the second scenario applied, Morison J had to determine which party would be liable for damage caused by improper stowage rendering the vessel unseaworthy, in the light both of NYPE, cl 8, which provides “Charterers are to load stow and trim the cargo at their expense under the supervision of the Captain”, and of Art III, r 1 of the Hague Rules, incorporated by a clause paramount.
The arbitrators’ findings on the stowage issue
The arbitrators found that the container should not have been stowed next to a bunker tank. The Chief Officer had been negligent in that, had he understood the computer programme he was using, he would have realized that the location of the container was
1. [2006] EWHC 483 (Comm); [2006] 2 Lloyd’s Rep 66; [2006] 2 All ER (Comm) 1; [2006] 1 CLC 683; 2006 WL 690629 (QBD (Comm)). Morison J also held that a shipowner could rely on the defence of neglect or default in the management of the vessel provided by the Hague Rules Art IV, r 2(a) when cargo had sustained damage due to excessive heating on the voyage of bunker tanks adjacent to where it was stowed. The heating of the bunker tank was a single act, to facilitate the transfer of oil from it to the engines, and did not relate in any way to the care of the cargo, albeit it may have indirectly adversely affected it. This aspect of the decision is not considered in this note.
LLOYD’S MARITIME AND COMMERCIAL LAW QUARTERLY
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