MOUNT ISA MINES LTD V THE SHIP "THOR COMMANDER"

[2018] FCA 1326, Federal Court of Australia, Rares J, 29 August 2018

Carriage (goods) - Vessel suffering engine breakdown close to Great Barrier Reef - Seaworthiness - Vessel towed away from danger by volunteer pursuant to AMSA direction - Whether salvage operations - Salvage quantification - Partial delivery of cargo in port - Letter of indemnity - Substitution of vessel under charterparty - Whether charterparty or bill of lading governing contract of carriage - General average contribution - Liability of cargo in general average where shipowner at fault - Hague Rules - Carriage of Goods by Sea Act 1991 (Cth), Schedule 1A - York Antwerp Rules

On 13 January 2015, the general cargo vessel Thor Commander suffered an engine breakdown on a voyage from Chile to Townsville in Australia and drifted towards the Great Barrier Reef. General average was declared. Salvors were engaged, but in view of the urgency of the situation, the Australian Maritime Safety Authority (AMSA) issued a notice requesting vessels to assist. Without entering into an LOF, the capesize Xinfa Hai assisted by towing the vessel away from the reef for five hours until salvors could get there. The Thor Commander was at the time carrying Mount Isa's cargo of copper anodes at a value ten times that of the vessel herself. She had been substituted under a charterparty from a pool, but had different owners than the original vessel. Once she had been salved, she was taken to Gladstone where some of the cargo was delivered to Mount Isa against one of the original bills of lading and a letter of indemnity. This was to keep production at the copper refinery going. Questions arose as follows: what carriage contract applied between Mount Isa and the shipowners: the bill of lading or the charterparty? Was Mount Isa entitled to recover from shipowners salvage of US$1 million paid to Xinfa Hai under a salvage settlement? Did the letter of indemnity preclude Mount Isa from recovering transhipment costs? Was Mount Isa liable in general average? The Hague Rules at issue were the Rules as enacted by the Australian Carriage of Goods by Sea Act, referred to as the "amended Hague Rules".