Carriage of goods by sea: cargoworthiness and the duty to provide a sea worthy vessel

Introduction:

The doctrine of seaworthiness is of paramount importance in admiralty law relating to the usability of a ship. In simple words, a sea worthy vessel is a ship which passes all safety checks and other relevant tests in order to sail safely. Making sure of the seaworthiness of the ship is an indispensable duty, ensuring safety of not only the goods which a ship might be carrying but also the safety of the workers/passengers on board and for availing insurance amount in case of any accidents through the Maritime Insurance Act.

Seaworthiness is an abstract concept in the sense that it is a relative term whose meaning is dependent upon the service which a ship or vessel is due to undertake. Other than actually being in a condition to undertake a sea adventure, it must also be duly prepared to undertake or have room to undertake activities of the trade for which it was intended. In short, it must be fit for use for the intended activity[1]. For example the carriage of goods by sea: the shipping industry thrives on the transport of goods through water in ships which accounts for nearly 90% of the world trade movement. In the instance of a contract of affrightment, which involves the transportation of goods by sea, the concept of seaworthiness is not merely the warranty of physical fitness of the ship but also the ability of the ship to carry the specific cargo. This dimension of seaworthiness is called the ship’s cargoworthiness. Therefore, by the standards of a fit cargo ship, a vessel might be tight, staunch, and strong and in every way prepared for safe navigation- all the attributes of a physically fit ship, but at the same time it may still be unseaworthy with regards to its inability to properly store and carry the cargo for which it has been chosen[2]. It is the duty of the shipoweners/carriers to ensure that they provide seaworthy vessels, failing which, they would be held liable for any loss or damage done to the cargo. Therefore, the duty of the carrier to provide a seaworthy vessel is divided into two parts: The first one deals with the vessel’s physical or structural fitness of the vessel and the second part deals with the ability of the vessel to receive the cargo and deliver it to its final destination safely. This paper is an exploration of the cargoworthiness as a part of the concept warranty of a sea worthy vessel. An attempt will be made to answer the following questions in particular: What is the scope of the duty of cargoworthiness? And whether there can be any limitation of liability on such a duty? Lastly, the paper will also look at future developments which might change the current existing laws and rules regarding seaworthiness completely.   

Evolution of the duty of seaworthiness: strict liability to due diligence

It is often the perception that shipowners are at a privileged position compared to the cargo owners and that they have greater scope for negotiating terms of the contract according to their own interests in order to gain profit. The duty of ensuring seaworthiness is a protection granted to the cargo owners and their goods from malafide intentions of the shipowners, balancing both of their interests. In the beginning of this paper it has already been established that in the case of carriage of goods, the duty shipworthiness includes ensuring cargoworthiness as well.

Under common law, the duty of ensuring seaworthiness of a vessel is an absolute duty which imposes strict liability on the carrier in case of a failure to execute their duty. This does not mean that the carrier is under an obligation to provide a ship perfect for any kind of sea adventure. It just has to be ideal for the type of trade that it is contracted for. This includes taking into account the nature of water the ship is going to be sailing through, the kind of cargo that it is supposed to carry and predicting other perils and difficulties of the sea that the vessel is likely to encounter. The strict liability placed on such an obligation of ensuring the seaworthiness of the ship therefore makes the carrier responsible for any casualties resulting out of unseasworthiness of the ship regardless of their fault unless an express agreement reliving the carrier out of such liability is made between the parties[3].

However, the nature of strict liability imposed on the doctrine of seaworthiness has evolved throughout the years and currently is understood differently in the context of important international treaties such as the Hague-Visby rules[4], the Hamburg Rules[5] and the Rotterdam Rules[6]. The result being that several other jurisdictions which modelled their domestic admiralty and maritime law based on them, also adopted the same approach- a shift from strict liability to the exercise of due diligence. First introduced in the domestic maritime law of the United States, in the Harter Act, 1893[7] which then became a part of the Hague-Visby rules[8] and the subsequent international treaties governing the carriage of goods by sea also adopted the same approach. Due diligence ascribes a positive obligation on the carriers as well as a defense when events occur making the vessel unseaworthy such that those events could not be reasonable foreseen. The duty of due diligence placing strict liability on the carrier/shipowner however still applies in instances where the above mentioned international conventions rules are not applicable, i.e. in case of charterparties, where common law still applies, unless the parties agree otherwise. Taking due diligence refers to taking all possible measures that can be foreseen by the carrier or the agents of the carrier that can be prudently taken at the time keeping in mind the knowledge available at that time[9], in order to make the ship fit for the journey it is supposed to undertake. This is an objective test since it is a standard that cannot be a hard rule and instead differs from a case to case basis.

Therefore to answer the first question posed in the paper, cargoworthiness being a subdivision of seaworthiness when it comes to carriage of goods shares the same standard of duty. And as discussed in this section, even though in common law it has strict liability to be placed on the shipowner, there is a shift now to due diligence.

Vessel seaworthiness:

As established above first dimension to the concept of seaworthiness, is the ability of the vessel to sail for the journey. This category is judged and evaluated based on certain criterion such as

  1. Whether it is physically fit- this includes taking all reasonable measures to make sure that the vessel type, its equipment and the type of waters the ship is going to sail in is all taken in account and the ship is prepped accordingly with the amount of existing knowledge that is available to the carrier at that time.
  2.  Whether there are enough skilled crew on board- unless it is an automated ship, the amount of human expertise and skill required for a ship voyage is indispensable. Human error in maritime casualties constitute is of considerably large proportion. Therefore, having appropriate number[10] of competent crew required for a ship’s safe journey. The test for establishing competence of crew is an objective one[11]
  3.  Whether all relevant document regarding the trade activity being carried on by the ship is duly stored on board.

Cargoworthiness

Meeting the standard of a vessel being cargo worthy, is being able to meet all general requirements that all cargo carrying vessels should have plus the addition requirements with regards to the specific cargo that the ship has been contracted to carry, if the requirement exists as such. The obligation of the carrier to provide a cargoworthy ship need not be an express provision in the contract as the duty if ensuring seaworthiness of the vessel covers the aspect of cargo as well as was stated in the case of Steel v. State Line[12]. Not meeting the appropriate standard of cargoworthiness could be because of two reasons: firstly, the ship might not be prima facie capable of carrying the cargo or it could be rendered un-cargoworthy due to bad stowing of the goods, i.e., the ship maybe seaworthy in terms of structural fitness and cargoworthy both but still be rendered unseaworthy because of bad stowage of goods.

Possibility of exemptions and limitation of liability

Exclusion and/or limitation of liability of such an important duty of seaworthiness even though is not impossible, it is however, still subject to a lot of conditions. The carrier can either contract out of the responsibility, i.e., include an explicit clause in the contract stating that the non-requirement of the carrier to ensure seaworthiness or exclude the duty to exercise due diligence, or limit his liability by limiting the damage that he would have to pay for in case any damage is suffered by the cargo on board because of his failure to ensure seaworthiness.

In case the carrier wants a complete exclusion of his duty in order to escape any liability relating to seaworthiness, the wording of such interest must be explicit in the charter party or the bill or landing as the case maybe, since the courts apply a high standard of scrutiny and do not usually read between the lines to give an interpretation of the contract which it doesn’t explicitly states. Additionally, under the Hague/Hague-Visby rules, such an option of contracting out of the duty is not permissible.

Since the duty of ensuring seaworthiness can often be very wide and vague, many contracting parties choose to specifically mention in their contracts what the carrier is specifically supposed to ensure. In this way also there can be the scope of limiting the liability of seaworthiness especially when talking about cargo related duties. Therefore, unseaworthiness resulting from bad cargo stowage operation could be the fault of either the carrier or the cargo owners or even a third party as the case maybe. Under common law it is the carrier’s, his agent’s or servants’ duty to carry out the loading and stowage operation. However, there is nothing in the law to prevent the parties from agreeing to transfer this duty to the shipper/Charterer/Cargo -owner. The master of a ship, working as an agent of the carrier is under an obligation to supervise the loading, stowing etc. operations of the cargo to discharge the duty of ensuring that mistakes done during those activities does not render the ship unseaworthy. This could also be called the duty of care owed towards the cargo on board. This duty of care is enumerated in article II of the Hague-Visby rules and article 5 rule 1 and 4 of the Hamburg Rules. This is part of exercising due diligence as discussed previously. If the responsibility of stowing had been shifted to the cargo owners by way of contractual agreement, then bad stowage leading to damage the goods but did not cause harm to the ship’s ability to carry the goods, then the carrier cannot be made responsible for the damaged cargo. The safety of the cargo need not be ensured by the carrier if the responsibility of handling them was shifted to the other party however, if in the contract, there was a provision for the master of the ship to supervise or the responsibility the cargo related activities was assigned to the master (this does not include instances where the damage caused us not a result of any other omission or act on the actions of the cargo owner or representatives of the owner (exemption only as per Art. III Rule 2 of the Hague-Visby rules). The conclusion is that in any case, whether the responsibilities regarding the cargo was on the cargo owners or the carrier, the duty of ensuring seaworthiness of the ship which includes its ability to carry cargo safely is on the carrier and will be held liable for even the damages resulting out of stowing undertaken by the cargo owners if it render the ship unseaworthy. This includes the master’s right to intervene in cargo handling activities[13] since ensuring the safety of the vessel an overriding responsibility of the master of the ship[14].

Period and scope of liability under international conventions and rules

The duty of ensuring the standard of seaworthiness might seem as a relatively strict and non-negotiable liability that is placed on the shipowner/carrier if when they engage in any sort of trade. But the period from which the liability attaches itself to the carrier can have major implications regarding the said duty, whether the shipowner/carrier is to be blamed in the first place or not. Under common law and the Hague-Visby rules, the responsibility to exercise due diligence in order to ensure vessel and cargo seaworthiness is only limited to the period before and right at the beginning of the journey it is supposed to undertake. This excludes the time in between during the voyage. However, unlike the Hague-Visby rules, under the Hamburg Rules, there is no express provision stating the duty of seaworthiness but contains a provision stating that the shipowner or the carrier ought to be responsible for any damage while the goods are in his possession which means that it covers the entire duration of journey and not just the beginning. Under the recent Rotterdam Rules, it adopts the same viewpoint of Hamburg rules where the period from which the duty of due diligence in ensuring shipworthiness is put on the shipowner/carrier cover the entirety of the voyage, including before and at the beginning of the voyage[15].

Owing to developments in the shipping industry, it was felt that maritime accidents due to human error, leading to massive economic destruction, loss of life and pollution had to be managed and regulated to ensure greater safety as well as help in decreasing the amount of litigations that arise due to such accidents. The International Safety Management Code (ISM) and International ship and port facility security (ISPS) which were developed later on to establish an international standard of ship safety on waters, on board and on the dock etc., talks about the standard of due diligence to be followed with regards to the concept of seaworthiness. They were not made a part of the widely accepted and followed Hague-Visby rules but were made mandatory under the Safety of Life at Sea Convention (SOLAs). And as Ahmad Hussam Kassem puts it, getting certificates from complying with this code, could be used as proof of due diligence measured taken by a prudent the shipowner/carrier in terms of making their ships seaworthy in order to not cause accidents[16]. Both the codes therefore, deal with the concept of seaworthiness but did not introduce anything new, they just emphasized the existing practice.

Seaworthiness and the case of automated vessels

Technology is developing rapidly and it is not while right not it may not seem to be an immediate need for a conversation on automated vessels and seaworthiness, it is probably going to be a reality earlier than we think it is. For example Rolls Royce has already been involved in some collaboration with different companies to build automated or remotely operated ship[17]. Proponents of automated ships argue drop accidents since they’re mostly caused by human error, reduced carbon emissions and reduction in all thins will automatically lead to reduction in costs. Firstly, the whole concept of seaworthiness and the duty to exercise due diligence is based on the fact that errors may be committed by humans. Secondly, the established criterions for checking vessel health such as whether it has proper number of skilled crew on board etc. will not be present. Therefore, there may manifest a gap in the regulations with relation to seaworthiness of automated ships. Standard for judging cargoworthiness might not be affected as such because while the journey undertaken by a ship would be remote, the loading, stowing, discharging etc. work would still be done by humans in a prudent manner.  

Conclusion

The concept of cargoworthiness must be thought of as a part and parcel of the concept of seaworthiness in the carriage of goods by sea. It is a promise to take reasonable care of goods that the cargo owners send and therefore, it deserves to have a standard of rigidity to it in the sense that it should be upheld in all instances and especially since it has evolved and moved on from strict liability application. This ensures balance of interest between the carrier and the cargo owners. There needs to be further improvements made to match the pace of technology with regards to automated ships and seaworthiness.


[1] Texaco Inc. vs Universal Marine

[2] Read v. Page, [1927] 1 K.B. 743

[3] Steel et Al. v. The State Line Steamship Company, (1877-78) L.R. 3 App. Cas. 72

[4] International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (1924) Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, 1968

[5] Instead of using the exact term due diligence, it mentioned that duty of taking reasonable measures

[6] United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea adopted in December 2008

[7] Harter Act, 1893

[8] International Convention for the Unification of Certain Rules of Law relating to Bills of Lading (1924) Protocol to Amend the International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, 196 Art III (1)

[9] Demand Shipping Co. Ltd. v. Ministry of Food Government of the People’s Republic of Bangladesh and Another, (The Lendoudis Evangelos II), [2001] 2 Lloyd’s Rep. 304.

[10] Hongkong Fir Shipping Company, Ltd. v. Kawasaki Kisen Kaisha, Ltd, [1961] 1 Lloyd’s Rep. 159.

[11] The Roberta, (1938) 60 Ll. L. Rep. 84. Lord Justice Greer at p. 86

[12] Steel et Al. v. The State Line Steamship Company, (1877-78) L.R. 3 App. Cas. 72

[13] Court Line v. Canadian Transport (1940) 67 Ll.L.Rep 161.

[14] Transocean Liners Reederei G.m.b.H. v. Euxine Shipping Co. Ltd., (The Imvros), [1999] 1 Lloyd’s Rep. 848

[15] United Nations Convention on Contracts for the International Carriage of Goods Wholly or Partly by Sea adopted in December 2008, Article 14

[16] Ahmad Hussam Kassem, ‘Legal aspects of seaworthiness: current law and development’ (Doctoral thesis, Swansea University 2006)

[17] ‘Developing the world’s first fully remotely controlled commercial tug’ (The Maritime Executive 23 February 2021) https://www.maritime-executive.com/article/developing-world-s-first-fully-remotely-controlled-commercial-tug accessed 10 November 2021

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