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Deck Cargo and the Hague-Visby Rules

This recent decision deals with an issue of whether the Hague-Visby Rules applied to a carriage contract in circumstances where the cargo was carried…

Sideridraulic Systems Spa and another v BBC Chartering & Logistics GmbH & Co KG (The “BBC Greenland”) [2011] EWHC 3106 (Comm) (Andrew Smith J)

This recent decision of the Commercial Court deals with an issue of whether the Hague-Visby Rules applied to a carriage contract in circumstances where the cargo was carried on deck.

A number of sand filter tanks were carried on deck on the “BBC Greenland” from Italy to Alabama. One of the tanks was lost and another damaged during the voyage resulting in a claim of some US$400,000. The cargo was shipped under a bill of lading containing some Master’s Remarks on the face of the bill. These stated among other things that all cargo had been loaded from an open storage area, that “All cargo was carried on deck at the shipper’s/charterer’s/receiver’s risk”, that any warranty of seaworthiness was expressly waived and that in all other respects was subject to the provisions of the US COGSA 1936. Claims were brought against the carriers by the cargo interests.

There were various jurisdictional issues between the parties, but the central issue for the Court was whether the Hague-Visby Rules applied to the bill of lading contract. Although there was no dispute the tanks had actually been carried on deck, they would only qualify as ‘deck cargo’ (and thereby be excluded from the Rules) if the contract of carriage stated they were being carried on deck (Art.1 (c)). The cargo interests argued the master’s remark was uncertain and did not expressly say that the tanks had actually been carried on deck. 

However, the Judge dismissed this argument holding that the ordinary and natural meaning of the remarks pointed to all the cargo having been loaded on the deck. The Judge found further support for this from evidence of a previous course of dealing between the parties regarding earlier shipments of material which has also been carried on deck. The tanks carried on the vessel were ‘deck cargo’ in relation to the Rules.

The Judge also dealt with a further argument that, even if the tanks were deck cargo, the Rules still applied because of sections 1(6) and 1(7) of the UK’s COGSA 1971. These provisions indicate the Rules shall still have the force of law over deck carriage if the bill of lading contract expressly provides the Rules shall apply. The Judge again dismissed this argument, referring to the standard form provision in clause 3 on the reverse of the bill which provided that the Rules would be incorporated only in circumstances where they were “compulsorily applicable”. The Rules were not so compulsorily applicable to this shipment from Italy to the United States and accordingly did not apply to the contract of carriage for the deck cargo.

The decision illustrates the importance of carefully considering such notations and master’s remarks on a bill of lading when considering the issues of jurisdiction and liability for a claim.

Terry Donaghy
Partner
Marine & Transit Team
Weightmans LLP