Alize 1954 and CMA CGM SA v Allianz Elementar Versicherungs AG and 16 Ors

JurisdictionEngland & Wales
JudgeLord Reed,Lady Arden,Lord Briggs,Lord Leggatt,Lord Hamblen
Judgment Date10 November 2021
Neutral Citation[2021] UKSC 51
CourtSupreme Court
Alize 1954 and another
(Appellants)
and
Allianz Elementar Versicherungs AG and others
(Respondents)

[2021] UKSC 51

before

Lord Reed, President

Lord Briggs

Lady Arden

Lord Hamblen

Lord Leggatt

Supreme Court

Michaelmas Term

On appeal from: [2020] EWCA Civ 293

Appellants

Timothy Hill QC

Alex Carless

Michal Hain

(Instructed by Reed Smith LLP (London))

Respondents

John Russell QC

Benjamin Coffer

(Instructed by Clyde & Co LLP (Guildford))

Heard on 7 and 8 July 2021

Lord Hamblen

( with whom Lord Reed, Lord Briggs, Lady Arden and Lord Leggatt agree)

1

This appeal concerns the scope of a shipowner's obligation to exercise due diligence to make a vessel seaworthy. The seaworthiness obligation is fundamental to all contracts of carriage of goods by sea. At common law the carrier was under an absolute obligation to provide a seaworthy vessel. Today the seaworthiness obligation is invariably governed by the terms of the parties' contract or by statute, such as the UK Carriage of Goods by Sea Act 1971. The present case concerns the seaworthiness obligation imposed by article III rule 1 of the Hague Rules, a 1924 international convention for the unification of rules of law relating to bills of lading. It is in the same terms under the Hague Visby Rules, the Hague Rules as amended by the 1968 Brussels Protocol. The Hague or Hague Visby Rules have been ratified by more than 95 states across the world. Where not compulsorily applicable, they are widely contractually incorporated into bills of lading, charterparties and other contracts of affreightment, often through a clause paramount.

2

The main issue raised on the appeal is whether, as the appellants contend, the carrier's obligation under the Hague Rules is subject to a category-based distinction between a vessel's quality of seaworthiness or navigability and the crew's act of navigating. It is said that there is a distinction between seaworthiness, which concerns the attributes and equipment of the vessel, and the navigation and management of the vessel, which concerns how the crew operates the vessel using those attributes and equipment. A further and related issue arises in relation to the obligation of due diligence. It is the appellants' case that so long as the carrier has equipped the vessel with all that is necessary for her to be safely navigated, including a competent crew, then the crew's failure to navigate the vessel safely is not a lack of due diligence by the carrier.

3

The factual context in which these issues arise is the grounding of the appellants' container vessel CMA CGM LIBRA on leaving the port of Xiamen, China, on a voyage to Hong Kong. The Admiralty Judge, Teare J, found that the vessel's defective passage plan was causative of the grounding and that this involved a breach of the carrier's seaworthiness obligation under article III rule 1 of the Hague Rules. His decision was upheld by the Court of Appeal. The appellants (“the owners”) contend that the decisions of the courts below were wrong, that the vessel was not unseaworthy and/or due diligence was exercised, and that any negligence in passage planning was a navigational fault which is exempted under article IV rule 2(a) of the Hague Rules.

1. THE FACTUAL BACKGROUND
Passage planning
4

The Guidelines for Voyage Planning adopted by Resolution A893(21) of the International Maritime Organisation (“IMO”) on 25 November 1999 (“the Guidelines”) were to be brought “to the attention of masters of vessels, … shipowners, ship operators, shipping companies, maritime pilots, training institutions and all other parties … for information and action as appropriate” (2nd resolution). As the judge held (para 87), they involve recognition of the need for passage planning to be adopted by “all ships engaged on international voyages” (5th recital). They state that “the development of a plan for voyage or passage, as well as the close and continuous monitoring of the vessel's progress and position during the execution of such a plan, are of essential importance for safety of life at sea, safety and efficiency of navigation and protection of the marine environment” (Objective 1.1). They identify four components of passage planning: appraisal, planning, execution and monitoring.

5

The appraisal stage requires “all information relevant to the contemplated voyage or passage” to be considered. This should include “appropriate scale, accurate and up-to-date charts to be used for the intended voyage or passage, as well as any relevant permanent or temporary notices to mariners and existing radio navigational warnings”. The appraisal “should provide a clear indication of all areas of danger” and of “those areas where it will be possible to navigate safely”.

6

The planning stage requires a detailed berth to berth passage plan to be prepared on the basis of the “fullest possible appraisal”. The factors which should be included in the passage plan include “the plotting of the intended route or track of the voyage or passage on appropriate scale charts” with an indication of “the true direction of the planned route or track” and “all areas of danger”. The details of the passage plan “should be clearly marked and recorded, as appropriate, on charts and in a voyage plan notebook or computer disk” and its details “should be approved by the ships' master prior to the commencement of the voyage”.

7

The execution stage involves executing the voyage in accordance with the plan or any changes made thereto and the Guidelines list various factors which should be taken into account “when executing the plan, or deciding on any departure therefrom”.

8

The monitoring stage involves ensuring that the plan is “available at all times on the bridge to allow officers of the navigational watch immediate access and reference to the details of the plan”. The Guidelines further provide that “the progress of the vessel in accordance with the voyage and passage plan should be closely and continuously monitored” and that any “changes made to the plan should be made consistent with these Guidelines and clearly marked and recorded”.

9

Prudent passage planning would reasonably be expected to involve due regard to the Guidelines. As the judge stated at para 3:

“Established principles with regard to seaworthiness and the duty of due diligence pursuant to article III, rule 1 of the Hague Rules fall to be applied in the context of … the recognition by the International Maritime Organisation in 1999 that voyage or passage planning should apply to all ships engaged on international voyages. The practice of passage planning was therefore well established by 2011.”

10

As the judge found at para 65:

“The purpose of a passage plan is to plan the passage so as to ensure that the vessel is navigated safely: see the IMO Guidelines for Passage Planning. The owners' own guidance to their masters emphasised that the information noted on the passage plan should include ‘the areas to be avoided’ and ‘navigation dangers such as … shallow waters’. Captain Whyte accepted that an important goal of passage planning was to identify areas where it was unsafe for the vessel to go and to prevent ‘bad real-time decisions from being made’. As Captain Hart put it, ‘a proper passage plan operates to prevent bad ad hoc decision-making during the course of a passage’.”

The defects in the passage plan
11

In the present case, the passage plan was contained in two documents: a completed pro-forma “passage plan document” and the vessel's working chart. For the part of the vessel's passage involving departure from Xiamen, the relevant chart was British Admiralty chart no 3449 (“BA 3449”). The printed version of BA 3449 which the vessel had onboard was the most up-to-date printed version. The UK Hydrographic Office regularly publishes (usually on a weekly basis) Notices to Mariners that provide crews with navigational information, some of which must be marked on the chart (nowadays vessels use electronic charts which are automatically updated).

12

The vessel had onboard Notice to Mariners 6274(P)/10 (“NM 6274”). NM 6274 included the following warning (“the uncharted depths warning”):

“Numerous depths less than the charted exist within, and in the approaches to Xiamen Gang.”

13

During the passage planning process, the crew did not annotate BA 3449 to include an express reference to the uncharted depths warning, nor did they refer to it in the passage plan document. NM 6274 also included advice that the “least depth” within the buoyed fairway leading from the port to the open sea was 14 metres at low tide, so that it was at all times sufficiently deep for the vessel. When this advice was read together with the uncharted depths warning, the judge found (at para 53) that an ordinarily prudent mariner would consider that it was safe to navigate within the fairway (which had a sufficient depth) but not outside of the fairway (which had numerous depths less than charted).

14

The judge found that:

“70. … prudent passage planning required the danger created by the presence of numerous depths less than those charted outside the fairway to be noted on the chart. Such a note, in the terms suggested by Captain Hart, would immediately remind the officer navigating the vessel that it was unsafe to navigate outside the fairway. Such a note would do that which the IMO guidance on passage planning requires, namely, it would give a clear indication of the danger in navigating outside the fairway … My conclusion, having considered the expert and other evidence, is that whilst it would of course be prudent to note the warning in the passage plan it would also be necessary (and prudent) to mark the warning on the chart since that is the primary document to which the officer navigating the vessel would refer when making navigational decisions in the course of the outward passage.

73. In the present case...

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