Daewoo Heavy Industries Ltd and Another v Klipriver Shipping Ltd and Another
| Jurisdiction | England & Wales |
| Judge | The Honourable Mr Justice Langley |
| Judgment Date | 03 April 2003 |
| Neutral Citation | [2002] EWHC 1306 (Comm) |
| Docket Number | Case No: 2001 Folio 866 |
| Date | 03 April 2003 |
| Court | Queen's Bench Division (Commercial Court) |
[2002] EWHC 1306 (Comm)
IN THE HIGH COURT OF JUSTICE
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mr Justice Langley
Case No: 2001 Folio 866
Mr R. Thomas (instructed by Clyde & Co) for the Claimants
Mr R. Lord QC and Mr L. Akka (instructed by Hill Taylor Dickinson and Jackson Parton) for the Defendants
Hearing date: 16th May 2002
Approved Judgment
I direct that pursuant to CPR PD 39A Para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Justice Langley
INTRODUCTION
1. These proceedings arise out of the partial loss of and damage to a consignment of 34 new excavators carried on the vessel Kapitan Petko Voivoda from Korea to Turkey in September to November 2000.
2. The First Defendant was the charterer of the vessel. The cargo was carried pursuant to a charterparty between the First Claimant and the First Defendant and pursuant to 6 bills of lading issued by or on behalf of the Defendants.
3. On 21 December 2001 the court ordered the trial of certain preliminary issues designed to determine in advance of a full trial how far the Defendants are entitled to rely on various exemptions in the Hague Rules Article IV rules 2 and 5 in circumstances in which the cargo was wrongfully carried on deck when the loss and damage occurred.
THE FACTS
4. For the purposes of the trial of the preliminary issues the parties agreed a statement of assumed facts. It reads (so far as relevant) as follows:
“l. At all material times one or other of the Claimants were the owners of or otherwise entitled to sue in relation to a cargo of 34 brand new excavators …
2. The First Claimant and First Defendant concluded a contract of carriage (of the cargo) as partly evidenced in writing by a fax dated 22nd August 2000 … This contract was subject to and/or incorporated the Conline terms …
3. The First Defendant was at all material times the Charterer of the Vessel Kapitan Petko Voivoda from the Second Defendant, the owner of the Vessel, pursuant to the terms of a Charter Party in the Gencon form dated 20th July 2000 …
4. The excavators were shipped aboard the Vessel between 1st to 3rd September 2000 at Inchon in Korea in apparent good order and condition, and stowed and lashed under deck for carriage to Istanbul.
5. Six bills of lading dated 4th September 2000 were issued in respect of the shipment. None of the bills stated that the excavators were stowed on deck.
6. The contracts of carriage contained in/evidenced by the bills of lading and the contract between the First Claimant and the First Defendant provided for carriage of the excavators to Istanbul in Turkey.
7. The vessel sailed from Inchon on 3rd September. On about 5 th September the Vessel arrived at Xingang in China where 26 excavators were discharged from the Vessel then restowed on deck. The Defendants do not allege that notice of/consent to the restowage was given to/obtained from cargo interests.
8. The Vessel sailed from Xingang on 10th September and on 12th September 2000 was in the Yellow Sea bound for Zhangiang when she encountered heavy weather … On that day, at about 20:20hrs, 8 of the excavators on deck broke free of their lashings and were lost overboard. In addition other excavators stowed on deck suffered minor damage including rusting/wetting damage.
9. The loss of and damage to the excavators was caused by one or more of the following causes …:
(1) perils of the seas (within the meaning of Art IV rule 2(c) of the Hague or Hague Visby Rules);
(2) inadequate lashing at Xingang;
(3) carriage of the excavators on deck;
(4) insufficiency of packing (this applies only in relation to the damage apart from the loss of the 8 excavators overboard).
10. There is no enactment of the Hague Rules in Korea.
11. The Hague Rules have been enacted in Turkey (the precise scope of enactment is or may be in issue between the parties but this issue is not material for the determination of the preliminary issues).”
5. The fax dated 22 August 2000 provided that the carriage would be “underdeck only” (number 17). The Conline terms contained a General Paramount Clause (clause 2) the effect of which on the basis of the assumed facts is that the Hague Rules (but not the Hague-Visby Rules) as enacted in Turkey applied. The bills of lading also included the Conline terms.
6. The claim in respect of the 8 excavators lost overboard is for US $761,750. The claim for the minor damage to the other excavators is for US $25,671.30.
7. In view of certain developments in the submissions after the oral hearing was completed, it should be noted that the statement of assumed facts contained nothing about the incidence of insurance of the cargo in the event of carriage on deck or at all. Thus Mr Lord is right, in his written note dated 7 June, in response to Mr Thomas' written reply submissions, to state that neither party considered the position of insurance, either generally or in relation to the particular cargo, to be a relevant fact.
8. The hearing itself concluded on 16 May at the termination of Mr Lord's submissions and, by agreement, Mr Thomas was to respond by way of reply submissions in writing. Those submissions, however, undoubtedly and confessedly go far beyond the legitimate scope of reply. That was done under the disarming plea that the issue was one of great importance to the maritime community and so that this court, of all courts, should only make the decision on the basis of full and proper consideration of relevant arguments. That is a plea to which the court is and should be sympathetic and Mr Lord has rightly and readily acknowledged in his response that insofar as the new material relates to authority or textbooks intended to illustrate or establish the law then so be it.
9. But the court must also, of course, do justice between the parties and I also agree with Mr Lord that it is not permissible for the Claimant to make (as Mr Thomas has made) in a reply assertions of fact about the effect of deck carriage on insurances and freight charges, and indeed particularly so when there is an agreed statement of assumed facts, and, as was acknowledged in argument, such information as was before the court about the insurance of the instant cargo was consistent with deck carriage not being a matter which had affected the insurance position. Without intending to suggest, one way or the other, that had there been evidence before the court on the matter the conclusions I express would have been affected, I therefore approach the issues on the basis that there is no factual or expert evidence that the incidence of insurance was or would generally be affected by a conclusion either that the relevant exemptions applied or that they did not. The possible effect of such authority as there is on the issue is considered later.
THE HAGUE RULES
10. The relevant provisions of the Hague Rules are:
“ Article 2
Subject to the provisions of Article VI, under every contract of carriage of goods by sea the carrier, in relation to the loading, handling, storage, carriage, custody, care and discharge of such goods shall be subject to the responsibilities and liabilities, and entitled to the rights and immunities hereinafter set forth:
Article 3
1. The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to:
(a) make the ship seaworthy;
(b) ….
(c) make the holds … and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation.
2. Subject to the provisions of Article 4, the carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.
…
6. In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods …
Article 4
1. Neither the carrier nor the ship shall be liable for loss or damage arising or resulting from unseaworthiness unless caused by want of due diligence on the part of the carrier to make the ship seaworthy and … to make the holds, … and all other parts of the ship in which goods are carried fit and safe for their reception, carriage, and preservation in accordance with the provisions of paragraph 1 of Article 3.
Whenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence shall be on the carrier or other person claiming exemption under this Article.
2. Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from:
…
(c) Perils, dangers, and accidents of the sea or other navigable waters.
…
(n) insufficiency of packing
…
…
5. Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with goods in an amount exceeding £100 per package or unit or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.
This declaration if embodied in the bill of lading shall be prima facie evidence but shall not be binding or conclusive on the carrier.
By agreement between the carrier, master, or agent of the carrier and the shipper another maximum amount than that mentioned in this paragraph may be fixed, provided that such maximum shall not be less than the figure above named.
Neither the carrier nor the ship shall be responsible in any event for loss or damage...
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