Northern Shipping Company v Deutsche Seereederei G.m.b.H. (Kapitan Sakharov)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE AULD,LORD JUSTICE BROOKE,LADY JUSTICE HALE |
| Judgment Date | 03 March 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J0303-9 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: QBADF/98/0800 |
| Date | 03 March 2000 |
[2000] EWCA Civ J0303-9
IN THE SUPREME COURTS OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
(ADMIRALTY COURT)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
Lord Justice Auld
Lord Justice Brooke and
Lady Justice Hale
Case No: QBADF/98/0800
Mr. Charles Macdonald QC & Mr. Nigel Jacobs (instructed by Messrs Lawrence Graham, London EC3A 8JN) for the claimant
Mr. Julian Flaux QC & Mr. Robert Bright (instructed by Messrs Jackson Parton, London, E1 8AA) for the 1 st and 2 nd Defendants
Mr. Ian Milligan QC & Mr. Laurence Akka (instructed by Messrs Holman Fenwick & Willan, London, EC3N 3AL) for the 3 rd Defendants
On 4 th July 1993 the plaintiff's ("NSC's") container vessel, Kapitan Sakharov, was carrying laden containers of the first and second defendants ("DSR") and third Defendants ("CYL") on a short voyage from Khor Fakkan, near the entrance to the Arabian Gulf, to other ports in the Gulf. Shortly before midday a container on deck containing a dangerous cargo exploded, causing a fire on deck which spread below, resulting in the sinking of the vessel shortly after midnight on the next day. NSC, in addition to the loss of its ship, faces claims by the dependants of two seamen who lost their lives, by shippers, including DSR and CYL, for loss of cargo and containers and by the Iranian authorities for pollution damage. All the material contracts of carriage were governed by the Hague Rules.
NSC claimed against one or other of DSR and CYL damages for its own losses and an indemnity in respect of the claims it faced. DSR disputed NSC's claim and counter-claimed for its losses and for an indemnity in respect of cargo and other container owners' claims against it. CYL also disputed NSC's claim and counterclaimed for the loss of its cargo and for an indemnity in respect of claims that it faced from cargo and other container owners.
DSR and CYL together operated a world-wide container service in which one or other of them shipped containers for carriage of goods on ocean vessels. At the material time the Kapitan Sakharov, a Russian built vessel originally registered in the USSR in 1979, was acting as a "feeder" vessel for containers shipped to Khor Fakkan, making deliveries to various ports within the Gulf. Most of her cargo consisted of DSR's and CYL's laden containers. She had four holds and four hatches, all forward of the engine room, bridge and accommodation. No 1 hold and hatch was on a raised forecastle and the other three hatches were at main deck level. The initial explosion occurred when the vessel was proceeding slowly in hot sunny weather with the access hatches to the holds closed. Evidence of the master and members of the crew put the explosion and immediately ensuing fire in the middle of the forepart of hatch 3.
NSC's case was that the initial explosion giving rise to the fire and eventual loss of the vessel and its cargo occurred on deck, in a DSR container containing an undeclared and dangerous cargo —probably an unstable chemical —stowed at about the centre line and bottom tier of a stack of mostly DSR containers on hatch 3. DSR's case was that the initial explosion was caused below deck by combustion of vapour which had escaped from one or more of 8 CYL tank containers containing a highly flammable liquid called isopentane (IMPG class 3.1), stowed in the aft part of hold 3. CYL's case was that the initial explosion occurred in a DSR container containing calcium hypochlorite, also an explosive substance (IMPG class 5.1), which, it maintained, was stowed on hatch 3, but which, on DSR's case and according to the ship's loading documents, was stowed under deck in the after part of hold 2.
Wherever and in whoever's container the initial explosion occurred, it is common ground that it resulted in the cracking open of hatch 3 and a fire which, despite vigorous fire-fighting by the ship's crew, spread down into hold 3, in the aft section of which there were 8 CYL tank containers of isopentane. It was a liquid more flammable than petrol, having a flash-point well below 0 C and a boiling point of about 28 C. Ambient temperature at the time in the Gulf would have been well above that boiling point, so that the isopentane was bound to be under pressure, and any escape of it via the tank containers' pressure valves or otherwise would have been in the form of vapour. Given a source of ignition, the degree of risk of such vapour combusting and/or contributing to a fire in the hold clearly depended in large part on how well it was ventilated. There was no mechanical ventilation in the holds of the Kapitan Sakharov and, as the Judge found, "not very effective natural ventilation".
The evidence did not indicate whether there was already a concentration of isopentane in hold 3 before the initial explosion and fire or whether their heat caused it. But it is plain from the expert evidence that some concentration would have occurred when the fire spread to the hold and that, at an early stage, it would have fuelled and exacerbated it. The consequences of the introduction of isopentane to a fire in a poorly ventilated hold are particularly serious, not only because of its high flammability and volatility, but also because the fire is likely to become a general vapour fire not readily extinguishable by water.
The intense fire that developed in the Kapitan Sakharov's hold led, in turn, to over-heating of diesel fuel in her wing tanks, causing one or both of them to explode and breach the bulkhead separating holds 3 and 2, thus allowing them to flood in common. The result was that fire fighting water directed into hold 3 by the crew and then by fire-fighting vessels passed into and accumulated in hold 2 as well, eventually causing the vessel to sink.
The Judge held that the initial explosion occurred in undeclared dangerous cargo in a DSR container stowed on deck on hatch 3; that the stowage of that cargo had rendered the vessel unseaworthy, though not because of any lack of due diligence by NSC; that the explosion and resultant fire on deck caused damage to part of the ship and part of the cargo and were an effective cause of the sinking and loss of the vessel and most of the cargo; but that that they would not have caused those further losses if NSC had not stowed CYL's isopentane below deck; that that stowage had rendered the vessel unseaworthy and was due to NSC's lack of due diligence; and that it contributed to the fire below deck and explosion of one or both of the diesel tanks and was a further effective cause of the loss of the vessel and most of the cargo.
In the result, the Judge: 1) allowed NSC's claim against DSR in respect of its loss from the initial explosion and fire on deck; 2) dismissed its claim against DSR for damages and for an indemnity in respect of the third party claims arising out of the isopentane fire and loss of the vessel; 3) dismissed the entirety of its claim against CYL; 4) dismissed DSR's counterclaim against NSC; 5) dismissed CYL's counterclaim against NSC for such loss as it suffered from the initial explosion and fire; and 6) allowed CYL's counterclaim in respect of damage to and loss of its containers and cargo caused by the isopentane fire.
The issues for this Court are: 1) Did the Judge apply the correct test in finding that the cause of the explosion was undeclared and dangerous cargo of DSR stowed on deck and was his finding, in any event, supported by the evidence? 2) Was he correct in finding that the vessel was unseaworthy by reason of NSC's stowage of CYL's isopentane below deck and, if so, that the unseaworthiness was caused by NSC's lack of due diligence? 3) If so, was he correct in holding that NSC's lack of due diligence excused DSR from liability to NSC under Article IV, Rule 6, of the Hague Rules and at common law for the total loss of the vessel and all its cargo? 4). Was he correct in holding that CYL's counterclaim under Article III, Rule 1, of the Hague Rules for its losses resulting from unseaworthiness of the vessel by reason of the initial explosion and fire and from the isopentane fire could only succeed as to the latter because the unseaworthiness resulting from the carriage of DSR's undeclared dangerous cargo on deck was not caused by any want of due diligence of NSC?
The cause of the initial explosion and fire
The Judge approached his task by considering in considerable detail a number of strands of evidence relating respectively to: 1) the loading and stowage of the containers, finding that, in the main, the ship had been loaded in accordance with the loading plan; 2) the location of the initial explosion and fire, finding that it occurred at or close to where a number of DSR's containers, in particular SENU 450699 4 ("SENU") and INKU 277277 2 ("INKU"), were stowed on the fore part of hatch3; 3) debris and materials found at the site of the explosion and shortly after it had occurred; 4) the location under deck of DSR's declared cargo of calcium hypochlorite, CYL's candidate for the culprit; and 5) expert and other evidence as to the unlikelihood of either that calcium hypochlorite or CYL's isopentane being responsible for the initial explosion or fire, and the absence of evidence indicating any culprit other than undeclared and dangerous cargo of DSR on deck.
As to 1), the loading and stowage of the vessel's cargo of containers, there was evidence in the form of preliminary and final...
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