Cargo Loading and Stowage - Legal Responsibilities
The Association is grateful to Stuart Kempson of Solicitors Hill Dickinson LLP, Liverpool, for contributing this article for members' benefit.
Members will no doubt be aware of the recent case of the MV "EEMS Solar" 2013. The Admiralty Court in London considered the question of whether an owner was liable to a bill of lading holder for losses resulting from the movement of cargo during the voyage. An exposition of the case can be found in Hill Dickinson's legal article.
The case proved to be of great interest given its development of the law from "The Jordan II" and it was an opportune chance to revisit the long standing query of who is responsible for cargo operations under a charterparty, in a modern context of break bulk and project cargoes.
Factual situation and legal questions
The rising volume of shipments from China is being accompanied by a growing incidence of claims arising from alleged poor stowage and securing of break bulk and project cargoes, although it should be stressed that the problem is not unique to China. Bad stowage can cause cargo to shift and stows to collapse during the voyage, which in turn can result in damage to cargo and vessel. Practical difficulties in loading and stowing cargoes in China can be exacerbated by communication difficulties between ships' crew and stevedores. It is often the case that cargoes will be loaded by stevedores appointed by charterers or shippers under the master's supervision. This raises important questions as to responsibility for stowage:
- Where does liability for bad stowage lie?
- Is a charterer or shipper relieved of liability when the master or chief officer intervenes in or supervises loading and stowage?
- Does the master have a duty to intervene where bad stowage results, or might result, in his vessel being unseaworthy?
NYPE Clause 8 unamended
The starting position under English common law is that the duty to load and stow the cargo rests with the owner. Nevertheless, the courts have recognised the freedom of the parties to a contract of carriage to determine the extent of the carrier's loading obligations. The words "charterers to load under the supervision of the captain" found in an unamended NYPE clause 8 have the effect of transferring responsibility for stowage from the owners. Such words are considered to be no more than a reservation of a right to supervise, and not a duty. It does not relieve a charterer of their primary duty to stow safely. A master is entitled to seek to protect his vessel from stowage that renders his vessel unsafe, but there is a difference between a right to supervise and require re-loading, and a duty to do so.
There are two exceptions:
- The first exception is where the master actually supervises the cargo operations and loss or damage is attributable to that supervision. This requires actual intervention, beyond a mere review of the stowage plan.
- The other exception is where the loss or damage is attributable to want or care in matters pertaining to the ship of which the master was (or should have been) aware but the charterers were not, for example, stability.
NYPE Clause amended
When clause 8 is amended by the addition of the words "and responsibility" liability for bad or improper stowage is transferred back to the owner. But it should not be forgotten that liability will not be so transferred if the charterers undertake some intervention that caused the bad stowage, for example by giving negligent stowage instructions or incorrect information pertaining to the nature of the cargo to be laden.
Bills of Lading
Under most bills of lading, including the Congenbill 1994 form, responsibility for stowage will fall upon the carrier through the incorporation of the Hague or Hague-Visby by virtue of the General Clause Paramount. The standard terms of most container operators' bills of lading expressly say so - for example, clause 9 of the Conlinebill 2000 form. A number of decisions by the English courts have, however, recognised that responsibility for stowage can be transferred to a charterer or shipper by incorporation of charterparty terms into the bill of lading contract, notwithstanding the Hague / Hague-Visby rules[i]. Responsibility will revert to the carrier in the event of significant causative negligent intervention by the carrier or his servants.
Unseaworthiness - duty to intervene?
Does bad stowage amounting to unseaworthiness affect an owner's duty to exercise due diligence to make his vessel seaworthy at the commencement of the voyage? The approach of the English courts is not whether the owner is under a duty to intervene in loading, but rather whether that duty is owed to the charterers. There is no duty to intervene, because otherwise it could potentially lead to the absurd situation where it becomes in the charterers interest to transfer responsibility back to the owner by stowing the cargo so badly the vessel becomes unseaworthy. The exception is if the unseaworthiness arises out of something within the master's province, such as the stability of the vessel[ii].
Practical advice
Should the master not be satisfied with any aspect of the stow it is recommended that cargo operations be halted and the shipper or charterer or stevedores be instructed to re-stow the cargo properly.
Members are advised to contact the Association in the event of any disagreement over how the cargo is to be stowed properly.
In case of urgent situations, the master of the vessel should feel free to seek immediate assistance from Skuld's local correspondents who can be called upon 24/7 and 365 days a year to attend to members' vessels.
[i] The Jordan II [2003] 2 Lloyd's Rep 87, affirming Pyrene Co Ltd v Scindia Steam Navigation [1954] 1 Lloyd's Rep. 321; and The Eems Solar [2013]
[ii]Court Line v Canadian Transport [1940] 1 Lloyd's Tep 167