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Web alert: the EEMS Solar - is an owner always responsible for poor stowage?
News & Insights 16 December 2014
The English High Court in this case was asked to consider whether the owner of the ship was liable to the BL holder for the losses resulting from the movement of cargo during the voyage, due to poor stowage.
The EEMS Solar case related to a cargo of steel coils and the successful transfer of responsibility for stowage from a contractual carrier under a bill of lading (BL) to a charterer / shipper.
The English High Court in this case was asked to consider whether the owner of the ship was liable to the BL holder for the losses resulting from the movement of cargo during the voyage, due to poor stowage. The Master in this case had prepared his own stowage plan, but omitted to include the locking coils in three rows. The court found that the lack of locking coils was the effective cause of the cargo movement and, therefore, the damage to the cargo.
However, the court also found no evidence that the stevedores had paid any attention to the stowage plan prepared by the Master and, as such, there was no evidence of 'significant intervention' which would have operated to return responsibility for cargo stowage back to the owner under the applicable charterparty. The court found that the damage was ultimately caused by poor stowage by the stevedores, who were employed by the shipper / charterer.
The BL incorporated charterparty terms, which stated that securing of cargo was the charterer’s responsibility. At Clause 5 of the Gencon charterparty it set out:
'The cargo shall be brought into the holds, loaded, stowed and/or trimmed, tallied, lashed and/or secured by the charterers, free of any risk, liability and expense whatsoever to the owners.’
However, Article III Rule 2 of the Hague / Hague-Visby Rules also provides that:
‘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.’
Article III Rule 2 of the Hague / Hague-Visby Rules does not impose a duty on the owner to undertake ALL of the listed acts, rather to simply undertake those acts which he has agreed to undertake in a proper and careful manner. Clause 5 of the Gencon charterparty was therefore not invalidated by Art. III.
It was also held that the Hague / Hague-Visby Rules rules, at Article III Rule 8, did not prevent this transfer of obligation and liability from an owner to a charterer. Furthermore, the fact that the shipper, and not the charterer, physically loaded and stowed the cargo did not alter this outcome.
The English High Court ultimately held that the parties must have intended responsibility for stowage to be transferred to the shipper / cargo receiver; and thus the cargo claim against the owner failed.
This case is a good reminder of how important charterparty terms can be and the need to look at any shipment as a whole when determining where the liabilities lie for any cargo loss / damage.
The Standard Club is always on hand to assist. If in any doubt, the reader should contact the authors of this article, or their usual club contact.
1. Yuzhny Zavod Metall Profil LLC v Eeems Beheerder B.V. ('The EEMS SOLAR') QBD, Admiralty Court, Admiralty Register, 5 June 2013.