The time that it takes for complex claims in the marine sector to come to court and the possible frailty of human memory combined in the CMA CGM Libra case to emphasize the importance of “front-loading” your evidence, said HFW global head of Admiralty Andrew Chamberlain last week at the HFW seminar CMA CGM LIBRA and Defective Passage Planning – a New Dawn for Cargo Claimants?.
In the case before Justice Teare in the English Admiralty Court earlier this year, the judge said of the Captain that “his evidence in 2019 is unlikely to be reliable. Not because he was untruthful, but because his evidence on such matters is likely to be the product, not of recollection, but of his reconstruction of events, the truth of which he has convinced himself of over the intervening years”. The Captain was giving evidence eight years after the event.
The case remains one of controversy, and it is still uncertain whether or not the case will go to appeal.
In a show of hands at the seminar, a significant majority of the audience, many of whom were master mariners, expressed dissatisfaction with the judgement.
On the night of 17th/18th May 2011, large container vessel CMA CGM Libra (IMO 9399193) departed from the Chinese port of Xiamen bound for Hong Kong and Europe, laden with 8,950 teu of containerised cargo with a value in excess of $500m. She also had on board almost 8,000 tons of bunkers.
Shortly after dropping the pilot, the vessel’s Master sailed out of the recognized dredged channel, which was marked by lit buoys, resulting in the vessel grounding at a speed of around 12 knots on a shoal. The vessel’s Owners, CMA CGM, said that the shoal was uncharted.
CMA CGM funded the salvage operation in the first instance and declared General Average to recover the amount of the salvors’ remuneration and certain other costs, reaching more than $13m, of which $9.5m was paid to the salvors.
While about 92% of Cargo Interests agreed to pay General Average in full, alternatively with a very small discount of 1.5%, the remainder declined, alleging there was actionable fault (Rule D of the York-Antwerp Rules) on the part of CMA CGM, which would give them a complete defence to the General Average claim.
CMA CGM refused to accept that they were responsible for the casualty and commenced legal proceedings in the Admiralty Court to recover approximately $800,000 from the non-paying Cargo Interests.
Prior to departure from Xiamen, the vessel’s Second Officer prepared, and the Master approved, a passage plan for the voyage to Hong Kong. The intention was to follow the recognized dredged channel until reaching the open sea, which was about 23 miles from the berth.
The Court held that, for various reasons, the passage plan was inadequate.
Under cross-examination the vessel’s Master conceded that, had the chart been marked up with the appropriate “no-go areas”, he would not have left the channel and attempted to execute the manoeuvre that ultimately led to the stranding of the vessel.
Andrew Chamberlain and Jonathan Goulding, presenting the seminar, both felt that this was a key piece of evidence that worked against the Owners in the case. Goulding, while emphasizing that “the captain said what he said and that is where we are”, felt that, if the Captain had admitted that he had lost situational awareness, without saying what he did which in effect blamed the inadequacy of the chart for the grounding, the judge might have ruled differently.
HFW reconstructed the AIS path of the vessel and Chamberlain said ” to me it does look like a loss of situational awareness, as much as anything else”. He observed that Justice Teare rejected some of the lines put forward by the cargo interests, including a proposal (citing the Volcafe case) that the burden of proof on seaworthiness should lie with the owners rather than the cargo interests.
However, as it stood, the Court held that the absence of an adequate passage plan was causative of the grounding, and that CMA CGM was in breach of its obligation to exercise due diligence to make the vessel seaworthy.
Accordingly, there was actionable fault on the part of CMA CGM and the Cargo Interests were not liable to contribute in General Average.
Chamberlain said that his understanding, having spoken to Clyde earlier in the week, was that the initial application for leave to appeal had been declined, and that the application for leave to appeal to the Court of Appeal was pending. He said: “If I were the Owners, I would be cautiously optimistic. I haven’t seen the grounds, but I would imagine that they are emphasizing very strongly that this is a case of general importance to the marine community. It certainly has generated a lot of commentary in the two months since the judgement came out. And, personally, my own view is that an appeal judgement is desirable. There are some issues with this case. I think the burden of proof issues around the Volcafe have now got a bit muddled with this judgement, and I think that needs to be unthreaded and looked at by a fresh tribunal.”
He also reported that there was “no doubt that the law firms and cargo recovery agents who fish in this pond have taken huge encouragement from this case. In fact I think on the Saturday morning after the judgement was delivered, we had a request for full disclosure of all documentation relating to passage planning in a fresh incident”.
Chamberlain said that he found it quite a troubling judgement, although he noted that there were differing views on the matter even within the HFW office. “For me the negligence by the master is so stark that the alteration of course to starboard, and the realization that once he’s gone to starboard, with the characteristics of this very large vessel, in the middle of the night with no pilots to fall back upon, that he has got no chance of getting back on track. And I think that any passage plan, defective or not, the moment you deviate from that plan, and go outside the marked channel, you are in some difficulty.”
Usually in such cases that hinged on “seaworthiness” the cargo interests would be looking for systemic failures, but Chamberlain observed that in this case there were none.
He also said that he had the greatest respect for Teare J as a judge, but wondered if the ruling was part of a general push to extend and toughen the concept of seaworthiness, with the aim of further reducing the number of incidents such as occurred to CMA CGM Libra.
Chamberlain noted that in another case, bulk carrier Jia Li Hai (IMO 8903349), which had not been widely reported, a summary judgement was given in a GA recovery case. “The judge had some fairly choice words for cargo who were refusing to pay their contribution to GA and had plainly embarked on a pure fishing expedition with no real case as to why they were alleging that the vessel was unseaworthy. So there is a little bit of comfort in that judgement “, he said.
IMN will be covering the seminar in full, as well as giving a more detailed recounting of this case and the other cases cited, in a longer article on the Insurance Marine News web site.
2009-built, Malta-flagged, 131,332 gt CMA CGM Libra is owned by Alize 1954 SNC care of manager CMA CGM of Marseille, France. It is entered with Gard P&I Club on behalf of Alize 1954. It is entered for H&M with Norwegian Hull Club on behalf of CMA CGM SA.
1991-built, China-flagged, 36,986 gt Jia Li Hai is owned and managed by Cosco Bulk of Tiapin, China.