Update on unseaworthiness — The CMA CGM Libra

The implications of The recent Admiralty Court decision of Alize 1954 v Allianz Elementar Versicherungs AG (The CMA CGM LIBRA) [2019] EWHC 481 (Admlty) (8 March 2019) continue to generate commentary from legal firms and insurers.

Robert Shearer, claims executive for the Americas Syndicate at Shipowners’ Club observed that the ruling provided ship owners with a further warning regarding their duties in relation to seaworthiness, and further strengthened the position of cargo interests.

On May 17th 2011 the container ship CMA CGM Libra grounded while leaving the port of Xiamen in China. The vessel had left a buoyed fairway and subsequently ran aground on an uncharted shallow area.

Although it was uncharted, recent notices to mariners had warned that many of the depths noted on the charts were inaccurate, in fact being much shallower than recorded.

While the passage plan had not referenced the vessel leaving the fairway; it also had not made any reference to the warnings concerning depths being less than shown on charts. No areas in the passage plan were marked as “no go” areas.

The Owners declared general average (GA); Although 92% of the cargo interests paid their contribution, 8% refused to do so.

The Owners brought a claim for the outstanding GA. In response the remaining cargo interests submitted there was an actionable fault that prevented owners from making a successful claim (a breach of Article III rule 1 of The Hague Rules).

Admiralty Judge Mr Justice Teare found for cargo interests on the basis that the vessel’s passage plan was defective; it made no reference to uncharted shallow areas and did not clearly mark “no go” areas. It was therefore not capable of ensuring the safe navigation of the vessel or of preventing ad-hoc bad decision making.

Significantly, Teare J ruled that the defective passage plan rendered the vessel unseaworthy. He followed “the well-established test” in McFadden v Blue Star Line [1905] which asks: whether a prudent owner would have required the relevant defect, had he known of it, to be made good before sending his ship to sea.

Teare J. was confident the answer to this question was “yes”.

The Owners had argued passage planning was part of navigation rather than part of seaworthiness, but this was not accepted.

As the uncharted shallows were not in the passage plan, they were not in the master’s mind when he made the decision to leave the fairway, which thus led to the grounding.

The court decided that the owner failed to exercise due diligence at the commencement of the voyage to ensure the vessel was seaworthy. While the owner had exercised due diligence by having an SMS; it also had to be shown that servants or agents, who were relied upon by the owners to make a ship seaworthy at the commencement of the voyage, also exercised due diligence. This was because the duty was non-delegable. In their preparation of the passage, plan the master and second officer did not exercise due diligence.

Shearer said that the decision in this case did not represent a change in the law; but it did serve as a useful reminder to vessel owners of their onerous and non-delegable duties in relation to seaworthiness.

Shearer concluded after providing a long but non-exhaustive list of items that could cause an interpretation of unseaworthiness, that “whenever an owner/operator puts a vessel to sea, they must remember the duty is on them to ensure they exercise due diligence with regards to the safety of the crew, vessel, cargo and environment. Due to the non-delegable nature of this duty, an owner should also ensure that seaworthiness is at the forefront of their servants’, agents’ and crews’ minds at the commencement of any voyage.”