“Article II [U]nder every contract of carriage of goods by sea the carrier, in relation to the loading, handling, stowage, carriage, custody, care and discharge of such goods, shall be subject to the responsibilities and liabilities and entitled to the rights and immunities hereinafter set forth" Article III rule (2) Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried. Article IV rule (2) Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from: (a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship. (b) Fire, unless caused by the actual fault or privity of the carrier. (c) Perils, dangers and accidents of the sea or other navigable waters. (d) Act of God. (e) Act of war. (f) Act of public enemies. (g) Arrest or restraint of princes, rulers or people, or seizure under legal process. (h) Quarantine restrictions. (i) Act or omission of the shipper or owner of the goods, his agent or representative. (j) Strikes or lockouts or stoppage or restraint of labour from whatever cause, whether partial or general. (k) Riots and civil commotions. (l) Saving or attempting to save life or property at sea. (m) Wastage in bulk of weight or any other loss or damage arising from inherent defect, quality or vice of the goods. (n) Insufficiency of packing. (o) Insufficiency or inadequacy of marks. (p) Latent defects not discoverable by due diligence. (q) Any other cause arising without the actual fault or privity of the carrier, or without the fault or neglect of the agents or servants of the carrier, but the burden of proof shall be on the person claiming the benefit of this exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier contributed to the loss or damage.”
“the paper was affixed to the walls with adhesive tape to a height just short of the roof. In the case of the roof ‘lining’, the paper appears to have rested on string stretched between the two walls and was either taped to the outside of the roof at the door-end or folded down there. The result was to suspend the paper not far below the ceiling and around probably 25–30 cm above the bagged cargo.”
“Whether this [the negation of breach] is achieved by invocation of a specific sub-rule, such as proof of inherent vice, or the general reserve catch-all of sub-rule (q), or direct refutation of Article III (2) would appear unimportant. I need not therefore pause to consider whether inherent vice is the appropriate concept when the damage is caused by water droplets generated by the interaction of moist air with the cold ceiling of a container.”
“It is not of course in every case that the evidential pendulum swings in this way to any real extent or even at all.”
“Given that the obligations in Article III (2) are made subject to Article IV (2), there is here complete circularity. Article IV (2) (m) is not in any real sense, as it is often described, an excepted peril (unlike many of the other causes listed in Article IV (2)). Properly analysed, it is no more than a category of case (like, most obviously, Article IV (2) (p) and (q)) in which breach of the Article III (2) obligations is necessarily negatived.”
“Conspicuously lacking from the evidence of the carrier was both any identification of the weight of the paper used in these containers (whether or not, as it contended, in a double layer) and any explanation of why that weight and type had been chosen. The only significant way in which paper or card might assist in preventing damage, as the expert evidence confirms, would be by moisture absorption and retention. Ideally, one would therefore seek to ascertain the amount of condensate which could be expected in the course of such carriage to North West European destinations and the time before saturation of paper or card of varying weights or types. Alternatively, particularly if this cannot in practice be properly ascertained by theoretical calculation, a suitable empirical study might establish that a particular weight and/or type of paper or card is sufficient in practice to prevent damage throughout such carriage. No such calculation or study was referred to in evidence, either instigated or effected by the carrier itself or produced or endorsed by an outside body such as a trade association or P & I club. It may well be that such work has never been done by anyone. In the absence of such material, however, the court is without any basis on which it might permissibly find that the use of any particular weight or quality of lining paper or card (including whatever may have been deployed in the present case) would have constituted a sound system.”
“49. A number of publications, some of a certain antiquity, referring to the use of Kraft paper or card, were suggested by counsel for the carrier to indicate a general practice to which it had conformed. However, they showed no consistency as to doubling, and none specified a weight or thickness, the key parameters so far as prevention is concerned. I am unable to regard these documents as recording or even evidencing any general practice in this regard, let alone one operative in 2012. In any event, a general practice – had one existed - could not itself have rendered a system sound in the absence of any appropriate theoretical or empirical underpinning, and I do not read any judicial pronouncement as having decided or even suggested the contrary. 50. In short, the carrier has failed to establish that it adopted a sound system.”
“42. I am therefore not in a position to determine how long it would take to saturate paper or card of varying weights and characteristics, or whether it would occur within the contemplated duration of the contracted transport. Even assuming that despite deploying a maximum weight and/or using corrugated paper or card saturation and water transmission would arrive eventually, the carrier has not established that this would have happened within the time-scale of the contracted carriage. 43. The proposition that damage during such carriage cannot be prevented by any form of paper or card lining must also confront historical experience. If correct, one might have expected it to have engendered long since and still continuing an industry-wide spate of claims and litigation, of which the carrier produced no evidence. The carrier's own announcement of its change to double layers in March 2012 would also appear to have been pointless if its contention in this court as to inevitability of damage were correct. Its subsequent experience might also have been expected to cast light on this question, but the carrier gave no evidence as to this, or indeed its experience before 2012, and I am thus without any assistance from this source.”
“Where cargo is loaded into a carrier's containers which are subsequently loaded on the vessel, it is in my view unrealistic to treat this as anything other than a single loading process, even if there is inevitably some interval between the two. Even if that were not so, the parties are free to agree on what for the purpose of Article I (e) constitutes loading: see Pyrene Co. Ltd. v Scindia Navigation[1954] 2 QB 402 , approved in G.H. Renton v. Palmyra Trading[1957] AC 149 . Where, as here, the obligation to stuff its own containers is assumed by the carrier, I would have little difficulty in interpreting the contract of carriage as including that as part of the loading.”
“In my opinion, there was no breach of the prima facie obligation under Article III, Rule 2, so that the respondents do not need to rely on any immunity under Article IV. But if they did need such immunity, they could establish it under Rule 2 (m) of Article IV. There is no express provision, and in my opinion there is no implied provision, in the Hague Rules that the shipowner is debarred as a matter of law from relying on an exception unless he proves absence of negligence on his part. But he does have to prove that the damage was caused by an excepted peril or excepted cause, and in order to do that he may in a particular case have to give evidence excluding causation by his negligence. It was proved in this case that the shipowner was not negligent.”
“That the burden of proof rests upon the defendants to establish the defence of inherent vice admits of no doubt. See the speech of Viscount Sumner in F.C. Bradley & Sons Ltd v Federal Steam Navigation Company Ltd (1927) 27 Ll. L. Rep.
“Accordingly, in strict law, on proof being given of the actual good condition of the apples on shipment and of their damaged condition on arrival, the burden of proof passed from the consignees to the shipowners to prove some excepted peril which relieved them from liability…”
“[The] cargo was not damaged by reason of the shipowner committing a breach of contract, or omitting to do something which he ought to have done, but it was deteriorated in condition by its own want of power to bear the ordinary transit in a ship” and Lord Reid’s conclusion in Albacora (at[1966] 2 Lloyd’s Rep 58 , 59 lhc) that “ordinary transit” means “the kind of transit which the contract requires the carrier to afford” or “the voyage provided for in the contract”
“Before you come to the exceptions the liability of the shipowner is absolute. He has contracted that he will deliver the goods at the end of the voyage. If there were no exceptions, it would be utterly immaterial whether the loss was caused by his servants or not. Even if there were no negligence whatever he would be liable. It cannot be, therefore, that this irresistible inference ought to be written into that part of the contract. It is not wanted there; therefore you must write it into that part which contains the exceptions. When you come to the exceptions, among others, there is that one, perils of the sea. There are no words which say “perils of the sea not caused by the negligence of the captain or crew.”
“…as a general rule, it may be said that the burden of proof lies on the person who affirms a particular thing “ei incumbit probatio qui dicit, non qui negat.”
“On the ruling of the Court of Appeal the shipowners have placed on them the unusual task of proving a negative. It is sought to say that the rule is not anomalous because of some other cases in which a party is required to prove a negative, but what are cited as parallels are so different and are so few in number as to emphasize the general rule. Thus, the law as to the liability of a bailee depends on the special obligation which the law has imposed on him from ancient times. It has recently been discussed by the Court of Appeal in Brooks Wharf v. Goodman[1937] 1 KB 538 . If the bailee fails duly to redeliver the goods, he must, in the absence of exceptions, show that he has taken reasonable care in keeping them. Similarly, the liability of a common carrier depends, according to the old law, on the custom of the realm, like that of the innkeeper. Under this special rule a carrier is an insurer who is absolutely liable for the safe carriage of the goods unless he can explain the loss as due to the act of God, the King's enemies, or inherent vice. In modern times the practice of having special contracts has been superimposed on the custom of the realm. These contracts contain exceptions. If the carrier pleads an exception, the goods owner may counter by pleading the fault of the carrier, but the onus of proving that, as also of proving an allegation of unseaworthiness, is, as I have already explained, on the goods owner who makes it.”
“The relationship between the present parties is contractual. It follows (as was accepted by both Counsel) that the question of legal burden of proof has ultimately to be decided by construing the contract between them. Cases such as The Glendarroch (sup.) were decided as a matter of construction of the contract before the Court, albeit approaching the question of construction by having clearly in mind the legal and historical background to such contract. In ascertaining the effect of the contract one must take into account the nature of the contract. The contract here is a contract in a bill of lading; it is a contract of carriage - that is to say, a species of a contract of bailment… It is only because the contract in this case is a contract of bailment that the plaintiff sets up a sustainable cause of action by proving the non-delivery of the goods. It was then for the defendants to set up a sustainable defence. I use the word "sustainable" in preference to "prima facie", since "prima facie" is frequently used to refer to a case which shifts the evidential burden of proof rather than giving rise to a legal burden of proof in the opposite party in the manner I have explained above.”
“The pursuers contend, however, that this does not amount to an affirmative disproof of negligence; and that even assuming that the cargo has been shown by the defenders to have suffered damage arising from inherent vice within Article IV, Rule 2 (m), there yet remains an additional onus on the defenders to disprove negligence—an onus which they have failed to discharge. I have doubt whether Wright, J., was correct in saying [in Gosse Millard] that such an additional onus lies on the defenders.”
“Save in cases where negligence or privity is expressly dealt with as in Rule 2(a) and (b) it is submitted that the carrier is protected that the carrier is protected against loss or damage on proof by him that the case falls within the specific exception unless the goods-owner in his turn proves negligence. Under exception (q) the onus of disproving negligence and privity is placed expressly upon the carrier.”
“As regards proof of negligence at least, that the position under the Rules is the same as the common law position to be derived from The Glendarroch is the view expressed in Scrutton. Older editions of Carver, basing themselves on the view of Wright J. referred to above, took the first, bailment, view. Later editions reversed this approach on the grounds of inconsistency with the common law rules, and that it would render Art.IV.2 (q) superfluous. It was even described in the 12th edition of 1971 as “heresy”
“Nor are the specific arguments advanced by the defendants persuasive as a mode of construction of the Hague Rules.While it is right to say that any terms used in the Hague Rules should be construed having regard to the previously understood meaning of those terms, there have been warnings that one should not pay excessive regard to earlier decisions of English Courts in construing this international code. (See, for example, per Lord Atkin in Stag Line Ltd. v. Foscolo Mango & Co. [1932] A.C. 328 at pp. 171 and 342). Thus it is not useful to construe the Hague Rules by reference to what was the position of a common carrier under English law nor by reference to the special position of the implied warranty of seaworthiness under English law - an implied warranty which is expressly negatived by s. 3 of the Carriage of Goods by Sea Act, 1924. On any view, such arguments do not determine the construction of the paragraphs of art. IV, r. 2, inter se. This is a matter with which the earlier English decisions were not concerned at all.”
“is not in any real sense…an excepted peril…but no more than a category of case in which the breach of the Article III rule 2 obligations is necessarily negatived”
“while a sound system is not required to take account of the peculiarities of an individual cargo, these coffee beans were entirely typical of an extensively carried commodity”
“A carrier is obliged under Article III (2) to employ a sound system. Since the "soundness" relates to the prevention of damage to a normal cargo from the risks reasonably to be expected during the contracted carriage, it is no answer to an allegation of breach of that obligation to say that, since such damage is always unavoidable, no such system exists.”
“Turning now to inherent vice, I would adapt the ‘definition’ [e]nunciated by Lord Sumner in Gaunt's case and quoted by Lord Justice Scrutton in Sassoon's case (1923) 16 Ll. L. Rep 129 at p. 132 so that it read: A loss by inherent vice is one which is proximately caused by the natural behaviour of the subject matter insured, being what it is, in the circumstances in which it was expected to be carried. This is in line with the common understanding of the exception of inherent vice in a contract of affreightment as- . . . the unfitness of the goods to withstand the ordinary incidence of the voyage, given the degree of care which the shipowner is required by the contract to exercise in relation to the goods [see Scrutton on Charterparties 18th ed., art. 107.]. It seems to me to be both right and natural that the concept should be treated similarly in the context of both carriage by sea and marine insurance, and in this respect I disagree with the learned editors of Arnould.”
“As I have said, in my judgment a loss is proximately caused by inherent vice if the natural behaviour of the goods is such that they suffer a loss in the circumstances in which they are expected to be carried. This is the test under a contract of affreightment and the shipowner in this case could have pleaded inherent vice in answer to a claim for damage to the cargo. In holding that inherent vice is only proved if the soya beans could not withstand any normal voyage of that duration, the judge was introducing a different concept, namely that of certainty of loss. That is quite different defence.”
“[Inherent vice] refers to a peril by which a loss is proximately caused; it is not descriptive of the loss itself. It means the risk of deterioration of the goods shipped as a result of their natural behaviour in the ordinary course of the contemplated voyage without the intervention of any fortuitous external accident or casualty.”
“If, then, the damage complained of was proximately caused by the excessively moist condition of the gloves when shipped, given the conditions in which they were and were expected to be carried, was that cause an insured peril under the policies or does it fall within the excepted peril of inherent vice or nature of the goods? Taken alone, the expression "inherent vice" may be capable of misleading, since it may suggest some defect in the goods and these goods were not in any ordinary sense defective. It is helpful to read the whole phrase "inherent vice or nature of the subject-matter insured" which appears in these policies, as also ins. 55(2) (c) of the Marine Insurance Act 1906 , as a whole.”
“The suggestion has sometimes been made that inherent vice means the same thing as damage that must inevitably happen, but this is not so. The distinction is between damage caused by any external occurrence, and damage resulting solely from the nature of the thing itself. Damage from inherent vice may be just as capricious in its incidence as damage caused by perils of the seas.”
“The argument is that in this Rule “properly” means in the appropriate manner looking to the actual nature of the consignment, and that it is irrelevant that the shipowner and ship's officers neither knew nor could have discovered that special treatment was necessary. The obligation under the Rule is to carry the goods properly and if that is not done there is a breach of contract. So it is argued that in the present case it is proved that the only proper way to carry this consignment on this voyage was in a refrigerated hold, and that the obligation of the respondents was to do that, even if the appellants' agents, who were parties to the contract, were aware that there was no refrigeration in this ship. This construction of the word “properly” leads to such an unreasonable result that I would not adopt it if the word can properly be construed in any other sense. The appellants argue that, because the Rule uses the word “properly” as well as “carefully,” the word “properly” must mean something more than carefully. Tautology is not unknown even in international conventions, but I think that “properly” in this context has a meaning slightly different from “carefully.”
“It is clear from the mass of evidence to which I have listened that the problems concerning ventilation of parcels of cocoa are many, that these problems have not been the subject of extensive research and are scientifically very much greater than those in charge of the day-to-day carriage of cocoa can have been expected to know. Masters, chief officers and supercargoes are neither mathematicians nor scientists, and much which was said in evidence no doubt came as a surprise to them.”
“Whether Panatlantic can avail themselves of the principles laid down in these cases depends on whether they can establish facts similar to those on which the cases turned. This involves consideration of whether Panatlantic were or should have been alive to the danger which here eventuated; whether they omitted any reasonable or proper precaution; whether the methods they adopted were sound in the light of such knowledge as they had or should have had; and whether the R.O.B. formed because the goods could not stand the treatment which the contract of carriage authorized or required. I readily accept that owners cannot escape liability by appointing a stupid or ignorant master and then relying on his unawareness of the risks involved. It is what they know or ought to know which matters. But even applying that test I am satisfied that Panatlantic did not act carelessly or inconsistently with standard practice in failing to heat the cargo at the beginning of this voyage. It is not general practice to heat crude oil cargoes. If the cargo had been of a crude known to be abnormally heavy and viscous, the position might be different, but the Belayim blend was not generally known or believed to give rise to problems of this kind. Panatlantic omitted no reasonable precaution which any ordinary owner would have taken, particularly where the charterer required no heat. The excessive R.O.B. formed because, for reasons not foreseen or apprehended by Panatlantic, the cargo would not survive a voyage of this length at this time of year without heat. There was, in my judgment, no breach of art. III, r. 2, but in any event Panatlantic are entitled to rely on art. IV, r.
“It follows that, in the absence of some other identifiable error, such as (without attempting an exhaustive account) a material error of law, or the making of a critical finding of fact which has no basis in the evidence, or a demonstrable misunderstanding of relevant evidence, or a demonstrable failure to consider relevant evidence, an appellate court will interfere with the findings of fact made by a trial judge only if it is satisfied that his decision cannot reasonably be explained or justified.”
“Where the honesty of a witness is a central issue in the case, one is close to the former end of the spectrum as the advantage which the trial judge has had in assessing the credibility and reliability of oral evidence is not available to the appellate court. Where a trial judge is able to make his findings of fact based entirely or almost entirely on undisputed documents, one will be close to the latter end of the spectrum.”
“Packing instructions for coffee CSAV Line”
“Coffee bags loaded under LCL or FCL condition at all WCSA P.O.L. (presumably West Coast South America Ports of Loading) which read: “With effect as of1 March 2012 , all shipments of the referenced commodity and/or quotations to be effected by CSAV will include/comprise of lining of containers with a minimum of two layers of kraft paper. Should a customer not accept this method of preparation for proper and safe carriage of the goods, the shipment will not be accepted. Under very special circumstances, which are to be first approved solely by Trade Manager WCSA will a different method of preparation/stowage be admitted. In such a case, the customer, without exception, shall sign a LOI in the form attached hereto and the face of the relevant bill of lading will be claused…”
“you cannot guarantee no condensation damage”
“…it is quite clear from the evidence that I have heard that there is inevitably a certain degree of damage in the sense of staining damage, and possible disintegration of bags from moisture in this trade, however well the cargo may be stowed and however well it may be ventilated, and that customarily that amount of damage is accepted by receivers without complaint, it being recognized that a cargo of this nature carried on small ships of this kind cannot be expected to arrive in identically the same condition as when shipped.”
“It is not a question here of whether the shipowner has failed to adopt some new practice, but whether he is in breach in adopting a practice commonly adopted by other persons in the trade. The test in a case of this kind, of course, is not absolute: you do not test it by absolute perfection or by absolute guarantee of successful carriage. It has to be looked at realistically, and the most common test is: Would a prudent shipowner, if he had known of the defect, have sent the ship to sea in that condition? It seems to me that, using that test, the shipowner who knows that in the ordinary way cargoes of this kind will inevitably suffer some minor damage by way of condensation staining or wasting of a few bags would not hesitate to send this ship to sea even though he knew that, if the ship had a bit of bad luck, she might run into some weather which involved rather longer periods of closing the hatches than would have been involved on another voyage.”
“The proposition that damage during such carriage cannot be prevented by any form of paper or card lining must also confront historical experience. If correct, one might have expected it to have engendered long since and still continuing an industry-wide spate of claims and litigation, of which the carrier produced no evidence.”
“The phrase "shall properly and carefully load" may mean that the carrier shall load and that he shall do it properly and carefully: or that he shall do whatever loading he does properly and carefully. The former interpretation perhaps fits the language more closely, but the latter may be more consistent with the object of the rules. Their object as it is put, I think, correctly in Carver's Carriage of Goods by Sea, 9th ed. (1952), p. 186, is to define not the scope of the contract service but the terms on which that service is to be performed. The extent to which the carrier has to undertake the loading of the vessel may depend not only upon different systems of law but upon the custom and practice of the port and the nature of the cargo. It is difficult to believe that the rules were intended to impose a universal rigidity in this respect, or to deny freedom of contract to the carrier. The carrier is practically bound to play some part in the loading and discharging, so that both operations are naturally included in those covered by the contract of carriage. But I see no reason why the rules should not leave the parties free to determine by their own contract the part which each has to play. On this view the whole contract of carriage is subject to the rules, but the extent to which loading and discharging are brought within the carrier's obligations is left to the parties themselves to decide.”
“…the division of loading into two parts is suited to more antiquated methods of loading than are now generally adopted and the ship's rail has lost much of its nineteenth-century significance. Only the most enthusiastic lawyer could watch with satisfaction the spectacle of liabilities shifting uneasily as the cargo sways at the end of a derrick across a notional perpendicular projecting from the ship's rail.”