The chartered vessel (a gearless Panamax bulk carrier) ran aground while entering the port of Chaozhou under pilotage. As a result, she suffered damage to hull structure. The owners claimed the cost of repairs and associated damages in the amount of US$ 1,158.559.59 plus interest and costs on the premise that charterer directed the vessel to an unsafe port in breach of a safe port warranty in the charterparty.
The charterers defended the claim arguing that the vessel was unseaworthy as she lacked the proper charts which prevented the master from preparing an effective berth-to-berth passage plan (The CMA CGM Libra [2021] UKSC 51). On that basis, the charterers argued that unseaworthiness was the effective cause of the loss and as the Hague-Visby Rules were incorporated into the charterparty by a Paramount Clause, they were able to rely on breach of Article III Rule (1) of the Rules as a defence of circuity of action to the owners’ claim for breach of the unsafe port warranty, according to the principle in Post Office v. Hampshire [1980] QB 124.
Was the port unsafe?
There is authority pointing to the fact that a systematic error in the infrastructure of a port could potentially make that port unsafe (The Ocean Victory [2017] UKSC 35)- the pilots employed by a port can certainly be considered part of that port’s infrastructure. It was in essence the submission of the owners that the pilot’s failure to deploy the stern tug in “indirect” mode to bring the stern of the Vessel around to port and her head around to starboard meant that he was incompetent. (according to the owners, this failure demonstrated a disabling lack of skill or knowledge amounting to incompetence in line with the test laid down in The Eurasian Dream [2002] 1 Lloyd’s Rep 719). The tribunal disagreed. After a technical evaluation assisted by expert mariners, it was held that the main fault of the pilot in this case was failure to execute the manoeuvre required to enter into a port (that poses some navigational challenges) correctly. This was deemed to be an isolated error on his part. The pilot worked at Chaozhou for 5 years before this incident, continued working as a pilot there for some five years afterwards, and had not been involved in any other incidents. He had demonstrated the ability to control the Vessel and the tugs in other respects during this incident.
It is not beyond the bounds of possibility that a pilot employed by a harbour authority could be regarded as incompetent but the burden that the owners need to discharge in such a case is a considerable one and unless it can be demonstrated that the pilot in question is recently appointed and no adequate training opportunities are offered to him/her by the harbour authority to familiarise himself/herself with particular navigational challenges the relevant port poses, it is likely that any navigational error of the pilot will be judged as one off as was the case here.
Was the vessel unseaworthy?
The finding on the safety of the port was adequate to dispose the owners’ claim but the tribunal also made the following observations regarding the vessel’s seaworthiness. It was found that the vessel did not have the up-to-date Chinese paper chart on board showing the limits of the dredged deepwater channel. On that basis it was held that the passage plan must have been defective as it could not have been based on appropriate channel data at the time the vessel departed the loading port. The tribunal also found that as a result the Master and deck team failed to alert the pilot to his errors and failed to attempt any action to avoid the grounding. Therefore, it was evident that the vessel was unseaworthy. However, it was held that the unseaworthiness was not an effective cause of the grounding. We can only assume that the tribunal after evaluating the expert evidence concluded that pilot’s negligence was the main effective cause of the grounding- put differently but for the pilot’s negligence the vessel could have still entered the port in a safe manner despite the fact that the passage plan, based on incomplete data, was defective. This is obviously a factual finding, and it is hard for us to comment on without having access to the expert evidence that the tribunal had the chance to see.
That said it would have been very interesting to see how the tribunal would have reacted to the point raised by the charterers: i.e. if the port had been deemed unsafe and unseaworthiness was found to be an effective cause of the loss. In that case, would the charterer be able to avoid liability without having the need to demonstrate that the Vessel’s unseaworthiness was a novus actus interveniens which severed the chain of causation between the unsafety of the port and the grounding? Possibly yes, but that is a moot point which needs to be decided on another day.
