United Kingdom: Carriage Of Goods: Consequences Of Mis-Declaration

Shippers, forwarders, charterers and liner operators,

among others, face potentially unlimited liabilities for

mis-declared cargoes. Emma Ross, a solicitor with Holman

Fenwick Willan, examines the position under English law and

looks at a recent Chinese case where a shipper and its

surveyors were ordered to pay US$65 million for the

constructive total loss of an aircraft.

A recent Chinese case highlights how important it is for

shippers, forwarders and liner operators to make a correct

declaration of goods for carriage.

CNCCC Dalian, a Chinese state-run company, has been ordered

to pay a record US$ 65 million plus interest,

to compensate the hull insurers of Malaysia Airlines for the

destruction of a plane caused by the Chinese company's

failure to declare correctly a cargo of chemicals. The cargo

was declared as a non-toxic solid, when in fact it was a

corrosive liquid. Canisters leaked during the voyage resulting

in the constructive total loss of the aircraft.

Reports from the Beijing Court's website indicate that

the Court found that the carrier, Malaysia Airlines, was not

required to check whether the cargo corresponded with the

descriptions given in the air waybill, nor was it responsible

for verifying the cargo, packaging or documents presented by

the shipper. Responsibility lay with the shipper, CNCCC Dalian,

and DGM China Ltd, who had carried out a survey of the cargo at

the request of the cargo handling company at Beijing Airport.

The three other defendants, including the cargo handling

company which relied on information given by DGM China Ltd and

CNCCC Dalian, were exonerated.

This case is the latest in a series of dangerous goods

cases, in various jurisdictions, where cargo has been

mis-declared.

As the TT Club highlighted in the press recently, between 5

and 10 per cent of an average container ship's cargo is

declared as hazardous goods. However, it is impossible to know

how much dangerous cargo is not declared as being dangerous.

And on average only 5 of the 166 IMO members report systematic

inspections each year, which results in less than 0.5 per cent

of the declared cargoes being actually inspected.

English law position [for carriage of goods by

sea]:

The common law position is that shippers will be in

breach of an implied undertaking if they load dangerous cargo

without notifying the carrier of the dangerous nature of the

goods, unless the carrier knew or ought reasonably to have

known of the danger posed by the goods...