Court Considers Whether Carrier Adopted Sound System For Carriage Of Cargo

Volcafe Ltd and others v. Compania Sud Americana de Vapores SA [2015] EWHC 516 (Comm)

A recent decision offers guidance as to the courts' approach to a carrier's obligations under Article III(2) of the Hague Rules to properly and carefully load, carry and care for the cargo.

The background facts

The Claimants were consignees under the bills of lading issued in respect of nine consignments of washed Colombian green coffee beans transported by the Defendant container line from Buenaventura in Colombia to various destinations in North Germany, transhipped in Balboa, Panama.

Each of the consignments suffered damage from condensation. The bills of lading recorded receipt in apparent good order and condition. The containers were provided and stuffed by the Defendant carrier. The stevedores lined the containers with Kraft paper before stuffing.

The bills of lading contained a Clause Paramount making the carriage by sea subject to the Hague Rules from the time when the goods were loaded on the ship. The carrier disputed application of the Hague Rules on the basis that the stuffing of the containers by its stevedores occurred before the loading.

The Court considered whether the obligations imposed by the Hague Rules applied to the stuffing of the containers and, further, whether the carrier had breached its duty under Article III(2) of the Hague Rules to properly and carefully load, carry and care for the cargo. The cargo was found to be entirely typical, so the carrier could not rely on any particularities of this cargo to explain the damage.

The Mercantile Court decision

The Court found that, where cargo is loaded into a carrier's containers which are subsequently loaded onto the vessel, it is unrealistic to treat this as anything other than a single loading process. The Court further commented that even if that were not so, the parties are free to agree on what constitutes loading. In this case, the carrier assumed an obligation to stuff its own containers and therefore the contract of carriage included that as part of the loading process. In addition, the Court said that the proper analysis of the claim was that it did not relate to the stuffing process itself, but to the carrier's failure to protect cargo against damage during carriage, which is breach of a duty at the heart of the carriage. The Hague Rules therefore applied.

The Court then turned to consider the carrier's obligations under Article III(2) to properly and carefully care for the...