Hague Rules: Dangerous Goods And Negligent Stowage

Compania Sud Americana de Vapores S.A. v. Sinochem Tianjin Import & Export Corp. (The Aconcagua) [2009] EWHC 1880

The Aconcagua is the first dangerous goods case to deal directly with a carriers' right to recover an indemnity under Art IV rule 6 of the Hague Rules where loss arises from a combination of the shipment of dangerous cargo and a breach of the carriers' obligation to properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods under Article III rule, 2.

On 30 December 2008, an explosion took place in the no 3 hold of the m.v. Aconcagua off Ecuador causing widespread damage to the vessel and her cargo. The cause of the explosion was self ignition of a container of calcium hypochlorite, which is a dangerous cargo and had been declared as such. The IMDG Code required the cargo to be stowed "away from" sources of heat. Despite this, the cargo was stowed in a position where it was surrounded on 3 sides by a bunker tank, which was heated during the voyage.

The vessel was on time charter to CSAV, who paid US$27,750,000 in settlement of the shipowners' claim. CSAV then pursued a claim against Sinochem, the shippers of the container, for breach of the terms of the bill of lading. The bill of lading was subject to the Hague Rules, under Art IV, rule 6 of which the shipper is liable for all damages and expenses directly or indirectly arising out of or resulting from the shipment of dangerous cargo to which the carrier has not consented, with knowledge of the nature of the goods.

CSAV admitted that the storage of the container next to the bunker tank was negligent. However, they contended that:

The stowage of the cargo was not the cause of the explosion as it was a rogue batch of calcium hypochlorite with an abnormally high thermal instability, that exploded at temperatures ordinarily to be expected on board the vessel during the voyage. If the cargo had not been abnormal, it would not have exploded and any self heating would have been negligible. When the cargo was loaded at Busan in Korea, bound for San Antonio, the vessel was not unseaworthy because the bunker tank in question was not needed for the voyage. The tank was heated because of a decision of the Chief Officer to use it as opposed to others available. His negligent decision did not mean that the vessel was unseaworthy at the commencement of the voyage. Additionally, his decision was "an act, neglect or default in the management of the vessel", in...