Shipowner Not Liable For Cargo Damage Resulting From Poor Stowage

In Yuzhny Zavod Metall Profil LLC v Eems Beheerder B.V. (The "EEMS SOLAR") [2013], the Court was asked to examine whether the shipowner was liable to the lawful holder of the bill of lading for damage caused to the cargo, and found that it was not.

Background

Russian metal trading company Yuzhny Zavod Metall Profil (YZMP), the holder of a CONGEN 1994 bill of lading, took delivery of 411 coils of steel sheets at Novorossiysk, Russia, all with varying degrees of damage. YZMP decided to claim under the bill of lading against the owner, Eems Beheerder B.V., as carrier under the bill of lading. YZMP maintained that the owner was in breach of Article III Rule 2 of the Hague Rules 1924 (incorporated into the bill of lading) whereby the owner is required to "properly and carefully load, carry and discharge the goods".

It was the owner's defence that the Gencon 1994 charterparty was incorporated into the bill of lading. Crucially, the charterparty contained an Owners' Responsibility clause and a Loading and Discharging clause which stated that the cargo was to be loaded "by the Charterers, free of any risk, liability or expense whatsoever" and owners were only to be liable for "want of due diligence."

Facts

Charterers appointed stevedores at load port to load the cargo but their failure to use locking coils meant the stow was not appropriate. The Master was not satisfied with stowage but decided to sail regardless

During the voyage, the vessel experienced heavy weather which led to a strap breaking and a shift in the cargo; the crew were unable to secure the shifted cargo for lack of additional lashing straps, resulting in damage to a number of coils.

The key question was who was responsible for the shifting:

Stevedores: in failing to load and stow the cargo safely and correctly; or Owners: in failing to provide the necessary lashings, equipment and/or crew Decision

The judge concluded that the sole effective cause of damage to the cargo was the vessel not being properly loaded and stowed when she left the port. Locking coils were not used appropriately, and the lashing was not systematic. On a true construction of the bill of lading, owners were not responsible for stowage because the charterparty was incorporated into...