An Alternative Unsafe Port Claim

December 2005

The recent case of the "Charlotte C" [2005] EWHC 1974 serves as a reminder that it is not just the charterer who may face claims for damage to a vessel arising from an unsafe port. It is a good example of how English tort law can sometimes allow direct recovery by the shipowner against the port owner/operator.

The vessel had called at Bird Port, Newport, to load a cargo of steel coils. Steel coils were commonly loaded and discharged at this port. She berthed in a NAABSA berth ("not always afloat but safely aground") where it was expected that vessels might take the ground at low water. The concrete bottom of the berth was usually covered with a layer of silt or mud that came in with the tide. This was dredged but only when operational requirements permitted.

After leaving the port, the vessel's bottom was found to be damaged and it was adjudged that the cause was a stray steel coil on which she had rested in the berth. The depth of mud and silt in the berth at the relevant time was between 1 and 1.5m. The Court found that this level was excessive and that the port system for dredging and inspection was inadequate. A proper system would have required daily inspection and regular dredging, which would have revealed the presence of the steel coil and would thus have prevented the accident. The port operator was therefore negligent through failing in its duty of care to ensure that those using the berth could do so without suffering damage. This negligence was causative of the shipowner's loss, and the port operator was therefore liable in damages.

It is worth recording that in this case, there was no dispute between the parties that the port operator did owe a duty of care to the owners of vessels using its berth. This reflects the English common law of negligence and also the statutory duty of care which is imposed under the Occupiers' Liability Act 1957. However, as mentioned below, not all jurisdictions impose such a clear duty.

On the facts as found by the court, there seems little doubt that a charterer who had given a safe berth warranty in respect of the berth at Bird Port would have been found liable to the shipowner for this damage. The well-known test on safety, set out in The Eastern City [1958] 2 Lloyds Rep 127, states (per Sellers LJ):-

"A port will not be safe unless, in the relevant period of time, the particular ship can reach it, use it and return from it without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship."

This type of unchartered obstruction on the bottom of a berth will therefore normally render it unsafe and expose the charterer to a claim in damages.

However, a claim in tort against the port owner or operator may be the shipowner's only route to recovery if, for example, the following circumstances apply:-

(a) There is no warranty as to safety in the charter. Remember, however, that even where there is no express provision for it, a safe port warranty can sometimes be implied into the charter. This will often be the case where the charterer is entitled to choose loading or discharge options from a wide range of unnamed ports. 

(b) Where the warranty is restricted in some way. Some standard form charters restrict the charterers' obligation to one of "due diligence" in nominating a safe port - i.e. would a reasonable, prudent charterer order the vessel to the port or berth in question? If the charterer satisfies that test, then he will be protected from a claim by the owner, even where the port is in fact unsafe. 

(c) Where the charterer becomes insolvent and an action for recovery against him is therefore pointless. 

A charterer who has been found liable in the first instance to the shipowner under a safe berth warranty can, if the law and circumstances permit, look for his own indemnity from the port owner/operator in tort. A claim of this sort under English tort law would not be straightforward because English courts have historically only allowed recovery of financial loss by the party whose property has been damaged. One way to address this problem would be for the charterer to take an assignment of the shipowner's rights against the port operator. But in any event, the existence and extent of the port operator's liability to either the charterer or the shipowner will vary widely from one jurisdiction to another and may also be affected by statutory or contractual immunities. Wherever such incidents occur, a charterer who believes he may be liable to the shipowner under a safe berth warranty would always be well advised to check whether he may have an action in contract or tort for an indemnity against the port operator, and if so, to ensure that he protects the appropriate time limits for that claim while the shipowner's claim under the charter is pending.

 

With thanks to Robert Melvin of Richards Butler for preparing this article.