Grounding and Failure of Refrigeration: Whose Liability for Loss of and Damage to Cargo and Contribution towards General Average?

August 2000

(Sea Venture Volume 19)

(A case report on Rey Banano del Pacifico CA & Ors .v. Transportes Navieros Ecuatorianos & Anr.¹ )

Facts

The first claimant, RB, chartered a refrigerated cargo vessel from the first defendant, Transnave, for the carriage of a cargo of fresh green bananas from Ecuador to Libya and Russia. On the voyage the vessel had to turn towards Cartagena in Colombia to disembark the body of a crew member who had died. Approaching the port, the vessel ran aground on a sandbank. Some of the bananas had to be unloaded to get the vessel off the bank and they were lost. While the vessel was on the bank one of its three generators failed. The claimant cargo interests, worried about the delay, sold the cargo at a reduced price CIF west coast Italy. The original bills of lading were annulled and new bills were issued for the original cargo less the bananas taken off to refloat the vessel. The vessel was further delayed by the need to replace successive portable generators which failed. The cargo was discharged at Genoa and some was found to be damaged by ripening or over chilling.

Claims

The claimants sought damages for breach of the charterparty on the basis that Transnave failed to exercise due diligence to make the vessel seaworthy at the commencement of the voyage or properly man or equip the vessel or care for the cargo, by reason of out of date charts and navigational equipment being on board, the conduct of the master and the condition of the refrigeration equipment.

Transnave's case was that the vessel was seaworthy and properly equipped, but that the grounding was caused by negligence of the master or third officer and was so excluded from owner's responsibility under Art IV r 2 (a) of the Hague Rules, and the damage to the cargo resulted from delay caused by matters excluded from liability. Transnave claimed a contribution towards general average from RB.

There was also a claim, under the final bills of lading, by the receiver in Genoa that because of the temperatures at which the cargo had been kept it was at the limit of preservation and would ripen very quickly.

Issues

1. The cause of the grounding.

2. Whether there was unseaworthiness by a failure properly to man or equip the vessel.

3. The losses on discharge.

Held

1. The third officer was seeking to navigate only by single radar distance and bearing fixes from what he believed to be Cartagena point. In fact he was mistaken and had taken bearings from a different point. That explained how the vessel was proceeding directly towards the sandbank when the third officer believed he was on course. References to lack of a light on the bank, when one was shown on the out of date chart on board, were an afterthought. The fact that had there been a light on the bank, the vessel might not have grounded because it would have acted as a warning was not sufficient for the claimants to establish that the use of the chart was legally causative of the grounding. Had the chart shown there was no light, the navigation of the third officer and the grounding would have happened just as they did. The navigation was negligent and that was the only effective cause of the grounding.

2. The master's conduct was open to severe criticism but Transnave had not failed properly to man the vessel. The state of the charts and navigational aids on board the vessel was inadequate but there was no causative breach of the obligation properly to equip the vessel because the master or third officer would not have consulted up to date publications had they been available. Accordingly the claim for the loss of the cartons caused by the attempt to refloat the vessel failed and the counterclaim for general average succeeded. The loss on the renegotiation of the sale contract at a lower price also resulted from the grounding and Transnave was not liable.

3. From the start of the voyage there was a failure properly to monitor the condition of the cargo because of deficiencies in the cooling system and temperature controls. The vessel also had insufficient power to preserve the cargo in the event of failure of one of the three generators, as in fact happened. The condition of the vessel and its operation caused the losses on discharge of the cargo and Transnave was liable for them. Properly cared for, the cargo should have arrived at Genoa in merchantable condition notwithstanding the grounding and search for a working replacement generator. Transnave was entitled to a small credit for a very small proportion not exceeding half a per cent of the bananas which would inevitably have ripened on the voyage.

With thanks to Edward Turner of Sinclair Roche and Temperley for preparing this article.²

^{1Queen's Bench Division (Commercial Court) - Langley J - 24.02.00
2This article was published on the Steamship website in May 2000}