Difference between revisions of "JB Cocoa Sdn Bhd v Maersk Line AS - The Maersk Chennai"

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JB Cocoa SDN BHD & Others v Maersk Line AS (The “Maersk Chennai”)

English Commercial Court: HHJ Keyser KC: [2023] EWHC 2203 (Comm): 5 September 2023

Judgment Available on BAILII @ https://www.bailii.org/ew/cases/EWHC/Comm/2023/2203.html

Andrew Leung (instructed by Birketts LLP) for JB Cocoa (Cargo Interests)

Thomas Steward (instructed by Campbell Johnston Clark) for Maersk Line (Contractual Carriers)

CLAIM FOR CARGO DAMAGE ARISING AFTER DISCHARGE: LIABILITY OF CARRIER: WHETHER EXCLUSION CLAUSE IN BILL OF LADING VALID

Summary

In finding for Contractual Carriers, the High Court dismissed the claim of Cargo Interests because, amongst other things, clause 5 in the bill of lading, which stated “the carrier shall have no liability whatsoever for any loss or damage to the goods, howsoever caused, if such loss or damage arises … after … tendering the cargo for delivery”, excluded the carrier’s liability for any damage to the cargo – cocoa beans laden in a container – after its discharge from the vessel.

Case note contributed by Jim Leighton, LLM (Maritime Law), LLB (Hons), BSc (Hons), Solicitor Advocate of England & Wales, IMI Qualified Mediator, LMAA Supporting Member and International Contributor to DMC’s Case Notes

Background

The claimants (JB Cocoa and others) claimed from the defendant (Maersk Line) EUR185,355.78 as damages arising out of damage to a cargo of cocoa beans carried in a container, under a bill of lading issued at Lagos, Nigeria, on 26 September 2017, on board “Maersk Chennai” from Lagos to Tanjung Pelepas, Malaysia. The container was discharged by 1 October 2017 but was not collected until around 28 November 2017, when the cargo inside was found to be suffering from condensation and mould damage.

The claimants’ case was that the damage to the cargo was caused by the defendant’s breach of its duty to take reasonable care of the cargo until the point of delivery, in particular from the time of discharge until the time of delivery. The defendant’s case was that the terms of the bill of lading exempted it from any liability and that, in any event, it had taken proper care of the cargo, which probably deteriorated on account of inherent vice.

The bill of lading, which was subject to English law, materially provided that:

"5. Carrier's Responsibility: Ocean Transport

5.1 Where the Carriage is Ocean Transport, the Carrier undertakes to perform and/or in his own name to procure performance of the Carriage from the Port of Loading to the Port of Discharge. The liability of the Carrier for loss of or damage to the Goods occurring between the time of acceptance by the Carrier of custody of the Goods at the Port of Loading and the time of the Carrier tendering the Goods for delivery at the Port of Discharge shall be determined in accordance with Articles 1-8 of the Hague Rules save as is otherwise provided in these Terms and Conditions. These articles of the Hague Rules shall apply as a matter of contract.

5.2 The Carrier shall have no liability whatsoever for any loss or damage to the Goods, howsoever caused, if such loss or damage arises before acceptance by the Carrier of custody of the Goods or after the Carrier tendering the cargo for delivery…”

Judgment

Having set out the background to the dispute, the relevant terms of the bill of lading, the parties’ respective arguments and reviewed the case law, the Judge proceeded to address the key facts and the law applicable thereto.

In relation to the cause of the damage to the cargo, the Judge accepted that, on the evidence taken as a whole, the probable cause of the damage was the prolonged delay in the cargo remaining in the container between the discharge of the container from the vessel and its devanning (the removal of the cargo from the container) at Tanjung Pelepas.

Having so decided, the Judge had to consider whether or not the terms of the bill of lading were such as to exempt the contractual carrier from liability for the resulting damage to the cargo. Put another way, when did the defendant’s responsibility for the cargo end?

The Judge noted that, as The “Giant Ace” (fn.1) made clear, the Hague Rules apply to the contract of carriage only between loading and discharge. That alone did not mean carriers could have no responsibility before loading or after discharge: it was a matter that depended on the terms of the contract. That required the terms of the bill of lading to be considered.

Clause 5.2 contained provisions purporting to limit the temporal extent of the defendant’s responsibility for the cargo. The claimants accepted that the defendant’s liabilities in respect of the cargo were capable of being temporally delimited. The defendant contended that its liabilities were so delimited and relied in that regard on clause 5.

The Judge held that clause 5 did limit the defendant’s liability for loss of or damage to the cargo to loss or damage occurring in the period to which the Hague Rules applied, namely from loading to discharge, with liability for loss or damage occurring before or after that period being excluded.

Accordingly, the claimants were unable to prove that the defendant was contractually liable for the cause of the damage to the cargo, and so the claim was dismissed with costs.

Comment

This judgment is a neat illustration of how the decision in The “Giant Ace” enables contractual carriers under bills of lading subject to the Hague or the Hague-Visby Rules to exclude any liability for damage or loss to the cargo carried occurring before loading and after discharge. However, as the terms of clause 5 in this case illustrate, the wording used must be clear. Thus, it depends on the clarity of language used in the bill of lading as to whether or not liability for cargo loss or damage occurring prior to loading or after discharge will be excluded in any given case.

Footnote 1: FIMBank plc v KCH Shipping Co Ltd [2022] EWHC 2400 (Comm) – see DMC case note [[1]]here - and [2023] EWCA Civ 569 – see DMC case note here