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'''Background'''
Coffee beans in bags were carried by the carrier in dry, unventilated containers from Colombia to Northern Germany. The bills of lading were on LCL/FCL terms, the effect of which was that the carrier’s stevedores were responsible for preparing and stuffing the containers. Before stuffing, the bare corrugated steel of the containers was lined with kraft paper. Upon outturn, most of the bags had suffered condensation damage, although the damage was relatively minor. Moisture in warm air rising from the stow had condensed on contact with the cold roof of the container wetting the bags at the top and the sides of the stow. Conflicting evidence was put before the judge on whether a single or double layer of kraft paper had been used to line the containers, and on the weight of that paper.
(3) Sound system
It is well established that the obligation to care for and carry the goods “properly” under Art III r.2 means “in accordance with a sound system”. In the judge’s view, a system could only be regarded as sound if the carrier could demonstrate a reliable basis for concluding that its lining arrangements could be expected to prevent condensation damage during the contracted carriage, such as a theoretical calculation or an empirical study on the moisture absorption and retention of a certain weight or type of paper. However, the judge had misdirected himself on the law in relation to Art III Rr.2. He had sought to impose an obligation on the carrier which went beyond what the law requires. The law did not require a carrier to adopt a system which would prevent damage, but rather, a sound system under all the circumstances in relation to the general practice of carriage of goods by sea. In the judgment of the Court of Appeal, if the judge had applied the law in relation to what constitutes a sound system and the burden of proof correctly, he would have concluded that the claimant had failed to establish that the carrier’s system of lining the containers was not a sound system. Therefore, the carrier’s defence of inherent vice, succeeded.
(4) Inevitability of Damage
There was no appeal against the judge’s finding on the bill of lading terms, so even though the carrier had appealed against the judge’s finding as to the temporal application of the Hague Rules, the ground of appeal was academic. Nonetheless, the Court of Appeal was urged to decide the issue, and it found that the judge’s analysis of the temporal scope of the Hague Rules was correct. Here, the carrier had assumed responsibility for the dressing and stuffing of the containers, so that those services formed part of the operation of “loading”, to which the Hague Rules applied.
'''Comment'''
The detailed judgment given by the Court of Appeal is very helpful in that it sets out clearly the way the burden of proof operates under the Hague Rules. It also highlights that the inherent vice exception applies where the loss is caused simply by a normal cargo behaving in the way it does under the circumstances in which it is expected to be carried. It also re-emphasises that the carrier’s obligation to care for and carry the goods properly, that is, in accordance with a sound system, does not require a carrier to adopt a system which would prevent damage, but merely a system which constitutes a sound system in relation to the general practice of carriage of goods by sea. So this will be a welcome decision for ship owners generally.
