Seaworthiness – is it worthy of a discussion?

Seaworthy, a term so simple, yet so profound. Let’s see what is possibly at stake in general, on a medium sized (50,000 tonnes deadweight) loaded tanker: loss of millions of dollar worth of cargo, possibility of an irreparable damage to environment, substantial costs of the ship itself, and most importantly, the fate of 20 odd lives on board and their families back home, who eagerly await the safe return of their loved ones. All of it, depending primarily on how seaworthy the ship is, as it sets out to sea to face numerous perils, such as fire, theft and piracy to name a few, but more significantly, the perils of the seas, which at its fury best, can unleash a wrath which an unseaworthy ship cannot possibly endure.

These reasons more than justify the importance given to seaworthiness of a ship from the time shipping trade exists by every entity that is involved with this trade: shipowner, insurer, charterer, cargo shipper and receiver. Its influence extends to various avenues, such as duty of care of shipowner towards its crew, insurance contracts, charterparty contracts, and sales and carriage of goods contracts. However, for keeping it comprehensible, this article will limit its scope to relationship between seaworthiness and charterparty contracts under English law.  

What is the nature of this duty?

Under Common law: In absence of any contractual provision, there is an implied obligation on the shipowner to provide a ship that is seaworthy (as well as cargoworthy, which is implied to be included within seaworthiness, further discussed below). It is an ‘absolute’ obligation imposing a much stricter liability on the owner as compared to only ‘due diligence’. Any loss attributable to unseaworthiness will be an owner’s liability even if it was not discoverable. However, as described by Lord Justice Diplock in The HongKong Fir [1962] 2 QB 26 (CA), breach of this obligation is considered to be an innominate term, thus allowing repudiation of contract only if going to the root of contract, and award of damages cannot be considered as an effective remedy to the affected party. Freedom, at the same time, remains with the parties to include an explicit clause which dilutes this stringent absolute requirement. 

Under Hague or Hague Visby rules: In event of incorporation of these rules into charterparty by clause paramount, or by other express means, the absolute duty to provide a seaworthy ship at common law is replaced by provisions of these rules. Accordingly, as per Art III(1) of the rules, the ‘carrier’ shall be bound to exercise ‘due diligence’ to make the ship seaworthy, cargoworthy and properly man, equip and supply the ship. This provision, in addition to all secondary layer of possible defences (discussed below) which these rules provide under Art IV, makes it so much more beneficial for owners to include a clause paramount in their charterparty. Not surprisingly, it is recommended to do so by most of the P&I clubs as well.

Who is the ‘carrier’?

The term ‘carrier’, as can be seen by various judgements, is not only restricted to the owner and his servants on board, but is also deemed to extend to third parties ashore who can directly influence the seaworthiness of the vessel. In The Kamsar Voyager [2002] 2 Lloyd’s Rep 57 (Comm), piston suppliers failed to observe due diligence when they supplied an incompatible spare piston to the ship, and this resulted in the ship being declared unseaworthy due to carrier’s failure to observe due diligence. It is imperative though, that negligence by ship building yard or previous owners is not imposable on the present owners, provided due diligence was done by the present owners when the ship came under their ‘orbit of influence’, as adjudged in Union of India v Red Amsterdam [1963] 2 Lloyd’s Rep 223.

You can’t keep the ship seaworthy at all times!

Every seafarer or anyone who manages a ship will agree to the fact that it is impossible to keep a ship seaworthy at all times. Circumstances on board can turn messy anytime, and it is seemingly an impossible task to keep a ship seaworthy at every moment of voyage!

In a voyage charter, unless expressed otherwise in the contract, the obligation of seaworthiness is to be performed at commencement of loaded voyage. The timing of this test is same for common law, and for Hague or Hague Visby Rules. Further, charterer may have an express requirement to provide a seaworthy ship at the date of the charter, or at any other specified event.

Under a time charter, it is common for vessels to be sub-chartered for further voyage charters, and thus deemed to undergo the test of seaworthiness at and before commencement of each loaded voyage as above. Contractual obligations may further make it necessary for vessel to be seaworthy at commencement of ballast voyage as well, as discussed in Adamastos Shipping v Anglo-Saxon Petroleum [1958] 2 WLR 688 (HL). Going a step further, some charters may have an express clause for ‘continuous’ seaworthiness obligation, and in such scenario, impose an obligation on the shipowner to maintain the vessel in a seaworthy state at all times, as seen in Snia v Suzuki (1924) 18 Lloyd’s Law Rep 333 (CA). Any event which renders the ship unseaworthy can thus lead to owner being in breach of contract and charterer being remedied in accordance with stipulated terms of the contract, till the moment seaworthiness is restored.

Common to both charters, there can also be an express requirement to maintain compliance with international safety regulations, or amendments of conventions coming in force at a time in future, as it occurred in The Elli [2008] EWCA Civ 584, [2008] 2 Lloyd’s Rep 119. In this case, owner’s inability to comply with double hull requirements under new MARPOL rules led to the ship being declared unseaworthy and owner in breach of contract. 

Finally, there’s something called ‘doctrine of stages’. There are instances, when a long voyage cannot be completed without making a pit-stop in between, as often is the case, for need of bunkering or other necessities, consequently executing the voyage in separate ‘legs’. In such an event, the requirement is for a vessel to be adequately stocked up and fit, and thus be seaworthy at commencement of each leg. The choice of bunkering port has to be reasonable and should ideally lie on the customary route, with the shipowner getting the choice to choose the same as per his convenience and cost effectiveness, as elaborately discussed and upheld in favour of owners by the House of Lords in Reardon Smith v Black Sea & Baltic General Insurance [1939] AC 562 (HL). 

What can cause unseaworthiness?

The test is, in very broad terms, given by Lord Justice Scrutton in FC Bradley v Federal Steam (1926) 24 Lloyd’s Law Rep 446, which requires that ‘the ship must have that degree of fitness which an ordinary careful owner would require his vessel to have at the commencement of her voyage having regard to all the probable circumstances of it. Would a prudent owner have required that it (the defect) should be made good before sending his ship to sea, had he known of it?’ As will be seen below, limits of this test are being substantially pushed by courts.

It is a well-accepted fact that there cannot fundamentally be an all-inclusive list of factors that can be enlisted to cause a vessel to be considered as unseaworthy. From lack of adequate qualified number of men on board (The Hongkong Fir [1962] 2 QB 26 (CA)), to inadequate familiarization of crew with fire-fighting appliances (The Eurasian Dream [2002] EWHC 118, [2002] 1 Lloyd’s Rep. 719), to negligence by third parties with respect to supply of critical machinery on board (The Kamsar Voyager [2002] 2 Lloyd’s Rep 57 (Comm)), to unseaworthiness due to wrong declaration of packaged goods by shipper causing fire and loss of vessel (The Kapitan Sakharov [2000] 2 Lloyd’s Rep 255 (CA)), the list is endless! A final nail in the coffin, it seems, is the recent judgement of The CMA CGM Libra [2020] EWCA Civ 293, [2020] EWCA Civ 293, wherein not only an error in passage plan (missing out on highlighting a T&P correction on chart) led to the ship being declared unseaworthy, but interestingly, owners were held to be in breach of the seaworthiness obligation under Art III(1) of HVR to observe due diligence and subsequently could not claim recovery from a substantial General Average claim after the vessel’s grounding off the coast of Xiamen in China. 

My ship is defect-free, but I can’t carry the cargo!

Axiomatically, an essential aspect of seaworthiness is also its cargoworthiness: the ability to safely load, carry and discharge the nominated cargo. One of the key examples for same being The Benlawers [1989] 2 Lloyd’s Rep 51 (Comm), where the ship was declared unseaworthy by virtue of its uncargoworthiness to load the nominated cargo of onions. Further, with respect to cargo, it is not only the property of the cargo and condition of holds, but also the stowage of a cargo that can render the ship unseaworthy, as seen in The ER Hamburg [2006] EWHC 483 (Comm), [2006] 2 Lloyd’s Rep 66.

OK, my ship was unseaworthy, but did it cause the loss?

An important question that comes to one’s mind, and the court’s as well, is that although unseaworthiness can be caused due to ‘n’ number of issues on board a ship, its significance comes into play only if a loss suffered by another party can be attributed to the unseaworthiness of the vessel, with a direct causation link between the two. It would be extreme injustice if failure of a generator in engine room due to incompatible lubricating oil, causing unseaworthiness of the ship, can be attributed to loss of coal cargo in a hold, with no possible connection between the two!

Who has the burden of proof?

As adjudged by the House of Lords in Smith Hogg v Black Sea [1940] AC 997 (HL), under common law, the onus is on claimants to prove unseaworthiness and that it is one of the proximate causes of the loss. The onus then shifts on the carrier, who if wishes to establish that loss was due to some other covered exception in the charterparty, must demonstrate the extent of loss that was caused due to that exception, else he incurs complete liability for the loss.

If Hague or Hague Visby rules have been incorporated, once the claimant proves unseaworthiness and that the loss is attributed to unseaworthiness, it becomes owner’s responsibility to prove that due diligence had been done by them, as adjudged in Minister of Food v Reardon Line [1951] 2 Lloyd’s Rep 265 (Comm). Further, as explained in The Eurasian Dream [2002] EWHC 118 (Comm), [2002] 1 Lloyd’s Rep 719, owner’s entitlement to rely on any exception under Art IV of these rules is dependent upon them first proving that due diligence had been adopted before the ship set out to sea. 

Conclusion

Having touched upon all perspectives of seaworthiness, it is now clear that the charterer, shipowner’s team ashore, or a Master on board needs: first to be aware of and understand the importance and significance of the seaworthiness clause included in the charterparty, second and above all, to diligently perform all endeavours that need to be taken for keeping ‘her’ in a truly seaworthy state, to safeguard the worthy lives on board, the ship itself, the cargo being carried on it and the marine environment.