Parsons Corporation & Ors v CV Scheepvaartonderneming Happy Ranger

Under Article III, rule 1 of the Hague-Visby Rules, a carrier’s non-delegable duty to exercise due diligence to make a vessel seaworthy generally begins when the vessel enters the carrier’s ownership, possession, service or control. The carrier is not ordinarily responsible for latent construction defects arising before that time. After delivery, however, the carrier must act on knowledge acquired during construction and handover. It cannot rely mechanically on classification certificates or tests which do not establish that safety-critical equipment was adequately tested. A double-hook crane requires separate proof testing of the hooks where testing the crane does not test the hooks to the loads they may experience. Failure to investigate and test such equipment may constitute a breach of Article III, rule 1. Planning and conducting a heavy lift without accounting for hook angles and loads may also breach Article III, rule 2.

The claimants sought damages after a crane hook on the defendant’s vessel broke while lifting a process vessel at Port Marghera. The process vessel was seriously damaged. The contract of carriage incorporated the Hague-Visby Rules.

The parties agreed that the vessel was unseaworthy because of the latent defect in the hook and that the defendant bore the burden of proving due diligence under Article III, rule 1. The principal issues were when the vessel entered the defendant’s “orbit”, whether due diligence had been exercised after delivery, whether any breach caused the damage, and whether the loading operation was conducted properly and carefully under Article III, rule 2.

1. Pre-delivery responsibility. Applying W. Angliss v Peninsular and Oriental Steam Navigation Co. [1927] 1 KB 456, The “Kapitan Sakharov” [2000] 2 Ll.R. 255 and The “Muncaster Castle” [1961] AC 807, the vessel did not enter the defendant’s orbit before delivery on 16 February 1998. The buyer’s design input, attendance during construction and testing, pre-delivery familiarisation by officers, and preparation of lifting plans did not transfer responsibility before delivery.
2. Due diligence after delivery. The defendant failed to discharge its burden under Article III, rule 1. It should have recognised that the double-hook arrangement caused the load on each hook to vary with the angle and that crane testing did not adequately proof-test the hooks. The hooks were “loose gear” under the applicable Lloyd’s rules and required separate proof testing. In any event, separate testing was required by ordinary competence and common sense. The defendant could not shelter behind Lloyd’s or DHI certificates which did not establish adequate hook testing.
3. The defendant also failed to exercise due diligence in obtaining a temporary increase in the cranes’ safe working loads. The submitted lift plan was misleading because it did not disclose the relevant double-hook loading problem. Lloyd’s’ exemption was granted without proper inspection or consideration of the risks.
4. These breaches were causative. A proper proof test would have revealed the defect before the lift. The breaches were legally effective causes of the accident.
5. Loading operation. The loading was not carried out properly and carefully under Article III, rule 2 because the defendant planned and proceeded with the lift without calculating hook angles or individual hook loads. However, causation was not established for the separate allegation that the operation should have been stopped when a crane readout exceeded the permitted load.
6. The claimants proved their losses. Judgment was therefore for the claimants, subject to determination of any applicable package limitation and the precise form of order.

Not stated in the judgment.