Compania Sud Americana De Vapores SA v Sinochem Tianjin Ltd (Aconcagua)

Rejecting one proposed cause of loss does not, without more, establish an alternative cause. The court must assess the whole evidence while preserving the claimant’s burden of proof.

In dangerous-cargo cases, abnormal characteristics may be proved by inference from expert evidence, comparable cargo, manufacturing standards and the circumstances of the incident. Proper carriage and dangerous nature are ordinarily opposite sides of the contractual risk. Where carriage cannot be faulted and the cargo is inherently dangerous, liability will generally follow.

An explosion occurred aboard the Aconcagua after calcium hypochlorite shipped by Sinochem was carried by CSAV under a bill of lading subject to the Hague Rules. CSAV settled the vessel owners’ arbitration claim and sought damages from Sinochem for shipment of dangerous cargo.

The High Court accepted CSAV’s case, finding that bunker heating had no causative effect and that the cargo had an abnormally low critical ambient temperature. The judgment was reported at [2010] 1 Lloyd's Rep 1. On a limited appeal, Sinochem argued that the judge had inferred liability merely from rejecting bunker heating and had failed to establish that the cargo was dangerous. The central issue was whether the judge had properly reached that conclusion from the evidence as a whole.

The appeal was dismissed. Lord Justice Longmore gave the principal judgment, with Lord Justice Stanley Burnton and Lord Justice Maurice Kay agreeing.

1. The trial judge had not concluded that the cargo was dangerous merely because Sinochem’s bunker-heating theory failed. That conclusion followed findings about the variable and contaminated Jingang samples, poor manufacturing standards and inadequate quality control, together with Professor Gray’s back calculations. The judge was entitled to prefer Professor Gray’s evidence, and the limited permission to appeal did not permit a challenge to that assessment.
2. The claimant retained the burden of proving its case. The judge had considered the evidence as a whole and had not simply resorted to the burden of proof because one possible cause had been rejected. The finding that the cargo was dangerous was therefore open on the evidence, even though its precise characteristics could not be established with complete precision. No expert evidence required every quadritainer to have an abnormally low critical ambient temperature.
3. Rhesa Shipping S.A. v Edmunds (The Popi M) [1985] 1 WLR 948 established that rejecting one possible cause does not necessarily prove another. It did not assist Sinochem because the judge had not made that error. The case was also a marine insurance case involving a lost vessel and a highly improbable alternative cause, whereas dangerous-cargo cases ordinarily involve the inherent quality of the cargo or mismanagement by the ship.
4. The principle stated in The Athanasia Cominos [1990] 1 Lloyd's Rep 277 was endorsed. Proper carriage and dangerous nature are opposite sides of the same contractual risk. Where even accepted methods of carriage cannot eliminate the risk, simple bad luck falls on the carrier. Calcium hypochlorite was not within that exceptional category. Since the carriage could not be faulted and the cargo was shown to be inherently dangerous, the claim was likely to succeed.

• High Court (Commercial Court) The Honourable Mr Justice Christopher Clarke accepted CSAV’s case and found that the calcium hypochlorite was dangerous and that bunker heating had no causative significance. The judgment was reported at [2010] 1 Lloyd's Rep 1.
• Court of Appeal (Civil Division) The appeal was dismissed. The court upheld the trial judge’s construction of his judgment and his evidential findings.