Exportadora Valle De Colina SA (t/a Exportadora Santa Elena) & Ors v A.P. Moller - Maersk AS (t/a Maersk Line)

Under a multimodal bill of lading, once cargo is shown to have been delivered in good order and condition but outturned damaged, the carrier must establish that an applicable exclusion caused all or an identifiable part of the loss. The claimant need not prove the precise cause if the carrier fails to establish an exclusion. Where the carrier relies on permissible and excessive interruptions to refrigeration, it bears the burden of proving what loss, if any, was attributable to permissible interruptions. Reduced remaining shelf life may constitute damage even without immediate extensive physical deterioration. Consequential losses remain excluded where the contract contains an effective exclusion, but genuine repackaging and marketing expenses may be recoverable as mitigation costs.

The claimants were Chilean growers, exporters and selling agents of table grapes carried by the defendant in refrigerated containers from Chile to Europe during the 2005/2006 season. Grapes in numerous containers outturned with physical deterioration, elevated temperatures and materially reduced shelf life.

The defendant relied on contractual exclusions for defective packing, inadequate stowage and inherent vice. It also disputed the condition of the grapes on shipment, causation, and the assessment of damages. The central issues were whether the grapes were shipped in good order and condition, whether the alleged exclusions caused the damage, whether excessive refrigeration power-offs caused or contributed to it, and what losses were recoverable.

1. Liability under the bill of lading. The claimants established that the grapes were shipped in good order and condition and were delivered damaged, including through a substantial reduction in remaining shelf life. Damage did not require catastrophic physical deterioration or immediate rejection at discharge.
2. Under clause 6.1, once loss or damage during carriage was shown, the burden lay on Maersk to establish an applicable exclusion. For the special exclusions concerning packing, handling or stowage, Maersk had to show a plausible causal connection, after which the claimants had to rebut the resulting presumption. On the assumed higher standard, the claimants proved that none of those matters caused the damage.
3. The court rejected the cases based on poor pre-shipment condition, inadequate packaging, condensation and short-circuiting in the stowage. Short-circuiting could not explain damage in standard-pallet containers or the observed pattern of deterioration.
4. Maersk’s records showed that, in almost all relevant containers, refrigeration power-offs exceeded permissible operational periods or were unexplained. Those periods constituted breaches. The evidence, including Maersk’s own manual stating that power-offs for chilled cargo should be less than three hours, supported the conclusion that excessive power-offs caused the damage in the relevant containers.
5. Even if causation by excessive power-offs had not been established, Maersk would remain liable because it had not proved that the damage was attributable to a cause for which it was not responsible. The principles in Gosse Millard v Canadian Government Merchant Marine [1929] AC 223 and The Torenia [1983] 2 Lloyd’s Rep 210 applied beyond cases involving contractual exceptions.
6. The recoverable loss was diminution in market value, measured by the difference between sound-arrived value and actual sale value. Genuine repackaging and marketing costs were recoverable in principle. Claims for consequential losses, including salaries, travel and other expenses excluded by clause 8.2, were not recoverable. The claims succeeded, subject to the unresolved evidence concerning certain repackaging costs; claims relating to containers 7 and 40 failed.