Trafigura Beheer BV v Navigazione Montanari Spa

An in-transit loss clause comparing cargo volumes after loading and before discharge ordinarily addresses losses incidental to the carriage of oil products, including measurement discrepancies and certain losses internal to the vessel. It does not extend to cargo forcibly removed by pirates. The reference to the difference between the two measurements provides a method of quantifying loss, rather than an exhaustive definition of the kinds of loss covered.

Even if piracy loss fell within the clause, wording making owners responsible for in-transit loss would not by itself impose strict liability. The clause must be read with the charterparty as a whole. Exceptions incorporated from the Hague-Visby Rules applied to claims under the in-transit loss clause.

The claim arose from a charterparty for the carriage of premium motor spirit. While the vessel was awaiting orders offshore, armed pirates took control and transferred approximately 5,300 metric tonnes of cargo to another vessel.

The parties agreed preliminary issues concerning the construction of an amended in-transit loss clause. The issues were whether the transferred cargo constituted in-transit loss or lost cargo, and whether any liability under the clause was strict or subject to the charterparty’s exceptions clause incorporating specified Hague-Visby Rules provisions.

1. Transferred cargo. On the natural and commercial meaning of the expression “in-transit loss”, the clause concerned loss incidental to the carriage of oil products. Its measurement formula compared net vessel volumes after loading and before unloading, but did not exhaustively define the types of loss covered. Cargo removed by pirates was materially different from the ordinary measurement discrepancies, evaporation, sediment, undischarged quantities and certain losses internal to the vessel contemplated by such clauses. The transferred cargo therefore was not, and did not occasion, in-transit loss or cargo loss within the clause.
2. Commercial context. The heading and the unusual nature of strict cargo liability in a charterparty supported the owners’ construction. Commercially surprising consequences could be relevant where another construction was reasonably available, although the starting point remained the contractual language.
3. Strict liability. Assuming contrary to the first conclusion that the transferred cargo was within the clause, the word “responsible” did not by itself make the owners strictly liable. The clause gave charterers evidential and remedial benefits, including reliance on the volumetric difference and recovery by reference to FOB value, freight and insurance. It was not thereby deprived of practical effect if the exceptions remained applicable.
4. Interaction with clause 46. The charterparty required the relevant exceptions to apply “in respect of any claim”. There was no sufficient conflict between that wording and the in-transit loss clause. The owners’ liability was therefore subject to the exceptions in clause 46, including the relevant Hague-Visby Rules exceptions.
5. The court rejected an interpretation based on reconstructing negotiations over the standard Trafigura terms. Contractual construction was a unitary exercise directed to the charterparty actually agreed. The preliminary issues were answered for the owners, and judgment was to be entered for the defendants, subject to any further submissions.