Aprile SPA & Ors v Elin Maritime Ltd

Where cargo is stated in the contract of carriage to be carried on deck and is so carried, it falls outside the Hague or Hague-Visby Rules. The carrier’s obligations are therefore determined by the contract and any applicable common-law terms. An exclusion clause covering loss or damage to deck cargo howsoever arising may exclude liability for both negligence and unseaworthiness. Such clauses are construed as commercial contractual provisions. The words must be clear, but need not be construed narrowly or artificially. The Canada Steamship guidelines are aids to construction, not a mechanical code. Fundamental breach does not automatically prevent reliance on an exclusion clause.

The claimants, cargo interests and insurers, claimed in contract, tort and bailment for cargo lost or damaged during a voyage from Thailand to Algeria. For determination of a preliminary issue, the parties agreed that the disputed cargo had been carried on deck and that relevant charterparty terms had been incorporated into the bill of lading.

The bill of lading stated that the carrier was not responsible for loss or damage to deck cargo, howsoever arising, and that specified packages were carried on deck at the shipper’s or consignee’s risk. The central question was whether those provisions excluded liability for loss caused by the vessel’s unseaworthiness or the owner’s negligence.

1. Preliminary issue answered in the affirmative. On the true construction of the bill of lading, the owner was not liable for loss of or damage to cargo carried on deck, including loss caused by unseaworthiness or negligence.

2. For the purposes of the agreed assumptions, cargo stated to be carried on deck and in fact so carried was outside the definition of “goods” in Articles I(c) and II of the Hague and Hague-Visby Rules. The Rules therefore did not govern the deck cargo. The owner’s obligations were found in the bill of lading, the incorporated charterparty terms and any applicable common-law terms.

3. At common law, absent contrary contractual terms, carriage contracts may contain an absolute implied obligation of seaworthiness before and at the commencement of the voyage. Those default obligations were subject to the proper construction of the express exclusion provisions.

4. Exclusion clauses are construed by the ordinary principles applicable to commercial contracts. Clear words are required, but there is no justification for a narrow or artificial construction. The Canada Steamship principles are useful aids to construction and must not be applied mechanically.

5. The words “howsoever arising” and “howsoever caused”, read in their contractual context, were exceptionally wide. They included negligence. There was no justification for excluding unseaworthiness from the causes covered.

6. The authorities concerning clauses limited to events during transit, including Steel v State Line S.S. Co. and The Maori King, did not conflict with The Imvros. They were distinguishable because the clauses there were construed as applying only after sailing, whereas the clause in The Imvros was capable of applying before and during transit.

7. Whether an exclusion applies to authorised or unauthorised deck stowage is a matter of construction. There is no general rule that fundamental breach prevents reliance on an otherwise applicable exception.

8. Consequential orders were left for further argument.