Alize 1954 and another v Allianz Elementar Versicherungs AG and others

Under article III rule 1 of the Hague Rules, a carrier must exercise due diligence in the work of making a vessel seaworthy. The obligation is non-delegable and may be breached by negligent navigation undertaken before or at the beginning of the voyage.

The nautical fault exception in article IV rule 2(a) cannot excuse a causative breach of that overriding obligation. Unseaworthiness does not require an inherent attribute of the vessel. Ordinarily, the question is whether a prudent owner, knowing of the defect, would have required it to be remedied before sailing. A defective passage plan may therefore render a vessel unseaworthy where it endangers the vessel. Remediability depends on whether the defect could reasonably be expected to be corrected before danger arose.

The owners of the container vessel CMA CGM LIBRA sought approximately US$800,000 in unpaid general average contributions following the vessel’s grounding while leaving Xiamen. The cargo interests alleged actionable fault because the vessel sailed with a defective passage plan and working chart which omitted a warning about uncharted depths outside the buoyed fairway.

Teare J dismissed the claim, holding that the defect caused the grounding, rendered the vessel unseaworthy and resulted from want of due diligence: [2019] EWHC 481 (Admlty); [2019] Bus LR 1453. The Court of Appeal dismissed the owners’ appeal: [2020] EWCA Civ 293; [2020] Bus LR 1590.

The Supreme Court considered whether seaworthiness was confined to the vessel’s attributes rather than acts of navigation, whether the nautical fault exception applied, and whether employing a competent crew and supplying adequate equipment and systems discharged the carrier’s duty of due diligence.

1. Appeal dismissed unanimously. Lord Hamblen, with whom Lord Reed, Lord Briggs, Lady Arden and Lord Leggatt agreed, held that the defective passage plan involved want of due diligence to make the vessel seaworthy. The owners therefore had no entitlement to the disputed general average contributions.

2. Article III rule 1 of the Hague Rules imposes an overriding obligation. Article IV rule 2 exceptions, including the nautical fault exception, cannot be relied upon where loss was caused by a failure to exercise due diligence to make the vessel seaworthy. Navigation and seaworthiness are not mutually exclusive categories. Negligent navigation before or at the beginning of the voyage may cause, or itself constitute, unseaworthiness. The temporal limit is inherent in the wording of article III rule 1: comparable negligence after commencement of the voyage may fall within article IV rule 2(a).

3. Unseaworthiness is not subject to an “attribute threshold” requiring an inherent attribute of the vessel or cargo. Seaworthiness extends beyond physical equipment to such matters as charts, plans, systems and crew competence. The governing question is whether the relevant condition sufficiently affects the vessel’s fitness to carry the goods safely on the contractual voyage.

4. The prudent owner test remains appropriate in most cases: would a prudent owner, knowing of the defect, have required it to be remedied before sending the vessel to sea? It is adaptable to the vessel, cargo, voyage, contemporary knowledge and prevailing standards. In boundary cases, the court must first determine whether the condition sufficiently affects the vessel’s fitness to engage the doctrine. A remediable defect may avoid unseaworthiness where it could reasonably be expected to be corrected before danger arose.

5. A passage plan is an essential navigational tool and part of the vessel’s documentary outfit. A vessel may be unseaworthy if she begins a voyage without a passage plan or with a defective plan which endangers her. Here, the omitted warning was unlikely to be added during execution or monitoring. The prudent owner would have required the defect to be corrected before departure.

6. The due diligence obligation is non-delegable. It applies to the work of making the vessel seaworthy, regardless of whether that work is entrusted to servants, agents, navigators, engineers or repairers. It is not discharged merely by appointing competent officers, providing adequate equipment, establishing proper systems and conducting audits. The master and second officer prepared the passage plan while acting within the carrier’s sphere of responsibility, so their want of due diligence was attributable to the carrier.

1. United Kingdom Supreme Court: The owners’ appeal was dismissed unanimously: [2021] UKSC 51.
2. Court of Appeal: The owners’ appeal was dismissed, affirming the finding of actionable unseaworthiness and want of due diligence: [2020] EWCA Civ 293; [2020] Bus LR 1590.
3. High Court, Admiralty Court: Teare J dismissed the owners’ claim for general average contributions: [2019] EWHC 481 (Admlty); [2019] Bus LR 1453.