JB Cocoa Sdn Bhd & Ors v Maersk Line AS

A carrier’s Hague Rules liability ordinarily ends when the goods are discharged, unless the contract provides otherwise. The expressions “discharge” and “delivery” describe different concepts. A bill of lading may validly limit responsibility for loss or damage occurring after discharge. Where post-discharge damage is alleged, the contractual allocation of risk must be construed as a whole. A carrier may nevertheless be liable during any period for which it remains responsible if reasonable care requires ventilation or other steps to prevent deterioration. Inherent vice requires more than a cargo’s susceptibility to damage: the carrier must show that reasonable care could not have prevented the damage, or that it took such care and the damage occurred despite it.

The claimants sought €185,355.78 for mould and condensation damage to cocoa beans carried from Lagos to Tanjung Pelepas under a bill of lading. The cargo was discharged on 30 September and 1 October 2017 but remained in sealed containers until late November, when extensive damage was discovered. JB Cocoa claimed as owner in negligence, JB Foods as lawful holder and indorsee of the bill of lading, and the insurers by subrogation or assignment.

The principal issues were whether the cargo was sound when loaded, whether the damage was caused by inherent vice or prolonged post-discharge containerisation, when the carrier’s responsibility ended under the bill of lading, and whether the claimants established standing, loss and mitigation. A separate claim concerned alleged short delivery.

1. Claim dismissed. The cargo was damaged by prolonged containerisation between discharge and devanning at Tanjung Pelepas. It was not shown to have suffered from inherent vice. The damage therefore occurred after the period during which the Hague Rules applied.
2. The Hague Rules governed the carrier’s responsibilities from loading until discharge. “Discharge” was not synonymous with “delivery”. Any responsibility after discharge depended on the bill of lading and the law of bailment.
3. Construed as a whole, clause 5 limited liability for loss or damage to the period from loading to discharge. “Tendering the Goods for delivery” was equated with discharge, not with physical delivery. Clause 22.1 imposed no obligation to give an arrival notice and such notice was not necessary for tender of delivery. Clause 8 concerned loss caused by delay, not failure to take reasonable care of the goods.
4. JB Foods therefore had no contractual claim for damage occurring after discharge. JB Cocoa had not proved ownership when the damage occurred. Even if it had done so, it had not established a negligence claim outside the contractual terms of the bill of lading. The insurers’ claim consequently failed.
5. Had the carrier remained responsible after discharge, it would have been liable for failing to take reasonable care by opening the container doors to ventilate the cargo. The carrier’s reliance on inherent vice failed because the evidence did not show that the cargo was unfit to withstand an ordinary voyage or that reasonable care could not have prevented the damage.
6. The alternative quantum assessment was €154,717.45. The mitigation defence was rejected because the proposed segregation, drying and analysis were costly, uncertain and not shown to have reduced the loss. The short-delivery claim failed on the facts and would in any event have been barred by clause 11.3.