Maersk A/S v Sree Rayalaseema Hi-Strength Hypo Limited

Contractual packaging warranties for dangerous goods can require a shipper to pack cargo so that it is fit for carriage and complies with applicable requirements. Breach may trigger an indemnity for losses caused by the cargo, alongside a common-law duty to take reasonable care.

A claimant exposed to third-party claims may recover a reasonable settlement without proving actual liability to the third party. Reasonableness is assessed at the settlement date, on a generous range-based standard, with the defendant bearing the evidential burden of showing unreasonableness. An exclusive English jurisdiction clause ordinarily supports anti-suit relief absent strong reason, and may support damages and mandatory orders to discontinue foreign proceedings.

Maersk claimed damages and contractual indemnities from Sree after calcium hypochlorite shipped in containers decomposed, causing an explosion and fire aboard the Maersk Seoul, and a further fire during cross-stuffing ashore. Maersk also claimed losses arising from proceedings brought by Sree in India in breach of an alleged exclusive English jurisdiction agreement.

The defendant did not participate in the trial despite notice. The court considered whether the carriage terms were incorporated, whether Sree packed the containers in breach of contractual and common-law duties, whether the losses and settlements were recoverable, and whether damages and permanent anti-suit relief should be granted.

1. Trial in the defendant’s absence. The court proceeded under rule 39.3 of the Civil Procedure Rules 1998. The claimant still had to prove its case on the evidence and had to draw attention to points potentially benefiting the absent defendant. Unpleaded defences, or defences for which the defendant bore the burden of proof, ordinarily need not be considered unless they obviously undermined the claim. The approach in Maersk Guine-Bissau, SARL v Almar-Hum Bubacar Balde SARL [2024] EWHC 993 (Comm) was applied.
2. Contract, packing and causation. Applying The Joker [2019] EWHC 3541 (Comm), English law governed incorporation of the law and jurisdiction clause. The booking confirmations and bills of lading gave sufficient notice of the Safmarine Terms. Sree had stuffed the containers. The court found that the fibreboard boxes formed block stows which failed to allow adequate air circulation under the Hague Rules, and that the resulting violent decomposition caused the incidents. There was no evidence that solar heating or Maersk’s conduct was the operative cause.
3. Liability. Sree breached the contractual warranties in clauses 21.2 and 14.3 of the Safmarine Terms. The related indemnities in clauses 21.3 and 15.2 applied. Sree also breached the common-law duty described in The Orjula [1995] 2 Lloyd's Rep 395 to take reasonable care that goods delivered for carriage were fit for carriage and would not cause physical damage.
4. Loss and settlements. Loss caused by reasonable mitigation efforts was treated as caused by the original breach. Applying Biggin & Co Ltd v Permanite Ltd [1951] 2 KB 314 and related authorities, Maersk did not have to prove that it was liable to the third parties, only that the settlements were reasonable and not too remote. The settlements were within the range reasonably available at the time. Damages could be awarded in US dollars because that currency most truly reflected the loss. Alternative damages and indemnity bases did not permit double recovery.
5. Jurisdiction and relief. Sree’s Indian proceedings breached the exclusive English jurisdiction clause. The costs of resisting those proceedings were recoverable as damages. Applying Donohue v Armco Inc [2001] UKHL 64 and Enka Insaat AS v OOO Insurance Company Chubb [2020] UKSC 38, an anti-suit injunction ordinarily followed absent strong reason. A mandatory injunction requiring discontinuance, and restraining applications for foreign anti-suit relief, was appropriate.
6. Orders. Maersk was entitled to US$13,178,280.51 for the cargo-related losses, further damages of US$168,064.48 and £16,296 for the Indian proceedings, a declaration concerning additional Indian-proceedings costs, and mandatory injunctive relief. The precise terms of relief were left for consequential determination.

This was a first-instance trial. The judgment records earlier interim anti-suit injunction proceedings in the same litigation, including Henshaw J’s decision on 19 February 2024, cited as [2024] EWHC 3668 (Comm). No appellate decision is stated.