By Fathima Afrah Sidiqi

Over the last century, technological developments have significantly changed international trade. In response, the shipping industry has progressed to ensure that the development of international trade is in pace with the growing and diverse needs of consumers worldwide. There have been many attempts to codify regulations and standards to protect all parties to a Contract of Affreightment. The best form of protection that could be accorded to cargo owners is that cargo will be transported with due care and diligence. The first step in ensuring this is the presence of a seaworthy vessel. Owing to the importance of this concept in international trade, this article seeks to describe what a seaworthy vessel is, its importance, and on whom this obligation lies.

Seaworthiness At A Glance

Seaworthiness is more of an abstract concept, as it does not have physical or spatial constraints. It can only be defined as a relative term whose meaning can only be determined upon the service a ship or vessel is due to undertake. Lord Scrutton LJ in A E Reed & Co Ltd v Page, Son & East Ltd [1927] describes seaworthiness in two aspects.

  • First, the vessel must be fit to enter the planned voyage.
  • Second, the ship must be fit to receive the cargo as a carrying container (‘cargo worthiness’)

How Important Is the Concept of Seaworthiness to Sri Lanka?

Since Sri Lanka’s economy greatly depends on exports and the livelihood of its people depends on imports, there is much reliance on the transportation of goods. Due to the strategic location of the country and the naturally formed ports, maritime transport operates as a significant transportation method. According to the Sri Lanka Export Development Board, the Port of Colombo has reported a steady growth of 4.5% in container traffic in the last ten years. Therefore, an effective regulatory mechanism is essential to ensure the growth of the transport of goods by sea in the nation. The primary statutory authority concerning transporting goods by sea in Sri Lanka is the Carriage of Goods by the Sea Act No.21 of 1982. However, the statute does not contain any express provisions concerning the undertaking as to the seaworthiness of a vessel. This is because the obligation to provide a seaworthy vessel is implied in a contract of affreightment in Sri Lanka and internationally. In many charter parties, this implied obligation is further reinforced by express clauses to the same effect.

First Aspect of Seaworthiness: The Vessel Must Be Fit to Enter the Planned Voyage

Lord Scrutton LJ first described seaworthiness to mean that the vessel was fit enough to enter the planned voyage. This obligation encompasses many aspects, including the need for the vessel to be physically fit, the necessity of having a sufficiently skilled crew onboard, and carrying out regular maintenance and safety inspections. It also requires the ship to have sufficient fuel and requires one to ascertain that the ship is appropriately equipped for the storage and transportation of cargo.

What Happens When Cargo is Damaged or Destroyed?

Where the cargo is destroyed or damaged, or the transport is delayed due to any defect in the vessel, this obligation for the vessel to be fit is contested. The shipowner would most likely attempt to displace this obligation by either stating that he does not owe such an obligation or arguing that the damage is not due to the vessel not being seaworthy.

There have been slight traces relating to the obligation of seaworthiness as early as 900 BC in the Rhodian Sea Law, which served as the principal Maritime law in the Mediterranean area. However, it did not expressly provide for the obligation of the shipowner, but merchants were required to make inquiries that the ship was ‘water-tight’. This was merely a moral obligation in the early days, as opposed to being a condition or a warranty, as was reflected in a private charter party dated AD 236 in Papyrus 948 in the British Museum. However, with the expansion of international trade, this moral obligation transformed into a legal obligation. Since the bills of lading and maritime insurance policies failed to particularize such matters accurately, the shippers and ship owners were in a perpetual tug of war.

In order to circumvent such situations, the common law developed certain rules which helped determine the parties’ rights and obligations. According to common law, the obligation to provide a seaworthy vessel lies with the shipowner, and this duty is absolute. This means that the shipowner will be liable in cases of breach, irrespective of where the fault lies. Lord Blackburn precisely articulates in Steel v State Line Steamship Co. that the obligation of a shipowner is ‘not merely that they should do their best to make the ship fit, but that the ship should be really fit.’

When Is This Obligation Not Met?

The courts have determined that the ‘vessel to be fit’ obligation will not be met in the below situations:

Where the Structure of the Ship is Unfit:

Generally, if the ship’s structure is unfit, it will be deemed unseaworthy, as held in The Apostolis. Additionally, a ship unable to cope with the rough seas or the stormy weather it encounters on a voyage will also be considered not seaworthy, as decided in Zuellig (Gold Coin Mills). In such circumstances, the shipowner will be in breach of this implied obligation. If a vessel was fit at the commencement of the voyage but subsequently gets into difficulty, it will not be regarded as a breach of this obligation, as held in the case of Whybrow & Company Pty Ltd v Howard Smith Co Ltd (1913).

Where Ship Equipment Does Not Meet Working Conditions:

Moreover, the shipowner is obliged to ensure that the ship’s equipment is in working condition and is suitable for the voyage to satisfy the requirement of seaworthiness. One of the basic duties is to ensure that the ship’s engines are functional, as stated in The Antigoni [1991]. Furthermore, the shipowner must provide functional cranes for loading and offloading cargo, as held in The Happy Ranger [2006]. The above demonstrates that the duty of the shipowner was one without boundaries. This led to the shipping industry facing an imbalance of rights.

Second Aspect of Seaworthiness: Cargo Worthiness

As previously noted, seaworthiness also comprises cargo worthiness. This was explained in Stanton v Richards (1872), whereby the shipowner has an obligation to supply a ship that is seaworthy in relation to the cargo which he has undertaken to carry. This meant that a vessel could be deemed unseaworthy if there was no system to store and transport the cargo in a manner that would not endanger the ship, the crew, and other cargo.

One important question that is raised in this regard is how far a shipowner can exercise this duty. Will the shipowner have to assume liability even at the expense of the shipper’s negligence? Although an absolute duty arises at common law, there have been some instances where the courts have exempted from this principle. For instance, in the case of The Kapitan Sakharov [2000], where the storage of a certain flammable liquid contravened certain International Codes which rendered the vessel unseaworthy, the court held that the shipowner had exercised due diligence because he could not have detected that cargo even by exercising reasonable skill and care. This is proof that there are instances where the shipowner would not be shackled by the obligation of providing a seaworthy vessel.

Furthermore, this absolute obligation imposed by the common law though being strict does not imply that the ship should be faultless. In President of India v West Coast Steamship Co [1962], it was held that the shipowner must provide a ship that can survive the usual perils of the sea in consideration of the type of water, ship, and time of travel. Express provisions in the contract of affreightment by the shipowner could exclude the absolute obligation laid down by common law. However, the courts will apply a very stringent interpretation to such clauses. This was illustrated in Nelson Line v Nelson (1908), where a clause exempting a shipowner from liability for any damage to goods ‘which is capable of being covered by insurance’ was held not to be effective in excluding liability for damage to cargo resulting from unseaworthiness. The courts held that such clauses must be expressed in clear language to be effective.

The Hague-Visby Rules – A Different Standard

The standard set-in common law is disregarded if a contract of affreightment is governed by the Hague-Visby Rules. In such a situation, the absolute obligation will be replaced by a duty to exercise due diligence to make the ship seaworthy. The Hague-Visby Rules 1924 were formulated to mitigate the strong bargaining powers of sea carriers in sea voyages. These rules were given statutory footing in Sri Lanka through the Carriage of Goods by the Sea Act No. 18 of 1926.

Article III (1) of the Hague-Visby Rules states that the shipowner shall be bound before and at the beginning of the voyage to exercise due diligence. The shipowner would be exonerated from liability in respect of any loss or damages to the cargo due to the vessel’s unseaworthiness. In addition, the shipowner is free from liability for loss or damages to goods arising due to the fault of the master of the ship, the crew in navigation, or the management of the ship.

The key effect of the Hague-Visby Rules is that it seems favorable to shipowners. If, for instance, The Happy Ranger [2006] is decided in the light of the Hague-Visby Rules, it could be argued that offloading cargo could no longer come under the purview of seaworthiness. Additionally, the rules do not require the shipowner to ensure that cranes for offloading cargo are functional, as Article III limits this. In practice, this may not seem simple as in theory. Although there is no absolute duty, the shipowner is still expected to show reasonable care. Further, Article IV (3) provides the shipper with immunity whereby the shipper will not be responsible for any loss or damage sustained by the carrier or the ship arising or resulting from any cause without the act, fault, or neglect of the shipper, his agents, or his servants. The Hague-Visby Rules do not, in fact, completely free the shipowner and, instead, merely loosens the constraint of the common law duty.

What Does All of This Mean?

Ensuring a seaworthy vessel has been provided for the voyage is an indispensable duty to the extremity of dangers it poses to the crew, cargo, the ocean, and the environment. The development of case law suggests a strict, absolute duty on the ship owner to provide a seaworthy vessel. However, some case law suggests that surrounding circumstances, such as the shipper’s negligence or the proper execution of duty by the shipowner, must be considered. It can even be stated that the courts have applied an objective test in some instances, as in the Kapitan Sakharov case.

The Hague-Visby rules, on the contrary, provide a different standard. The extensive duty of the shipowner is replaced with a much lighter burden of exercising due diligence. While this is a more reasonable standard, it can be argued that with the higher burden placed on common law, it is uncertain what should gain precedence. In contrast to the Hague-Visby Rules, common law provides far clearer opportunities for parties to decide who is liable for damages, thereby reducing the need for unnecessary litigation. Nevertheless, the Hague-Visby rules do not entirely dispense the shipowner of any liability once the ship has set sail.

So, is a seaworthy vessel, in fact, a shipowner’s bane? Currently, the common law rules in this regard would be less important as most of the contracts for the carriage of goods by sea are governed by the Hague-Visby Rules. The obligation would now depend on a multitude of factors and surrounding circumstances and could shift on either party to ensure that the interests of all parties are protected.

The views and opinions expressed in articles submitted to the Comparative Advantage Blog are those of the author and do not necessarily reflect the views of The Moot Court Bench



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