The UK Supreme Court - The CMA CGM Libra [2021] UKSC 51

This case concerned the scope of a ship owner’s obligation to exercise due diligence to make a vessel seaworthy. This concept features significantly in Article III and Article IV of the Hague-Visby Rules, which were incorporated into the bills of lading issued by the carrier. That seaworthiness obligation is fundamental to all contracts of carriage by goods by sea. It is, therefore, a very important factor in many cargo claims brought against vessels. In this case, the ship owners were seeking a contribution to the general average, but some of the cargo interests refused to pay on the basis that the vessel was not seaworthy. The Courts below found in favour of cargo interests, so the Supreme Court was asked by owners to re-consider this significant issue of seaworthiness.

The vessel grounded while leaving the port of Xiamen, China. The reason for the grounding was that the master had gone outside the main channel into shallow water. Official warnings had been provided that the waters outside the fairway were unreliable and shallower than recorded on the charts. These warnings should have been included on the chart and in the vessel’s passage plan. The Courts below found that these failures were causative because, if the warnings had been on the chart and in the passage plan, the master would not have left the fairway.

The Courts below agreed that the fact the charts had not been updated, and therefore there was a defective passage plan, meant that the vessel was unseaworthy when it left the port. The legal test applied was whether a prudent owner would have sent the ship to sea with the relevant defect without requiring it to be remedied, had they known of it. Perhaps unsurprisingly, therefore, it was going to be difficult for the owners to succeed in getting over that test, given that there was a finding that it was in fact this failure in the passage planning and the charts that was the reason for the vessel grounding.

The owners sought to draw a distinction between them having properly equipped the vessel and put everything onboard, and provided all the information to the master prior to the commencement of the voyage contrasted with what they claimed was simply an error in the “navigation” of the master once the vessel had left. Their argument was that passage planning could not render a vessel unseaworthy because it involved no more than the recording of a navigational decision. The owners argued that a ship could only be unseaworthy if there was a defect affecting an “attribute” of a ship. The Court concluded that given the essential importance of passage planning for safe navigation, a vessel is likely to be unseaworthy if it begins the voyage without a passage plan, or if it does so with a defective passage plan which endangers the safety of the vessel. A prudent owner would have required a proper passage plan before the ship was put to sea.

The owners also submitted they had exercised “due diligence” and could rely on Article IV(1) of the Rules. The Supreme Court confirmed that the obligation of the carrier to exercise due diligence to make a vessel seaworthy requires that due diligence be exercised in the work of making the vessel seaworthy regardless of who is engaged to carry out that task, i.e. it was non-delegable.

The Supreme Court found, therefore, that the carrier was liable for a failure to exercise due diligence by the master and the deck officers of their vessel in the preparation of a passage plan for the vessel’s voyage. That the navigation is the responsibility of the master, and that they used their specialist skill makes no difference. The judgment clarifies the usefulness of a prudent owner test in relation to the condition in which any vessel must be when it leaves the port, i.e. it must be in a seaworthy condition and have no defects which an owner would have required to be remedied before they left.

This case is, therefore, helpful for cargo interests and their insurers in that it emphasises the non-delegable duty of owners to have their ship seaworthy prior to the commencement of the vessel, including having a proper passage plan. This issue is interesting in many cases where there are errors made subsequently in the navigation of the vessel which causes loss to cargo. As usual, it will be necessary for a detailed investigation as to the cause of the loss, and it could sometimes be the case that those potential defects, i.e. a defective passage plan, were not in fact causative cause of the loss. To that extent, the case does not affect the existing law which requires there to be a causative link between the unseaworthiness and the loss of cargo. A critical issue here is that the missing warning on the chart was fundamental to the safety of the vessel.

This case is also helpful in emphasising the important relationship between Article III(1) of the Hague-Visby Rules (the requirement that the vessel be seaworthy), and the exceptions often relied on by carriers in Article IV(2)(a). The case contains a detailed and wide ranging review of the relationship between Article III and Article IV concerning seaworthiness, and is an important authority on these issues which we frequently encounter in dealing with cargo claims.

If you would like to know more about the issues arising in this judgment, please contact Andrew Colgan or Matthew Flynn.

This publication is intended as a general overview and discussion of the content dealt with. It should not be used in any specific situation, in which case you should seek specific legal advice.