Jurisdiction and Applicable Law Essay

Pages: 12 (3519 words)  ·  Bibliography Sources: 10  ·  File: .docx  ·  Level: Master's  ·  Topic: Business - Law

The court pointed out that "[t]he result would have been different if the call at Hull had caused any appreciable harm to the cargo."

Here, we lack information about the nature and extent of the stay in Baltimore and how it contributed to the week-long delay in reaching Cadiz. It is hard to imagine how discharging a stowaway takes a week. Given the proximity of Baltimore to the direct route from Liverpool to Cadiz, and given the simplicity of placing a stowaway in the custody of authorities, it seems likely that the stop in Baltimore caused a delay of no more than a day. There could be other factors contributing to the delay in reaching Cadiz, but we would need more information about them. Of course, in the event that the La Tremontaine really did spend a week in Baltimore, Barcelo would have a strong argument that the trip to discharge the stowaway was the cause of his losses and that the captain of the La Tremontaine was negligent in exercising his discretion to make stops necessary to preserve the integrity and safety of the voyage.

Duties Regarding Conditions of Cargo

There are also issues regarding the conditions under which the party poppers were kept. Apparently, storage conditions on the ship were too dry, causing chemical changes in the small explosive charges, which prevented the party poppers from working. Thus, the question arises whether the owner of the La Tremontaine can be liable for the damages to the party poppers because he should have assured better storage conditions on board.

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In general, stowage is not negligent when it is undertaken in conformity with a sound system and when it is properly executed. Soundness is evaluated in terms of the owner's knowledge of the idiosyncrasies of the cargo as well as knowledge of qualities required for the sound storage of cargo generally. (Cooke, 11.11, pp. 196-197).

Essay on Jurisdiction and Applicable Law the Assignment

Holds must be properly cleaned of rust, residues of previous cargoes, insects and the like, which might contaminate cargo. The owners also have the obligation to cure any other condition on the ship that might render the stowage dangerous. In Mediterranean Freight Servs. v. B.P. Oil Internat'l (The Fiona), [1994] 2 Lloyd's Rep. 506, affirming [1993] 1 Lloyd's Rep. 257. The owners failed to remove condensate from the ship's lines, which led to an explosion during the shipment of a cargo of fuel oil. The owners were liable, even though the fuel oil contained an unusual amount of explosive gas, a fact of which the owners were not aware. (Cooke, 11.31, p. 202).

Because the party poppers were explosives, albeit very small ones, it may be that the principles governing the storage of dangerous items applies to determine the owner's duties. It is well-established that, where the cargo may be dangerous, the charterer has the duty to notify the owner of the nature of the cargo so that he can take suitable precautions. (Cooke, 6.49, p. 149). Courts have determined that this is an absolute duty -- that is, the shipper has the duty to notify the owner of all of the dangerous characteristics, not just the dangerous characteristics of which the shipper is actually aware. (Cooke, 6.49, p. 149; see also Effort Shipping v Linden Mg't (The Giannis, NK), [1998] 1 Lloyd's Rep. 337)

Goods are considered dangerous when they have inflammable, explosive, corrosive, noxious or other properties such that they are likely to cause personal injury or physical damage to the ship. Dangerous goods can also include those that may subject the ship to legal or political risks, such as the ship being seized. (Cooke, 6.52, p. 150 (citing Art. IV (6) of the Hague Rules)).

When the carrier is given some information about the nature of the goods to be shipped, there can be a question whether that information was sufficient to permit the carrier to make adequate provisions for its safe storage. In this situation, the carrier has a duty to conduct an investigation consistent with the "usual course of commercial business," but he does not have a duty to develop any special expertise about the cargo. (Cooke, 6.53, p. 151).

In The Athanasia Comninos [1990] 1 Lloyd's Rep. 277, there was a contract for the carriage of "coal." The particular coal in this case was unusually hazardous because it emitted large quantities of methane gas. The charterer argued that the carrier had consented to the risk associated with carrying this form of coal because the propensity of coal to emit methane gas is a well-know risk in the trade. The court pointed out that the risks associated with this kind of coal were different in kind from the risks associated with ordinary coal and, therefore, that the owner was not sufficiently apprised of the risk when he was simply informed that he would be carrying coal. Nevertheless, the charterer was not liable for the damages resulting from an explosion because the owner did not undertake the kinds of precautions that would be necessary even for a load of ordinary coal.

A charterer was found liable for damages because it did not adequately inform the owner of the dangerous properties of the cargo in The Fiona. There, the cargo was accurately described as "fuel oil," but, at that time, carriers did not generally know the dangerous properties of certain kinds of fuel oil, and the charterer's duty to give notice to the carrier was defined in terms of the then existing general knowledge of carriers about that particular kind of cargo.

The condition of cargo can change during a voyage so that otherwise safe cargo becomes dangerous or so that cargo that is ordinarily dangerous to some degree loses its dangerous (and possibly valuable) qualities. In these situations, a court will consider the condition of the goods at the time of shipping, as well as whether the carrier took adequate precautions to assure that the goods' inherent qualities did not change during shipping. (Cooke, 6.57, p. 153). In Acatos v. Burns, [1878] 3 Ex. D. 282, the charterer contracted with the owner to ship a load of maize. The maize sprouted during the voyage and, as a result, endangered the other cargo. The ship was detained by authorities because of this danger. The carrier claimed damages for the costs associated with the detention, asserting that the maize was not in a fit condition for shipping when it was brought onboard. In essence, the carrier claimed that the shipper provided an implied warranty about the condition of the cargo at the time of shipping. The Court of Appeal denied that claim, rejecting the argument that such a warranty should be implied. The rationale for this decision seems to be that the owner should know that maize has a propensity to sprout during shipping and that both the charterer and the owner were equally well positioned to know about the risk associated with shipping maize. Thus, there should be no implied warranty.

This approach has been criticized, however. In a situation like the one in Acatos, the charterer is in a better position to know how the maize was previously stored and whether the conditions of such storage would have made it more likely that the maize would sprout during the voyage. (Cooke, 6.57, p. 153).

Given these legal principles, the question here is whether the owner and captain of the La Tremontaine had sufficient information about the nature of the party poppers and the proper conditions for their storage. To determine whether the owner breached a duty in stowing the party poppers, it must be determined whether it is general knowledge in the shipping trade about the proper conditions for storing party poppers. Similarly, it must be determined whether Barcelo should have reasonably expected dry storage conditions on the ship. If so, the he may have had a duty to inform the owner of the La Tremontaine about the need for less dry storage conditions. Here again, the extent of Barcelo's rights against the owner depend upon factual information not currently available.

Remedies and Limits on Liability

One of Barcelo's other problems is that maritime law generally imposes fairly strict limits on a carrier's liability to the charterer. If he is to recover the full value of his shipment, he must find a way to avoid these limits on liability. Fortunately, for Barcelo, there is one promising way to avoid those limitations on the owner's liability.

Under the long-standing Hague-Visby Rules, owners aren't liable for any losses resulting from damage to the goods or from delay in delivery unless that damages are caused by negligent or improper stowage which was performed by the owners, as opposed to the charterers or shippers. The Hague Rules also provide that owners are not liable for damages or delay caused by unseaworthiness that is attributable to the crew. In addition, the rules provide that "Damage caused by contact with or leakage,… [END OF PREVIEW] . . . READ MORE

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