COURT OF APPEAL, Singapore

Wee Chong Jin CJ, T Kulasekaram J, FA Chua J

23 July 1981

KEYWORDS

Bill of Lading – Cargo Claim – Damage due to Negligence of Carrier – Defence in s. 4(2)(a) of the US Carriage of Goods Act 1936 (identical to Art. IV(2)(a) of the Hague and Hague Visby Rules) – Scope of ‘act, or neglect or default in the management of the ship’ in the section – management of ship’s empty cargo carrying facilities as opposed to managing cargo.

FACTS AND DECISION

A cargo of kraft paper was carried from Buenos Aires (in Argentina) to Singapore under a bill of lading subject to US Carriage of Goods by Sea Act 1936, which has largely adopted the Hague Rules (although US is not a signatory to the Hague or Hague-Visby Rules). The cargo was damaged by water. The facts leading up to the damage were as follows. The paper was stowed in a hold at the stern (rear side of the ship). Below the hold, there were two deep tanks with a manhole access from the main deck. The purpose of the tanks was twofold. One, to carry cargo of vegetable oil (or dry cargo) and another to store fuel oil (for ship’s propulsion). At the time of the incident, both tanks were originally empty having discharged the last cargo of vegetable oil. The crew went into the tanks to clean them. The master ordered filling the tanks with about 350 tons of water, which will be done with one hour of pump operating. The total capacity of the two tanks were 780 tons. The engineer turned the pump on at 6 pm and was supposed to turn it off at 7.00 pm. He forgot to turn it off until 8.30 pm, with the result the pump filled up the tanks to the full capacity and further exceeded the capacity. The water entered the main deck and the cargo hold where the paper was stored, since manholes were left open at that time to facilitate inspection of the water levels. Thus the paper was damaged.

The consignee (indorsee of the bill) sued the carrier. The carrier claimed that the damage was caused by an ‘act, or neglect or default in the management of the ship’, so that liability for that would be excluded by s. 4(2)(a) of the Act. The said section is identical to Art. IV(2)(a) of the Hague and Hague-Visby Rules. The Court agreed with this contention and held that the carrier was not liable, because the negligence was not with regard to any particular cargo but was about the management of the ship.

OBSERVATION

Notably, in this case, although the holds had dual purpose – carriage of cargo and storing of fuel oil for the ship – at the time of the negligent act or omission, it was not carrying any cargo and the actions performed were concerned with management of the ship or ship’s cargo carrying facilitates but not any cargo itself. The reason for performing the work in relation to the cargo carrying facilities might have been to prepare the ship to carry next cargo, but that did not affect the ability of the carrier to rely on the exception and the decision.

Overview by ARUN KASI