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Role of Seaworthiness in the Maritime Contract

Info: 3649 words (15 pages) Law Essay
Published: 4th Nov 2020

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  1. The vessel must be in such a state at the start of the voyage that it can perform the contract voyage in safety,both as regards the vessel itself and the particular cargo to be carried on the voyage.

With reference to relevant case law, critically analyse the role of seaworthiness in the maritime contract.

 Seaworthiness, in the broadest sense, means a vessel must be fit to go on a voyage and encounter the ordinary harm expected for any given voyage. Most commonly, the term used in the legal context, which is found in contracts entered into by companies, for example charter parties and bills of lading. It also governs the relations and risks between the two main contracted parties; those being the carriers of the goods (those who are in charge of the transportation of goods) and the shippers who pay the carriers to transport their goods. Chuah states that a carrier is under absolute obligation to make sure the ship is in seaworthy condition. The duty arises up until the ship leaves to set sail but ends at the end of the sailing, thus meaning any damage after the vessel sets sail is not liable or connected to the carrier.

Seaworthiness is explained by judges and critics as it does not just mean that the carrier has to make sure the vessel is safe/’seaworthy’ to make the journey. One explanation is found in Elder Dempster and Co v Paterson Zochonic and Co. Ltd[1] ‘the ship-owner who agrees to transport goods by sea thus warrants that the ship will not only be seaworthy in the ordinary sense i.e. it will be tight stanch and tough and practically is fit to face any threats expected during the voyage but also the ship and furniture and all the machinery will be fit to agreed cargo.’  Also in AEReed and Co Ltd v Page, Son and East[2], Lord Scrutton LJ claimed seaworthiness can be applied in two different ways. Firstly the role is the fitness of the ship to enter on the planned voyage and then secondly, the fitness of the ship to receive the agreed cargo as a carrying container. Therefore there are two tests to provide that the ship is seaworthy, one a good built ship which can fight the common threats of the sea and the other is cargoworthiness. These help make sure the ship is up to its role of seaworthiness and keeps it within the guidelines.

Furthermore, the ship-owner is under obligation to make sure the ship is equipped for whichever cargo it is carrying.  An example of this scenario is if the contract is for carrying frozen meats then the ship-owner must provide a refrigeration system. There is an ‘implied warranty’ that the ship and refrigeration system is fit for the journey.[3] Additionally, the ship-owner has an obligation to make sure the crews capable and able to control the ship in a competent manner. More so, that they need valid certifications to prove the seaworthiness and perfect physical condition is a must for certified seaworthiness. Therefore this shows that seaworthiness is not just about the physical condition of the ship, even though that is an aspect, yet it ranges further than that. 

A problematic consideration can arise with specific circumstances, such as, “when is the carrier obligated to provide a seaworthy carriage”? In this instance, it is stated that at the commencement of voyage or each voyage, if the vessel will take one or more than doctrine of stages[4]  the vessel must be considered seaworthy. As well, if the carrier is only obligated to check the seaworthiness at the beginning of the voyage then he would not be responsible for anything after it is verified.  In Hague-Visby Rules[5] it imposes and holds the carrier accountable before the voyage and at the beginning, to care for the ship and also make it seaworthy. This is also similar to the Common Law, where the carrier’s obligation begins when the voyage starts however it is hard to prove the ship was unseaworthy and unreasonable to hold the carrier responsible once the ship has been on the journey for a long period for time or it has reached its destination. So this is where the role of seaworthiness becomes complicated, trying to pin point who is responsible at each given time. The only difference between Common law and Hague-Visby rules is that Common Law is absolute where as Hague-Visby rules a duty to apply where due diligence is bestowed. If it does not apply, then the carrier does remain under the absolute duty.

Common Law imposes absolute duty on the carrier to provide a seaworthy ship and is strict however does not interpret that the carrier has to provide a faultless ship. As in the carrier could just show proof that they tried to make it a seaworthy ship, where as the ship isn’t seaworthy. This is shown in President of India v West Coast Steamship Co[6], it was held that ‘the carrier should supply a ship that can survive the usual threats of the sea, bearing in mind the type of water, ship and time of travel etc.  The ship should be fit for the purpose of sailing, only proving that efforts were made to make it seaworthy is not sufficient.’ Furthermore that Lord Blackburn stated in Steel et Al v The State Line Steamship Company[7] that the absolute duty means “that where there is a contract to carry goods in a ship, whether the contract is in the shape of a bill of lading...there is a duty on the part of the person who furnishes or supplies that ship...Unless something be stipulated which should prevent it, that the ship shall be fit for its purpose. That is generally expressed by saying that it shall be seaworthy.”  Therefore, if the carrier has furnished the vessel but is being accused of violating his duty then the carrier will be free from the accusation if following the judgement in the above case law.[8] On the other hand in Kapitan Sakharov[9] the carrier was liable for an unseaworthy vessel, which was because of bad storage. Furthermore for the protection of the ship, goods and employees the duty will guarantee that there is no dangerous cargo onboard which also will ensure that ‘bad storage’ will not make the ship unseaworthy. However the carrier can protect themselves by inserting an exclusion clause within the contract to try to eliminate any liability if the ship is deemed unseaworthy, but the duty is still an absolute one. 

The US Harter Act 1893 exercises the duty to maintain the interest between the carriers and cargo owners. If the cargo owner has suffered losses or damage then the Act could be used to defend them if the duty was not protecting their rights.  HRV[10] implemented the positive obligation to exercise due diligence, meaning the party trying actively to avoid committing a tort or offence. In Muncaster Castle[11] the duty to exercise due diligence exceeded the absolute duty to have a seaworthy vessel. In cases where rules do not apply, then absolute obligation still applies. Such as that found in Common law; this still applies to cases of Charterparties. Moreover, in the Carriage of Goods by Sea Act 1971, ‘there shall not be implied in any contract for the carriage of goods by sea to which the Rules apply by virtue of this Act any absolute undertaking by the carrier of goods to provide a seaworthy ship.’

Lord Keith of Avonholm explained that ‘the carrier will have some relief which weight in the scales is not inconsiderable when contrasted with his previous common law position. He will be protected against latent defects, in the strict sense, in work done on his ship, that is to say, defects not due to any negligent workmanship of repairers or others employed by the repairers and, against defects making for Unseaworthiness in the ship, however caused before it became his ship, if this could not be discovered by him, or competent experts employed by him, by the exercise of due diligence.

To find out if the carrier, servants or agents acted in due diligence to make sure the vessel was seaworthy Lord Justice Auld made an objective test in Kapitan Sakharov.[12] Due diligence is different depending on the facts, information that was present when performing the duty and conditions. It could be defined as the efforts of the prudent carrier to take all reasonable measure that can possibly be taken, to be able to fulfil their obligation to provide a seaworthy ship.  Due diligence is important when the ship-owner tries to use Article IV r2 of the HRV[13] or if they are trying to prove their innocence or the exception clauses of the contract. If the vessel is found to be unseaworthy then the only way the party can prove their innocence is to show they took reasonable steps to prevent any offences (due diligence.) Consequently the party cannot be responsible if it is proven that they did the reasonable step to try and stop the ship from being unseaworthy.

Nonetheless, if the ship is deemed seaworthy and then the cargo is loaded, the carrier will still be liable if the ship later becomes unseaworthy before sailing and after the cargo is loaded.  Chuah[14] states that the duty takes affect once the cargo is loading, thus it can be assumed that the ship is fit to leave for the journey once it is fully loaded.  In McFadden v Blue Star Line[15], it is alleged that it is a breach of warranty of cargo-worthiness, if the fault was there before the cargo was loaded. When the goods are loaded, it confirms the warranty that that ship is seaworthy to accept such goods. This action shows the stages of voyage and splits them apart. So seaworthiness is just not the one stage it has different elements to fulfilling the duty.

It is noteworthy, that if the duty does not extend to the ship having to be seaworthy the whole journey, if while sailing the ship was initially seaworthy but further along the journey becomes unseaworthy, it should not be a breach of duty from the carrier’s party.[16] However the carrier could be liable if the ship was originally unseaworthy and had to be repaired to become seaworthy before setting sail, and then turns unfit again after it has started the journey.

It is hard to maintain seaworthiness of the ship if the route navigated is through different types of geographical places and stages. For example, the ship could go through a river, calm sea or a rough sea, these can all change the condition. This factor means there should be a clear understanding of the general rule, because different elements of the journey will make it difficult for the carrier to ensure the ship is seaworthy. So there is the question, is the role of seaworthiness the carrier’s job to make sure it is fit at the beginning or throughout the journey.

In cases like The Vortigern[17], the ship was found unseaworthy as it had not been filled up with enough fuel to last the whole journey. It is noted by the court that it is feasible to split the journey up into parts so that they can refill the ship with fuel, nevertheless this is something which should be decided at the beginning of the journey. This is another factor to warrant the ship of seaworthiness. On the other hand, the warranty of seaworthiness is superseded if the doctrine of stages is oppressed.  The court addresses this problem by ‘ordering the owners to decide acceptable stages,’[18] in Northumbrian Shipping Co v Timm[19]. This means that in order for the carrier or his agent to not be liable of the losses and to be able to defend them, they should plan bunkering stages, and if failing to do so then they lose their defence of doctrine stages. Furthermore if the ship is hired under time charter, then the doctrine of stages doesn’t apply to all the separate voyages. It starts at the beginning of the journey and throughout the hired period, the role of seaworthiness does not apply to the start of each voyage stage.[20] 

On the other hand, the case AE Reed & Co Ltd v Page, Son & East Ltd[21] shows there is one imperfection in the doctrine of stages, this is the pre-sailing operations. The defendants pleaded that the mishap was not down to ‘insufficient equipment’ and the ship was not seaworthy when it started its voyage. The defendant claimed the mishap was because the ship was overloaded. The court ruled that such factors like accidents during shipment and starting the voyage with damage that was unrepaired at the beginning, compromises the role of unseaworthiness.

 As a result of looking at the cases mentioned the role of seaworthiness and the duty to furnish a seaworthy ship. A pivotal change to the role of seaworthiness is the stages of bunkering and loading. The carrier has to make sure the ship is provided with enough resources for the ship to makes its whole journey. In addition, the warranty is extended to include any action that happens after the journey has begun. The role of seaworthiness isn’t limited to the start of the journey with this expansion, and the carrier or agent has to fulfil their hired contract, through the stages. 

 Maxine Footwear Co Ltd v Canadian Government Merchant Marine[22] explains ‘time scope’ of the obligation in Hague-Visby Rule. It was ruled that the duty is continuous which meant the carrierhas to make the ship seaworthy during the whole period, from the loading through to the start of the journey. The court described the term ‘before and at the beginning of the voyage’ as the period from the beginning to the ship sailing. However the phrase ‘before the voyage’ should not be misinterpreted as the beginning of the ship being loaded, as it compromises the whole stage before the ship sails.

Additionally, the rules of shipping put the carriers under several duties to the shipper.  First duty is booking a space for the transportation of items with a certain vessel. If this said space is reused, then the shipper can claim damages as it is a breach of contract by the carrier, if their items are refused.[23]

However the commonly suggested approach of the duty has to provide a seaworthy ship is not able to be applied once the ship has set sail is seen as not completely accurate. In Common Law of bailment it requires that when goods are delivered, they have to be in the same condition, which is both quality and quantity, as when loaded. If not the carrier would be the first party looked at for the liability, and the carrier cannot say they were under no duty to provide seaworthy ship as it had already set sail. This shows the carrier continues to be under duty for the condition of the ship even after it sets sail. The duty isn’t an absolute one though it has to be seen as a ‘reasonableness’ duty once the ship has set sail. This means it takes into account the degree of knowledge the carrier possesses or is considered reasonable to possess given all the circumstances.

What's more, it has to be noted that the carrier also is liable to any damage caused to goods under contractual principles and laws of bailment, but also under the laws of negligence (or tort.) The law of negligence states that the carrier is under the duty of care to shippers and has to transport the goods sufficiently. As stated by Chuah, it may be true that the carrier is not required to ensure the state of the ship after it has set sail to an absolute extent, which is required to do so before it sails. On the other hand, in law of negligence it provides that a ‘relative’ duty continues. It is seen to apply to anyone who has proprietary interest in the goods they are carrying. This therefore means that under negligence, a carrier is liable to both the damage caused to the good to the shipper and the person who purchased the goods. This can be considered as another instance where the provisions in Common Law improve on the protections which are provided in the Hague-Visby rules and the liabilities they can impose on carriers. Through the case law it is clear that the burden is great on the ship owner to make sure the ship is seaworthy.

In conclusion, the role of seaworthiness is greatly put upon the ship owner, it is the question of what duty does the ship owner have throughout all the stages. What are the duties the carrier is under and what risks and liabilities of damage they can be held accountable for?  The Common Law rule and the Hague-Visby rules provide different standards of duty from the carrier. Common Law rules provide that there is an absolute duty on the carrier, to make sure the ship is seaworthy before it sails, but this absolute duty ends once the ship has set sail. This is quite a heavy duty on the carrier, but can be contrasted with the duty set in Hague-Visby rules.  It is only required to be a due diligence standard of a carrier with regards to ensuring the seaworthiness. This is a more reasonable standard, but the Common Law Rules do have the advantage of ensuring there is a legal certainty, as it is clear who will be liable for certain damage done no matter what event occurs, which therefore means there will be less litigation and less costs.  On the other hand though it has to be noted that it is not that straightforward, as the carrier is no longer under an absolute duty once the ship has set sail, there is a duty of reasonableness.  The carrier is under a duty to ensure that damage is not caused to goods by the risks posed by other goods under the laws of contract. The carrier is also liable for any goods that arrive at the destination in any different condition from which they started the journey in. Unless it can be proven that the damage caused to the goods was out of the carriers control under the laws of bailment. Additionally, the laws of negligence, the carrier can be liable to the shipper of the goods and the purchaser of these goods. The negligence laws go wider than this and also provide that there is a duty of care to anyone who has any proprietary interest in the goods. Chuah’s statement can be seen as valid but must not be misinterpretated as implying the carrier’s duties end towards the shipper once the ship has set sail. The role of seaworthiness is to ensure the safety of the ship and cargo onboard. Its role spreads much further than the ship alone, even taking into account the seamen. The law and case law shows that there are many interpretations of the role of seaworthiness but all of them ultimately of for the safety of the ship and the cargo on board.

Bibliography

  • Carriage of Goods by Sea Act (UK) 1924
  • Jason.C.T. Chuah, (2001) Law of International Trade, 2nd Edition, Sweet & Maxwell
  • Jason Chuah (2009) Law of international trade: cross-border commercial transactions, Edition 4, Sweet & Maxwell/Thomson Reuters.
  • John F. Wilson, (2004) Carriage of goods by Sea, 5th Edition, Longman.
  • Jus.uio.no. (2020). The Hague-Visby Rules - The Hague Rules as Amended by the Brussels Protocol 1968. [Online] Available at: https://www.jus.uio.no/lm/sea.carriage.hague.visby.rules.1968/doc.html [Accessed 22 Jan. 2020].
  • Simon Baughen, (2004) Shipping Law, 3rd Edition., London
  • Simon Baughen, (2012) Shipping Law, 5th Edition., London.
  • Stephen Girvin, (2007)Carriage of good by Sea, , Oxford

[1] Elder Dempster and Co v Paterson Zochonic and Co Ltd [1924] 522 AC (HL)

[2] AEReed and Co Ltd v Page, Son and East [1927] 1 KB 783 (CA) (Lord Scrutton LJ)

[3] John F. Wilson, (2004) Carriage of goods by Sea, 5th Edition, Longman. P.12

[4] Carriage of Goods by Sea Act (UK) 1924

[5] Jus.uio.no. (2020). The Hague-Visby Rules - The Hague Rules as Amended by the Brussels Protocol 1968. [online] Available at: https://www.jus.uio.no/lm/sea.carriage.hague.visby.rules.1968/doc.html [Accessed 22 Jan. 2020].

[6] President of India v West Coast Steamship Co [1963] 2 Lloyd's Rep 278 (HL)

[7] Steel et Al v The State Line Steamship Company [1877] 3 AC 72 (P.C) (Lord Blackburn)

[8] N(5)

[9] Kapitan Sakharov [2000] 2 Lloyd's Rep 255 (CA)

[10] N(5)

[11] Muncaster Castle [1961] 1 Lloyd's Rep 57

[12] N(9)

[13] N(5)

[14] Jason.C.T. Chuah, (2001) Law of International Trade, 2nd Edition, Sweet & Maxwell

[15] McFadden v Blue Star Line [1905] 1 KB 697 

[16]  Stephen Girvin, (2007)Carriage of good by Sea, , Oxford,

[17] [1899] P 140

[18] Simon Baughen, (2012) Shipping Law, 5th Edition., London. P.109

[19] Northhumbrian Shipping Co v Timm [1937] 54 Lloyd's Rep 64 (HOL)

[20] N(16)

[21] N((2)

[22] Maxine Footwear Co Ltd v Canadian Government Merchant Marine Ltd [1959] 2 Lloyd's Rep 58

[23] N(14)

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