New Judgment: Alize 1954 and another v Allianz Elementar Versicherungs AG and others [2021] UKSC 51

On appeal from [2020] EWCA Civ 293

This appeal concerned the scope of a shipowner’s obligation to exercise due diligence to make a vessel seaworthy, and in particular whether negligent passage planning may render a vessel unseaworthy or whether it is excepted as involving negligent navigation.

The Appellants are the owners of a container ship which grounded on a shoal outside of the buoyed fairway shortly after leaving port. The Admiralty judge found that the vessel’s defective passage plan was causative of the grounding and that this involved a breach of the carrier’s seaworthiness obligation under article III rule 1 of the Hague Rules. The decision was upheld by the Court of Appeal. The Appellants contend that the decisions of the courts below were wrong, that the vessel was not unseaworthy and/or due diligence was exercised, and that any negligence in passage planning was a navigational fault which is exempted under article IV rule 2(a) of the Hague Rules.

HELD – The Supreme Court unanimously dismissed the appeal.

Issue 1: Did the defective passage plan render the vessel unseaworthy for the purposes of article III rule 1 of the Hague Rules?

The Court rejected the Appellants’ argument that there is a category-based distinction within the Hague Rules between the seaworthiness and the navigation or management of the ship. They are not mutually exclusive. If the vessel is unseaworthy then it can make no difference whether negligent navigation or management is the cause of the unseaworthiness or is itself the unseaworthiness. Seaworthiness is not limited to physical defects in the vessel and her equipment; it extends, for example, to documentary matters, to the knowledge and skill of the crew, to the vessel’s systems and sometimes to the vessel’s cargo or trading history.

The Court confirmed that the well–established prudent owner test, namely whether a prudent owner would have required the relevant defect to be made good before sending the vessel to sea had he known of it, is an appropriate test of seaworthiness. It further confirmed that the fact that a defect is remediable may mean that a vessel is not unseaworthy.

The Court held that on the proper interpretation of the Hague Rules, the article IV rule 2 ‘nautical fault’ exception cannot be relied upon in relation to a causative breach of the carrier’s obligation to exercise due diligence to make the vessel seaworthy. The fact that the defective passage plan involves “neglect or default” in “the navigation of the ship” within the article IV rule 2(a) exception is no defence to a claim for loss or damage caused by unseaworthiness.

Issue 2: Did the failure of the Master and second officer to exercise reasonable skill and care when preparing the passage plan constitute want of due diligence on the part of the carrier for the purposes of article III rule 2 of the Hague Rules?

The Appellants’ alternative case was that, so long as the carrier has equipped the vessel with all that was necessary for her to be safely navigated including a competent crew, the crew’s failure to safely navigate the ship is not a lack of due diligence by the carrier. It is outside of the carrier’s orbit of responsibility.

The Court held that the obligation on the carrier to exercise due diligence to make the 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.

The carrier is liable for a failure to exercise due diligence by the master and deck officers of his vessel in the preparation of a passage plan for the vessel’s voyage. The carrier’s seaworthiness obligation in relation to passage planning is not limited to providing a proper system for such planning.

 

Judgment (PDF)

Press summary (HTML version)

Judgment on BAILII (HTML version)

 

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