Tuesday, December 7, 2021

Ten Years On the Case of a Multi-Million Dollar Container Ship Grounding is finally Settled

New Video Available from Insurers to Help Avoid Future Passage Plan Mistakes
Shipping News Feature

UK – WORLDWIDE – With merchant vessels having traded for millennia, and in that time seen shipwrecks, accidents, piracy and all the multiple factors that can lead to injury, loss or otherwise, one might think that there would be no more corners of the law to be explored, every situation already having seen precedents and the ensuing rulings.

Not so of course. No matter how many years pass there are always new factors and situations that lead insurers, shipping companies and cargo owners to the Courts to argue their respective cases, and in the past few days we have witnessed the conclusion of a case which has been before not only the High Court and Court of Appeal, but finally decided by the Supreme Court itself.

The case centres on the fate of the CMA CGM Libra which grounded on 18 May 2011 on a known shoal after deviating from her intended course and straying outside the buoyed shipping fairway after departing Xiamen, China. She was refloated at a cost to the ship owners of $13 million prompting them to declare General Average.

This declaration resulted in around $8 million being paid out by insurers after the bulk of cargo interests agreed to pay either 98.5% or 100% of their proportion of General Average. However the 8% or so which refused to pay up stated the belief that the accident arose due to a defective passage plan.

A passage plan is devised and used by a ship's bridge team to find the safest, and the most favourable and economical route for the entire voyage i.e. from berth to berth. Such a plan must be detailed and plain to understand. The controversy arose as the ship owners pointed out that, although the position and 1.2 metre depth of the shoal concerned had been the subject of a Notice to Mariners issued by Hydrographic Office (UKHO) several weeks before the incident this had not been acted on.

Apparently the paper chart carried on the vessel had not been updated and the ship’s electronic chart also had no record of it. The UKHO however also issued a further Notice to Mariners five months prior to the incident warning that depths declared beyond the buoyed channel were not to be relied on.

When the vessel owners claimed the charts she carried were up to date on commencement of the voyage the High Court disagreed. The owners appealed once more on the grounds on two questions of law i.e. Does a defective passage plan render a ship unseaworthy for the purposes of Article III Rule 1 of the Hague Rules? And, can the actions of a ship’s master or crew which are carried out in their capacity as navigators be treated as (attempted) performance by the ship owner of its duty as carrier to exercise due diligence to make the ship seaworthy under that same Article?

Both grounds of appeal failed stating any failure by the master and crew in preparing an adequate passage plan amounted to unseaworthiness provided that the failure arose before the voyage commenced. At the Appeal hearing Lord Justice Males concluded:

”A properly prepared passage plan is an essential document which the vessel must carry at the beginning of any voyage. There is no reason why the absence of such a document should not render a vessel unseaworthy, just as in the case of any other essential document.”

The Supreme Court has now found similarly saying the passage plan was defective was not an error in navigation and no defence as a response to a claim for loss or damage caused by unseaworthiness.

Put simply the failure of those on board to adequately prepare for the voyage by ensuring charts were updated etc. was not an error of navigation and the responsibilities of the carrier for all its obligations under Article lll Rule 1 remain in place when any failure by the crew to exercise due diligence occurs, including navigational matters. The Full Supreme Court judgement can be seen HERE.

In a direct response to the case the UK P&I Club has released the latest video in its online ‘Ask an Expert’ series which aims give the audience a broad understanding of an issue in around half an hour. The film, viewable HERE, feature Captain Vincent Fernandes, author of ‘ECIDS Blues’, in a discussion on passage planning on Electronic Chart Display and Information System (ECDIS).

In the video, Anuj Velankar, Regional Director Loss Prevention at the UK P&I Club, talks to Vincent Fernandes about the ECDIS perspective on the grounding and the various aspects of passage planning to see if the same issues that led to the grounding on paper charts could happen today on ECDIS. There is further discussion on steps that the bridge team could take to avoid making these errors and highlights best practice in relation to making and monitoring passage plans on ECDIS. Stuart Edmonston, Loss Prevention Director at UK P&I Club commented:

“By analysing the ruling on CMA CGM Libra, we can understand how ECDIS improves navigational efficiency and makes bridge watch-keeping safer to that of paper charts of years past. ECDIS is here to stay and it is important to understand the interaction of the crew and equipment to avoid the same mistakes.

“This video resource gives valuable guidance and helps ship owners and crew to get to grips with the importance of understanding how seafloor coverage, depth notification, Catazoc and T&P corrections are all factors to ensuring safe passage planning of ships.”