Passage plans – fail to prepare, prepare to fail
The CMA CGM Libra  EWCA Civ 293 (Alize 1954 and CMA CGM SA v Allianz Elementar Versicherungs AG and 16 Ors)
The Court of Appeal of England & Wales has recently endorsed the first-instance Admiralty Court decision that a failure to properly prepare a passage plan or to properly mark-up navigational charts to reflect navigational dangers, may amount to a failure to exercise due diligence to make the vessel seaworthy, leading to an actionable fault defence for cargo interests who had refused to contribute to general average.
On 17 May 2011, “CMA CGM LIBRA” departed Xiamen, China bound for Hong Kong. She was carrying over 8,000 TEU of containerised cargo, valued in excess of US$500 million. After dropping off the pilot, the vessel’s master navigated out of the recognised channel marked by lit buoys, with the vessel subsequently grounding at a speed of around 12 knots.
The grounding site was within an area identified as a former mined area. Mariners are warned, by way of notices to mariners, that the former presence of those mines inhibited hydrographic surveying, giving rise to a risk of uncharted shoals (rather than a risk of mines themselves). The case revolved around one specific notice to mariners, NM 6274(P)/10, which was not included in the passage plan nor were “no go” areas marked on the chart to reflect the dangers of shallow water to which mariners were alerted by NM 6274(P)/10, the questions being whether these omissions were causative of the grounding and, if so, whether that omission rendered the vessel unseaworthy.
Approximately 92% of the cargo interests agreed to pay the general average claim. The remaining 8% of the cargo interests chose not to pay, alleging that there was an actionable fault on the part of CMA CGM, which would give them a complete defence to the general average claim pursuant to Rule D in the York-Antwerp Rules.
CMA CGM sought to recover approximately US$ 800,000 from the non-paying cargo interests.
At first instance, the Admiralty Judge found that:-
- the master’s decision to depart from the passage plan was negligent, it was a decision which a prudent mariner would not have taken;
- despite submissions by the cargo interests to the contrary (following Volcafe Ltd v Cia Sud Americana de Vaporesi SA  3 WLR 2087) the burden of proof to show actionable fault remained with the cargo interests;
- prudent passage planning does require dangers outside a charted fairway to be marked on the chart as that would be the primary document which the officer navigating the vessel would refer to when making navigation decisions;
- applying the conventional test of unseaworthiness (as per McFadden v Blue Star Line (1905) 1 KB 697]), it would seem ‘inconceivable that the prudent owner would allow the vessel to depart from Xiamen with a passage plan which was defective in the manner I have found’;
- on the subject of causation, it was more likely than not that the defect in the passage plan was causative of the master’s decision to leave the channel which led to the grounding; and, accordingly
- the cargo interests had proved unseaworthiness and the owners had failed to establish that they had exercised due diligence to make the vessel seaworthy.
Court of Appeal
The two grounds of appeal advanced by the owners for which permission to appeal was granted were:
- That the judge wrongly held that a one-off defective passage plan rendered the vessel unseaworthy for the purposes of Article III rule 1 of the Hague Rules and, in particular, failed properly to distinguish between matters of navigation and aspects of unseaworthiness;
- The judge wrongly held that the actions of the vessel’s master and crew which were carried out qua navigator could be treated as attempted performance by the carrier of its duty qua carrier to exercise due diligence to make the vessel seaworthy under Article III rule 1 of the Hague Rules.
In relation to the first ground of appeal, there were several strands to the owner’s case. First, they relied on the decision in The Hill Harmony, as they did at first instance, arguing that passage planning constituted a navigational decision even though it took place before the vessel had left the berth and that the placing of “no go” areas on the chart could be similarly characterised.
They also argued that seaworthiness was concerned with attributes or intrinsic qualities of the vessel, her crew or equipment. Owners accepted that these attributes went beyond physical attributes, conceding that it would encompass having a proper system on board, but argued that the passage plan and marking of the navigational charts were simply the recording of navigational decisions rather than being attributes of the vessel. There was a fundamental distinction, owners argued, between having everything necessary on board, which was part of the owners’ responsibility to make the vessel seaworthy under Article III rule 1, and the actual navigation by the crew (of which the passage plan formed part) where any failure would be within the exception in Article IV rule 2(a).
In relation to the second ground of appeal, owners argued that the carrier’s obligation to exercise due diligence to make the vessel seaworthy was limited to acts by the master and officers in their capacity “as carriers” and that anything they did in a capacity “as navigators” was “outside the orbit” of the ship owner’s responsibility. The obligation on the owners in the present context was (i) to put on board all materials needed for safe navigation; (ii) to give guidance and instructions and (iii) to ensure that the vessel had a competent crew. Beyond that, a failure by the master and crew to navigate carefully, which was their responsibility, was outside the orbit of responsibility of the owners.
The Court of Appeal dismissed the appeal in emphatic terms.
The Court held that the submission that negligent navigation cannot render the vessel unseaworthy, even if it happens before the commencement of the voyage, is wrong as a matter of principle and on the case law. There is no principled basis, said Justice Flaux, for concluding that a defect caused by navigational error by the Master or crew before or at the commencement of the voyage cannot render the vessel unseaworthy. Likewise, the distinction which owners sought to draw between mechanical acts of the master and crew which might render the vessel unseaworthy and acts of the master and crew which require judgment and seamanship which would not render the vessel unseaworthy was dismissed as a “misconceived distinction”.
Owners’ argument that “one-off” acts of negligence could not render a ship unseaworthy were readily dismissed, the Court of Appeal agreeing with Cargo interests that it is well-established that both one-off instances of negligence and systematic failings can cause unseaworthiness.
The Court of Appeal concluded that both an out of date uncorrected chart and a passage plan and working chart which are defective because they fail to contain the warning in NM 6274(P)/10 are defects which are “attributes” of the vessel and render her unseaworthy. Given that conclusion, they did not need to make a determination of owners’ argument that unseaworthiness required the defect to be an attribute of the vessel but they were certainly leaning in favour of the arguments present by cargo interests.
In passing, it is worth noting (as counsel for cargo did in the Court of Appeal) that in relation to the “attribute” point, owners relied on The Apostolis  2 Lloyds Rep 245 but that case involved a cargo fire which was caused by sparks from welding being done on deck and, importantly, the welding was being done for repairs which were not required to make the ship seaworthy. That is to be contrasted with the act of proper passage planning and the marking of charts, both of which were required for the safe navigation of the vessel.
The second ground of appeal was dismissed as emphatically as the first. Owners relied on the decision in The Kapitan Sakharov to draw a distinction between acts of the master and crew “as carrier” (for which the owners are responsible) and their acts “as navigator” (for which the owners are not responsible). The Court pointed out that in The Kapitan Sakharov it was being argued that the ship owner was liable for the negligence of the shippers in stuffing containers (with dangerous cargo which rendered the vessel unseaworthy) in circumstances where the contract of carriage did not make the owners responsible for that task. That was the context in which it was said that certain acts were “outside the orbit” of the ship owner.
So, the Court of Appeal judges concluded, The Kapitan Sakharov is “simply not authority” for the proposition that a shipowner is relived of its obligations under Article III Rule 1 if the acts of the master and crew are to be categorised as acts of navigation, notwithstanding that those acts are in preparation for the voyage and their negligent performance renders the vessel unseaworthy.
This case, perhaps surprisingly, split opinions when the first instance judgment was handed down. However, in that judgment, the judge (Teare J) summed up saying:
‘The cargo interests have established causative unseaworthiness and the owners have failed to establish the exercise of due diligence to make the vessel seaworthy. That is the consequence of applying to the facts of this case established propositions of law, namely, the traditional test of seaworthiness, the principle that documentation is an aspect of seaworthiness and the non-delegable nature of the duty to exercise due diligence.’ (Emphasis added)
It is difficult to disagree with the above statement and thus one may say that it is no surprise that the Court of Appeal has upheld the decision. The case serves as an important reminder to all sectors of the maritime world in relation not just to the legal principles but to practical steps which ought to be kept in mind.
As this case shows, care is required to make sure that all available information is incorporated into the passage plan and the electronic navigation charts. This case has a perhaps unusual set of facts but it highlights nevertheless the value of internal audits scrutinising passage plans to see that they are being thoroughly checked by the master.
In these days of ever larger ships and more valuable cargoes, one can reasonably expect cargo interests to challenge calls for general average contributions in cases such as this. The evidence usually reveals very quickly whether arguments of the type seen in this case could be run but they might not always be clear cut – there was significant debate about causation during the course of this trial and that may be where the battleground will lie in future cases.