Infested cargo was dangerous to other ships

LAW REPORT 6 February 1996

Effort Shipping Co Ltd v Linden Management SA and another; Court of Appeal (Lord Justice Hirst, Lord Justice Morritt and Lord Justice Ward); 30 January 1996

A cargo of processed nuts infested at shipment with a tropical beetle of voracious appetite was, in terms of article IV, rule 6 of the Hague Rules, "dangerous" to other feedstuff cargoes in the same vessel so as to make the shipper liable to the carrier for damages arising out of the need to destroy the infested cargo and fumigate the ship.

The Court of Appeal dismissed an appeal by the second defendant shipper, Sonacos, against the decision of Mr Justice Longmore ([1994] 2 Lloyd's Rep 171) that it was liable to the plaintiff shipowner, Effort Shipping Co Ltd, for damages of $477,848.38 plus interest.

Edmond Broadbent (Richards Butler) for the shipper; Alistair Schaff (Bentleys Stokes & Lowless) for the plaintiff.

Lord Justice Hirst said the action arose out of the shipment of a cargo of ground-nut extraction meal pellets by the shipper at Dakar in Senegal, for carriage to Rio Haina in the Dominican Republic, in one hold of the plaintiff's vessel Giannis NK. The bill of lading incorporated the Hague Rules. The ship was carrying two cargoes of wheat pellets in other holds.

The ground-nut cargo was at the time of shipment infested with Khapra Beetle (Trogoderma Granarium Everts) which in its larval form was voracious and would rapidly devour a cargo of feedstuffs. As a result, the cargo was rejected at destination and both the ground-nuts and the wheat pellets eventually had to be dumped at sea and the ship chemically fumigated, causing loss and delay to the plaintiff.

The judge concluded that the shipper was liable under article IV, rule 6 of the Hague Rules, which provided:

Goods of an inflammable, explosive or dangerous nature to the shipment whereof the carrier . . . has not consented . . . may at any time before discharge be landed at any place or destroyed or rendered innocuous by

the carrier without compensation,

and the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment.

The plaintiff had claimed that the ground-nut cargo was dangerous not only to the wheat cargoes, as the judge held, but also to the ship itself, which the judge rejected.

The shipper contended that, in order to qualify, goods must be inherently dangerous, and that was not so here. All that happened was that the United States Department of Agriculture issued a directive giving the owner the choice between removing the cargoes from the United States, returning them all to their country of origin or dumping them at sea 25 miles from shore, and for commercial reasons the plaintiff elected to do the latter. The danger thus flowed not from any inherent danger in the ground-nut cargo but from the plaintiff's choice.

The uncontradicted expert evidence showed that the remaining wheat cargo was unsaleable. His Lordship agreed with the plaintiff that the whole cargo, including the wheat, was blighted, and the decision to dump it all was in reality Hobson's Choice. Thus from the moment the ground- nut cargo was loaded, the wheat cargo was subjected to the physical peril of being dumped, and consequently the losses and expenses incurred thereafter by the plaintiff arose from the shipment of the infested cargo.

Were it necessary to decide the point, his Lordship would have been very reluctant to hold that the infested cargo presented any threat of physical danger to the ship itself, although the chemical fumigation which the ship was required to undergo amounted to more than mere routine cleaning, and did at least temporarily impair its usefulness. In the circumstances, however, the point did not arise.

His Lordship then rejected the shipper's argument that it was divested of liability by virtue of section 1 of the Bills of Lading Act 1855.

Paul Magrath, Barrister