After carefully considering the arguments and case law both in the UK and elsewhere, the Supreme Court has rejected the appeal and found the vessel unseaworthy by virtue of a defective passage plan.
There were two issues to be determined. The first and main issue was whether, as the owners contended, the shipowner carrier’s obligation under the Hague Rules is subject to a category-based distinction between, on the one hand, a vessel’s quality of seaworthiness or navigability, and on the other, the crew’s act of navigating. The owners said that there is a distinction between seaworthiness, which concerns the attributes and equipment of the vessel, and that of the navigation and management of the vessel, which concerns how the crew operates the vessel using those attributes and equipment. The second and related issue arose in relation to the obligation of due diligence. Here, the owners said that so long as the carrier has equipped the vessel with all that is necessary for her to be safely navigated, including a competent crew, then the crew’s failure to navigate the vessel safely is not a lack of due diligence by the carrier – a distinction to the Muncaster Castle test.
The particular defect found by the admiralty judge was that neither the passage plan nor the chart contained a warning about depths being less than charted outside of the fairway. Hence “it was therefore defective or inadequate and imprudently so. A source of danger when leaving Xiamen was not clearly marked as it ought to have been.” It was also causative as the admiralty judge found that had the warning been marked, the master would have been “most unlikely” to have left the buoyed channel and that such departure was negligent and a “real and effective cause” of the grounding.
As a matter of law, a shipowner is not entitled to recover GA contributions from the owners of the cargo where the loss or expenditure was caused by its “actionable fault” which includes any causative breach of the terms of the relevant contract of carriage. All the relevant contracts of carriage contained the Hague Rules. The cargo interests asserted a breach of article III rule 1 that the owners had failed to exercise due diligence before the beginning of the voyage to make the vessel seaworthy in that the passage plan was defective.