Reed Smith Client Alerts

On 8 March 2019 Justice Teare handed down judgment in the case of the CMA CGM LIBRA (Alize 1954 & another v. Allianz Elementar Versicherungs AG & others) which, in 2011, grounded on an uncharted shoal in the approaches to Xiamen in China, giving rise to salvage and claims for general average contribution. Numerous allegations of unseaworthiness were raised, all but one of which were either abandoned before trial or found in the owners’ favour. On that one remaining ground, the judge dismissed the owners’ claims for general average contribution.

The Appeal will be live streamed on Tuesday, 18 February and Wednesday, 19 February 2020.

Authors: Richard M. Gunn Konstantinos Bachxevanis

In the first instance case the judge held that: (1) the owners’ ship, CMA CGM LIBRA (the Vessel) was unseaworthy because the master and second officer had prepared a defective passage plan; and (2) the owners were responsible for the master and second officer’s negligent acts of navigation in that regard and therefore failed to exercise due diligence to make the Vessel seaworthy within the meaning of Article III, rule 1 of the Hague Rules.

The owners have appealed, and Cargo has cross-appealed on the basis that the judge was wrong to find that there was no systemic failure in the preparation of passage plans. The owners’ appeal concerns the obligation imposed on a carrier by Article III, rule 1 of the Hague Rules to exercise due diligence to make the ship seaworthy and, in particular, how that obligation applies (if at all) to a one-off defective passage plan prepared by the ship’s crew. This, in turn, depends on fundamental issues as to (1) the dividing line between matters of navigation and matters of seaworthiness and (2) the attribution to a carrier of acts of navigation by the ship’s crew for the purposes of the carrier’s duty to exercise due diligence to make the ship seaworthy.

The case has been the subject of much debate, with seminars and commentary on its potential effects being given internationally. The judicial answers to these questions will affect the owners’ and carrier’s liability, and the insurance and P+I cover consequences of the many cargo claims and other losses arising out of perceived navigational issues.

Unusually, due to the high profile and legal significance of the case, the appeal hearing will be livestreamed by the Court of Appeal starting Tuesday, 18 February 2020 at 10am for two days. Those interested in the case and the deliberations can find it at judiciary.uk.

The video will also be accessible from this website after the hearing.

 

Client Alert 2020-063