Exceptional contamination

THIS arbitration turned on the contamination of a cargo of soda ash by flakes of scale. The issues to be decided where whether the owners could rely on the charter party exception clause, and whether they had exercised due diligence to make the vessel seaworthy.

The vessel was chartered on the Gencon form. When the cargo of soda ash was discharged it was contaminated and damaged by seawater. The charterer claimed damages from the shipowner.

Clause 21 of the charter provided, "Vessel holds to be clean and dry, free of rust/residues of previous cargoes up to charterers'/shippers'/surveyors' satisfaction before notice of readiness to load can be given."

The arbitrators found that, in the course of discharging, flakes of scale had fallen from the hatch coamings and from the sides of the hatches into the cargo. Further contamination had occurred when, in order to conclude discharge, a bobcat was lowered into the hold and used. During operation, the bobcat scraped off patches of scale from the tank top. In addition, modest traces of seawater leakage through hatch joints was discovered, which had affected some of the cargo.

The owners denied liability on the basis that they could rely on Clause 2 of the charter, and/or that the damage resulted from negligent operations by the charterer's stevedore, for which the owner maintained it was not liable.

Clause 2 provided, "Owners are to be responsible for loss of or damage to the goods ... only in case the loss, damage ... has been caused by the improper or negligent stowage of the goods (unless stowage performed by shippers / charterers or their stevedores or servants) or by personal want of due diligence on the part of the owners or their manager to make the vessel in all respects seaworthy and to secure that she is properly manned, equipped and supplied or by the personal act or default of the owners or their manager ..."

The arbitrators noted that the onus of proving entitlement to rely on the exception in Clause 2 lay with the owner, who had to prove what the cause of loss was, and then show that it was not the result of any personal act, neglect or default by itself or its manager.

The owner pointed out that, about one month before, the vessel had been in port undergoing engine repairs, and that during that time it had ordered the master to remove any rust from the hatchcovers and hold sides and tans tops. Some hatch rubbers had been removed. Once the rust had been removed and the hold cleaned, painting had been carried out.

Thereafter the vessel carried a cargo of grain, after which the owner had ordered the master, in readiness for the loading of the soda ash cargo, to inspect the holds, to remove any rust and to repaint on the ballast voyage. When the ship arrived at the loading port it was passed by an SGS surveyor acting on behalf of the shipper. At least the whole of the tank top had apparently been repainted during the ballast voyage.

The conclusion reached by the arbitrators based on the extent of the contamination of the soda ash by the scale that had become loosened was that, as was so often the case in relation to the painting of ships, both inside and out, the surface preparation was insufficient. The arbitrators said it was not surprising that the SGS surveyor had passed the ship at the loading port. No doubt it looked in pristine condition, and indeed it was difficult to know just what lay under a fresh coat of paint. "But," concluded the arbitrators, "the proof of the pudding was in the eating."

It was noted that, despite complaints by the owner about the handling of the grab and the bobcat by the stevedores, neither the master or chief office, nor the owner's surveyors, found anything unusual about the conduct of the discharging operation. In any event, the arbitrators would have concluded that the owner was responsible for any negligence of the stevedores, Clause 2 being quite clear in its meaning in this respect.

It was found that, as a result of the condition of the hold, the vessel was not fir for the carriage of the cargo, and was not seaworthy, in the sense of being cargoworthy. The arbitrators said that, if the owner had personally exercised the relevant due diligence, it was difficult to see how what actually happened could in fact have occurred.

The owner was found liable for the contamination of the cargo, and also for the water damage, the point being made that some moderately bad weather encountered on the laden voyage could not be relied upon as a heavy weather or perils of the sea defence.