Lightening the load

Lightening the load

The Belgian courts hold carriers fully liable for damage to or loss of undeclared deck cargo. But there are ways to minimise the impact, says Clive van Aerde of Van Aerde & Partners

BELGIAN jurisprudence is very severe vis-à-vis carriers when damage or loss is caused to undeclared deck cargo. There has been criticism on this jurisprudence and for some time there was doubt as to whether it also applied to containers carried on the decks of containerships. In two decisions of December 1, 2000, the Belgian Court of Cassation closed the discussions by confirming the existing jurisprudence and specified that it also applies to containers on the decks of specialised containerships.

According to Belgian jurisprudence, any holder of the bill of lading who is not the shipper is considered to be a third party holder, providing it is not acting as an agent of the shipper, or that the shipper did not act as an agent on its behalf when entering into the contract of non-negotiable carriage. Even a consignee who is named as such in a nominative bill of lading is considered to be a third party holder, unless the bill of lading has been specifically declared to be non-negotiable.

Where the cargo is carried under a negotiable bill of lading and the plaintiff is a third party holder of the bill of lading, the situation is as follows:

Undeclared deck cargo

A third party holder, including a named consignee, who receives a clean bill of lading, which does not specifically state that the cargo is stowed on deck, can expect its cargo to be carried in the hold where it is not exposed to the risks it would have run on deck. This applies even if the ship is a specialised containership, because here too containers stored above deck are subjected to higher risks than those stowed in the hold.

When cargo is stowed on deck without this being specifically stated in the bill of lading, the carrier is fully liable for any loss or damage;

• without any need for the third party holder to show that stowing the cargo on deck was in itself an act of negligence ;
• without the carrier being allowed to call upon any of the exemptions or limitations of liability in the Hague-Visby Rules
• and without the carrier being allowed to call upon any terms in the bill of lading which might exempt, reduce or limit its liability.

There is no way the carrier can escape this liability. At present, the only exception is if the ship is one of the rare open ‘full containerships’, because they do not have a deck and therefore no deck stowage is to be declared.

A mere “deck option clause” on the bill of lading stipulating that the carrier is allowed to stow the cargo on or below deck at its discretion is insufficient, because it does not inform the third party holder that the cargo has in fact has been stowed on deck. Deck cargo is only considered to have been duly declared if its stowage on deck has been specifically stated in the bill of lading.

Declared deck cargo

The mere fact that the stowage on deck is specifically stated in the bill of lading does not as such exempt the carrier from liability for loss or damage incurred during the voyage. Here the general principles on the liability of the carrier come into application. They stipulate that the carrier guarantees a result, namely to deliver the cargo at destination in the state in which it received it and in the state described in the bill of lading.

For the third party holder it is sufficient to show that the cargo did not arrive at its destination in the state as described in the bill of lading. There is even a presumption that the loss or damage was incurred during the voyage if the cargo interests have, in due time, given notice to the carrier of the loss or damage.

As soon as it is shown that the loss or damage was caused during the voyage, the carrier is presumed to be liable and can only escape liability if it shows that the damage or loss was caused exclusively either by an external cause, by coincidence, by inherent vice or by force majeure. The burden of proof here is entirely upon the carrier.

The carrier should therefore insert clauses among the conditions printed on its bill of lading that exempt, reduce or limit its liability and reverse the burden of proof. Provided the deck stowage is duly declared in the bill of lading, such clauses are valid as long as they do not change the nature of the contract or exempt the carrier from damage or loss caused by its own personal negligence. Here are some examples of clauses, and comments on their value and/or impact;

• A generally worded clause stipulating that the cargo is carried on deck “without liability for loss or damage howsoever caused”, is valid and exempts the carrier from liability for negligence. However, because it is generally worded, it does not exempt the carrier if the negligence amounts to gross negligence or intentional negligence.
• A more specifically worded clause stipulating that “the carrier will not be liable for loss or damage howsoever caused, not even if caused by gross negligence of the carrier or its servants or agents” is also valid. Here the carrier will only be liable if the loss or damage is caused by intentional negligence.
• Given that, under the general principles, there is a presumption of liability, the carrier could also ensure that the burden of proof is reversed by combining exemption and/or limitation clauses with a clause that puts the burden of proof upon the cargo interests.
• In practice, sometimes deck stamps are used that state “shipped on deck at shipper’s risk” without there being any other clauses in the bill of lading that exempt, reduce or limit the carrier’s liability or reverse the burden of proof. In such a case, the addition “at shipper’s risk” in the deck stamp implies that the carrier is liable only for damage or loss caused by its own negligence, or that of its servants and agents. Some are of the opinion that it also implies that the burden of proof is upon the third party holder. This view can, in my opinion, be disputed because the words “at shipper’s risk” do not as such say anything about the burden of proof. In case of doubt about the meaning of such a clause, it is interpreted against the carrier and in favour of the cargo interests. Therefore, in order to be sure about the reversal of the burden of proof, the carrier should at least insert a clause in its bill of lading conditions explicitly stipulating that the burden of proof is upon the cargo interests.

Where the cargo is carried under a sea waybill or under a non-negotiable bill of lading, or where it is carried under a negotiable bill of lading, but the plaintiff is the shipper and not a third party holder, the case is as follows;

The carrier is fully liable for loss or damage in the same way that it is responsible for undeclared deck carriage to a third party holder if the cargo was stowed on deck without the written consent of the shipper. However, here the carrier’s position is slightly less uncomfortable than when the plaintiff is a third party holder of a negotiable bill of lading.

Although, theoretically, the shipper’s written consent is required, the jurisprudence accepts that the shipper’s consent to on-deck stowage can be inferred not only from documents issued or signed by the shipper, but also from the fact that the shipper has accepted without protest a bill of lading which states specifically that the cargo is stowed on deck.

The requirement for the shipper’s consent can be set aside by the contract. Therefore, a deck option clause allowing the carrier to stow the cargo on or below deck at its discretion is binding on the shipper. If there is a deck option clause of this type, there is no need for the carrier to seek the shipper’s specific consent to stowage on deck, nor to declare the deck stowage in the bill of lading.

If the shipper has consented to the cargo being stowed on deck, or if there is a deck option clause, the general principles above apply and the carrier can rely on the clauses in the contract of carriage that limit or reduce its liability and/or reverse the burden of proof.