MarIus

5.1.1 Regarding Maxine Footwear

Heavy reliance was placed on the Privy Council decision in Maxine Footwear as it provided authority for the major point in the CMA CGM Libra judgement, “where loss or damage is caused by a breach of the carrier’s obligation to exercise due diligence to make the vessel seaworthy under article III rule 1, the article IV rule 2 exceptions cannot be relied upon, including where the excepted matter is the cause of the unseaworthiness”^{(1)Libra [2021], 70} In light of this, it is useful to consider the circumstances of Maxine Footwear.^{(2)Maxine Footwear Co Ltd v Canadian Government Merchant Marine Ltd [1959] AC 589.} In this case, after loading was completed, a deck officer instructed an employee of an independent contractor to use an oxygen-acetylene lamp to clear ice from the scupper pipes. This action caused a fire, ultimately necessitating the scuttling of the vessel.^{(3) Wilson (2001) p. 266} Accordingly, the vessel was unable to proceed on the intended voyage.

In Maxine Footwear, the Lordships made it clear that “from the time when the ship caught fire, she was unseaworthy”.^{(4)Maxine Footwear, p. 113} As quoted by the Supreme court in CMA CGM Libra, Lord Somervell of Harrow held that “Art. III, Rule 1, is an overriding obligation. If it is not fulfilled and the non-fulfilment causes the damage, the immunities of Art. IV cannot be relied on. »^{(5)Maxine Footwear, p. 113} Whilst the latter statement has been construed to have wide reaching applicability, it is important to note that the unseaworthiness in question in Maxine Footwear is distinguishable to the unseaworthiness in question in CMA CGM Libra. In Maxine Footwear, the vessel caught on fire prior to departure and hence, the “casualty” happened prior to departure. In CMA CGM Libra the vessel grounded whilst on its voyage and accordingly, the “casualty” occurred subsequent to departure.

Furthermore, it follows that a vessel on fire is unfit to proceed on a voyage, let alone carry cargo, and hence it seems quite self-explanatory that said vessel would be unseaworthy before and at the beginning of the voyage. As held by Phillips LJ in Apostolis, a case concerning the seaworthiness of a vessel where sparks from welding work being carried out on deck fell on to cargo of flammable cotton causing it to be damaged by fire, “ I have always found that a difficult decision (Maxine Footwear), but it is plainly distinguishable from the present case, for in Maxine the structure of the ship was on fire, which made it necessary to scuttle the ship. In those circumstances it is not surprising that it was conceded that the ship was rendered unseaworthy by the fire.”^{(6) A Meredith Jones & Co Ltd v Vangemar Shipping Co Ltd (The Apostolis) [1997] 2 Lloyd’s Rep 241, p 257} It is also worth noting that the Maxine Footwear judgment was relatively brief and lacked detailed reasoning. Consequently, it is not certain that Lord Somervell of Harrow intended his statement to have such broad applicability as to extend the scope of seaworthiness to concern matters of navigation.

It could, hence, be argued that the reliance placed on Maxine Footwear was somewhat inappropriate, particularly given that the unseaworthiness in question in CMA CGM Libra was due to an error in navigation, and the actual casualty did not culminate until the vessel had proceeded on its voyage. The Supreme Court did, however, refer to other authority where a vessel was held to be “unseaworthy by negligent management of the vessel, despite the nautical fault exception in article IV rule 2(a)”,^{(7)Libra [2021], 83}as will be examined in the following chapter.

5.1.2 Caselaw Demonstrating Unseaworthiness by Negligent Management and Navigation

The Supreme Court cited Steel v State Line Steamship Co, Gilroy Sons & Co v W R Price & Co, G E Dobell & Co v Steamship Rossmore Co Ltd and The Friso, as authority that demonstrated that negligent management could render a vessel unseaworthy^{(8)Libra [2021], referring to Steel v State Line Steamship Co (1877) 3 App Cas 72, Gilroy Sons & Co v W R Price & Co [1893] AC 56, G E Dobell & Co v Steamship Rossmore Co Ltd [1895] 2 QB 408 and The Friso [1980] 1 Lloyd’s Rep 469}. It is noteworthy that three of the four cases referred to by the Supreme Court concerned contracts of carriage prior to the inception of the Hague Rules. For example, in Gilroy Sons, the bill of lading exempted the shipowner from “any act, neglect, or default whatsoever of pilot, master, or crew in the navigation of the ship in the ordinary course of the voyage”.^{(9) Gilroy Sons, para 1.} Clearly, the relevant exemption clause can be distinguished from Article IV of the Hague Rules in that “management of the ship” was not included and it clearly expressed that the exemption can only apply “in the ordinary course of the voyage”. Furthermore, the common law undertaking of absolute seaworthiness applied at the time. Accordingly, the effects of the relevant contract of carriage cannot be the same to that of a contract of carriage pursuant to the Hague Rules. Hence, one may question the pertinence of the authority in Steel v State Line Steamship, Gilroy Sons and G E Dobell to the case at hand.

The Friso judgment concerned a contract of carriage pursuant to the Hague rules. However, the facts of the case are clearly distinguishable to that of CMA CGM Libra. In Friso, the vessel was found to be unseaworthy, either by reason of the crew’s failure to adequately lash the cargo or, as the trial judge Sheen J found more probable, “Friso was unseaworthy because she lacked adequate stability”.^{(10)The Friso [1980] p. 474} The Supreme Court in CMA CGM Libra referred to the Friso as an example of a case where negligence in the management of the ship rendered the vessel unseaworthy, holding that it was the master’s failure “before the voyage to press up three double bottom tanks so that the vessel was unstable” which made the vessel unseaworthy.^{(11) Libra [2021], 83} However, the Friso judgement does not once refer to “negligence in management of the ship” as the reason for unseaworthiness, nor did the defendant owners even attempt to invoke the “negligence in management” defense. The vessel was rendered unseaworthy on the grounds that “Friso was not fit in condition or equipment to encounter the ordinary perils of the voyage”.^{(12)The Friso [1980] p. 476} Accordingly, it does seem to be a slight stretch to refer to Friso as authority for unseaworthiness on grounds of negligence in management of the ship at the commencement of the voyage.

The Supreme Court then went on to reference two cases where supposedly an act of navigation rendered a vessel unseaworthy, The Thordoc and The Evje.^{(13) Libra [2021], 84 with reference to Paterson Steamships Ltd v Robin Hood Mills Ltd (The Thordoc) (1937) 58 Ll L Rep 33 & E B Aaby’s Rederi A/S v Union of India (No 2) (The Evje) [1978] 1 Lloyd’s Rep 351} In The Thordoc, the vessel was held to be unseaworthy on grounds that her compass was not properly adjusted by a compass adjuster at the commencement of the voyage.^{(14) Ibid} There was, effectively, no negligence involved in the use of the navigational instrument such as in CMA CGM Libra. There was, however, a defect in the vessel’s navigational equipment/instrument before and at the beginning of the voyage. This would naturally render the vessel unseaworthy as the vessel was not properly equipped, which is expressly defined as an aspect of seaworthiness per Hague Rules, Article III, r.1 (b). This is in contrast with CMA CGM Libra where the vessel was sufficiently equipped with adequate tools and equipment for safe navigation.

In The Evje, it was held that “the vessel was unseaworthy at the beginning of the voyage either because she had insufficient bunkers, or because they were of the wrong quality, or for both reasons.”^{(15)The Evje [1978], p. 355} The master’s failure to bunker the ship in a sufficient manner for the intended voyage seems less related to negligence in matters of navigation and more related to a failure to properly “supply” the ship, as expressly referred to as an aspect of seaworthiness under the Hague Rules, Article III, r.1 (b). As held in Carver on Charterparties (1^st edition), it is established that in relation to seaworthiness with regards to the ship`s structure including machinery and equipment, that “the ship is obliged to carry necessary supplies, such as bunkers, as well as spare parts that may be necessary, and their absence may constitute unseaworthiness”^{(16) Bennett (2017), at 3-118}

In reviewing above caselaw, it might be argued that the UK Supreme Court in CMA CGM Libra have, in their interpretation of the nautical fault exemption, failed to acknowledge that not all matters related to “management and navigation” of the vessel falls within the scope of the nautical fault exemption. As held by the US Supreme Court in International Navigation, a case that will be further reviewed in chapter 5.1.3, “ the word "management" is not used without limitation and is not therefore applicable in a general sense as well before as after sailing.”^{(17)International Navigation (1901), p. 181 U. S. 226 (will be further reviewed in chapter 5.1.3)} Further, in the UK House of Lords Ruling in Hill Harmony it was held that “navigation” was limited to matters of “seamanship”, Lord Hobhouse explaining “What is clear is that to use the word ‘navigation’ in this context as if it includes everything which involves the vessel proceeding through the water is both mistaken and unhelpful. As Lord Summer pointed out, ‘where seamanship is in question, choices as to speed or steering of the vessel are matters of navigation, as will be the exercise of laying off a course on a chart.”^{(18) Whistler International Ltd v Kawasaki Kisen Kaisha Ltd. («The Hill Harmony”) [2001] 1 Lloyd's Rep. 147. House of Lords, p. 159} Therefore, it might be argued that by referring to precedence which supposedly demonstrates that nautical faults at the commencement of the voyage have previously rendered a vessel unseaworthy, the Supreme Court have failed to consider that there are limits to the nautical fault exemption. In contrast to the caselaw reviewed above, the relevant fault in CMA CGM Libra, being the second officer and master’s failure to produce an adequate passage plan, clearly falls within the scope of negligent navigation.

Furthermore, as argued by the owners’, the above cases referred to by the Supreme Court “can be distinguished on the facts because they involved an act of navigation or management which caused the unseaworthiness, whereas in CMA CGM Libra the act of navigation is itself the unseaworthiness.”^{(19) Libra [2021], 85} The Supreme Court, however, held that “this is not a principled distinction. If the vessel is unseaworthy then it can make no difference whether negligent navigation or management is the cause of the unseaworthiness or is itself the unseaworthiness”.^{(20) Ibid} It could be argued that the approach taken by the Supreme Court in this regard is too simple as it seems to slightly overlook the point being made by Owners: seaworthiness has not been understood to extend to matters of navigation. The Owners attempted to further support their position by citing US case law that indicates that seaworthiness does not extend to matters of navigation.

5.1.3 US Caselaw Demonstrating that Seaworthiness Does Not Extend to Matters of Navigation

Owners referenced the decisions of the Federal District Court for the Eastern District of Pennsylvania in The Oritani,(21)The Oritani (1929) 40 F 2d 522the Court of Appeals (2nd Circuit) in the The Iristo^{(22)Middleton & Co (Canada) Ltd v Ocean Dominion Steamship Corpn (The Iristo) (1943) 137 F 2d 619} and the Court of Appeals (Fifth Circuit) in The Jalavihar.^{(23) Usinas Siderugicas de Minas Geras, Sa-Usimings v Scindia Steam Navigation Co (The Jalavihar) (1997) 118 F 3d 328.} The facts of these cases are similar to that of CMA CGM Libra. Hence, it is of interest to examine these cases, and consider the US Courts` reasoning and conclusions in cases considering the intersection between initial unseaworthiness and the error in navigation exemption. The three cases concerned either contracts of carriage pursuant to the Hague/Hague-Visby Rules or the American predecessor to the Hague Rules, The Harter Act, which more or less prescribed the same relevant obligations and immunities upon the carrier, including the due diligence obligation to make the vessel seaworthy and the nautical fault exemption.^{(24) The Harter Act (1893) (27 Stat. 445, 46 U.S.C. § 192 [46 USCA § 192]}

In the Oritani, District Judge Kirkpatrick considered if the master’s failure to obtain the requisite compass data at the commencement of the voyage to enable correction of compass readings affected the seaworthiness of the vessel. The court concluded that the vessel was seaworthy, reasoning that “the obtaining of sufficient compass data, or rather the supplementing of an insufficient deviation record, is entirely a matter of navigation, not affecting the seaworthiness of the vessel”.^{(25)The Oritani (1929) at 528} Effectively, it was held that matters of navigation do not affect the seaworthiness of the vessel.

In the Iristo, the Master and the first and second mates negligently failed to bring the chart up to date by not adding to it information of a wreck which was available to them in the Notices to Mariners onboard the ship, resulting in the vessel deviating from its course and grounding on a reef.^{(26)The Iristo (1943) at 621} The Circuit Judge, Augustus Hand, held that the vessel was seaworthy “because of the notices on board which disclosed the existence and location of the wreck and that the failure to bring the chart up to date, or otherwise to use the information available, when navigating in the vicinity of Bermuda, was a fault "in navigation or management."^{(27)The Iristo (1943) at 622} The Judge further stated that, “I absolutely decline to hold that a ship is unseaworthy because there being the materials on board to be used for the purpose for which seaworthiness is required, the officers of the ship do not use the materials which are available."^{(28) Ibid, at 623} Thus, the vessel was deemed seaworthy, as it was equipped with sufficient materials for safe navigation and the crew`s failure to utilize the materials could not amount to unseaworthiness.

Finally, in the Jalahaviar, the circuit judges examined the seaworthiness of a vessel that grounded whilst unberthing due to miscommunication between the vessel`s pilot and the captain of the assisting tug. Cargo owners claimed that “any error in navigation that causes damage to a vessel prior to the commencement of a voyage should be considered a lack of due diligence”.^{(29)The Jalavihar (1997), at 331} The Circuit judges held that “We see no reason to restrict the navigational error exception to errors occurring after the commencement of a voyage. We therefore agree with Scindia (the Owners) that COGSA excepts navigational errors regardless of whether they occur before or after a voyage commences and do not reach the question of whether a voyage had commenced in this case».^{(30) Ibid, at 332} Accordingly, the circuit judges declined the notion that the exemption for errors in navigation can only apply after commencement of the voyage.

It is evident from the US authorities cited by the Owners in CMA CGM Libra that navigational errors occurring "before and at the commencement of the voyage" can still qualify as "negligent navigation" for the purpose of the nautical fault exemption. However, the UK Supreme Court held that the US caselaw was not of assistance as the cases do not demonstrate a uniform approach,^{(31)Libra [2021], 107} the Court pointing at the US Supreme Court decision in International Navigation.^{(32)International Navigation Co v Farr & Bailey Manufacturing Co (1901) 181 US 218, 21 S Ct 591, 45 L ed 830} In this case, the vessel was found to be unseaworthy on grounds that the crew had failed to fasten the port covers at the commencement of the voyage, causing damage to the cargo, the US Supreme Court explaining that, “even if the loss occur through fault or error in management, the exemption cannot be availed of unless the vessel was seaworthy when she sailed, or due diligence to make her so had been exercised, and it is for the owner to establish the existence of one or the other of these conditions. The word "management" is not used without limitation and is not therefore applicable in a general sense as well before as after sailing”^{(33)International Navigation (1901), p. 181 U. S. 226}. The Supreme Court in CMA CGM Libra hence held that, “The International Navigation case is entirely consonant with the English law authorities which show that a vessel may be rendered unseaworthy by negligent management of the vessel, despite the nautical fault exception in article IV rule 2(a)»^{(34)Libra [2021], 109}

The Supreme Court`s reference to International Navigation as response to the US authorities presented by the owners seems to slightly overlook the fact that an error in management and an error in navigation have potentially different effects. In International Navigation, the crew failed to fasten the after port on the starboard side in compartment No. 3, where cargo was located, causing damage to the cargo. Hence, the error was less related to management of the vessel and was more clearly a failure by the crew to exercise due diligence to “make all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation», as explicitly expressed as an aspect of seaworthiness in the Hague Rules, Article III r. 1(c).

Errors in management are hence more capable of rendering the vessel unseaworthy, in the traditional sense, at the commencement of the voyage. To exemplify, International Navigation was not the first case where a vessel was found to be unseaworthy on grounds that parts of the ship in which goods are to be carried was not fit for their safe carriage. In contrast, CMA CGM Libra appears to be the first case where a defective passage plan has rendered a vessel unseaworthy. The consequences of a defective passage plan are not known at the commencement of the voyage whilst the consequence of an unfastened port is evident already at the commencement of the voyage.

Furthermore, as reflected upon in chapter 5.1.2, and as pointed out in the International Navigation case, “the word "management" is not used without limitation and is not therefore applicable in a general sense as well before as after sailing.“^{(35)International Navigation (1901), p. 181 U. S. 226} The word “navigation”, on the other hand, is not nearly as broad and is clear in its meaning, suggesting that it is not necessary to limit its application in the same way at the commencement of the voyage. In Jalahaviar, the Circuit Court did consider the authority in International Navigation, but distinguished it from the case under consideration, as the Jalahaviar did not concern an error in management, but rather an error in navigation.^{(36)The Jalavihar (1997), p. 332}

5.1.4 Summarizing Remarks Regarding US Caselaw

The American approach seems to reflect the understanding that “owners are justified in committing all matters of navigation to skillful and experienced navigating officers”^{(37)The Oritani (1929) at 528} and hence, matters of navigation cannot affect the seaworthiness of the vessel. The US authorities further indicate that there is no reason to apply a strict temporal limit to the application of the navigational fault exemption. Moreover, U.S. courts appear to differentiate between errors in management and errors in navigation based on their actual impact on the vessel at the commencement of the voyage. Consequently, it could be argued that the US authority invoked by the owners does indeed provide a uniform approach in matters concerning errors in navigation at the commencement of the voyage.

Conclusively, it seems the facts of the US cases cited by the owners align closely with the facts of the CMA CGM Libra, suggesting that the principles derived from these cases might be applicable to the matter at hand. After all, as accepted by the Supreme Court in CMA CGM Libra, “It is important to remember that the Act of 1924 was the outcome of an International Conference and that the rules in the Schedule have an international currency. As these rules must come under the consideration of foreign courts it is desirable in the interests of uniformity that their interpretation should not be rigidly controlled by domestic precedents of antecedent date, but rather that the language of the rules should be construed on broad principles of general acceptation».^{(38) [34] with reference to the passage of Lord Macmillan at p. 350 in Stag Line Ltd v Foscolo, Mango & Co Ltd [1932] AC 328}

Nevertheless, the Supreme Court ultimately rejected the U.S. case law cited by the owners, holding that under the correct interpretation of the Hague Rules, errors in navigation can constitute initial unseaworthiness. This necessarily excludes the application of the navigational fault exemption in such cases.

5.1.5 Review of the Wording of the Hague Rules

Considering the insights offered by the US caselaw and the alternative approaches it proposes, it is of interest to conduct a deeper examination of the relevant provisions in the Hague Rules. Article III r. 1(a) of the Hague Rules clearly stipulates that the due diligence obligation to make the vessel seaworthy applies before and at the beginning of the voyage. The nautical fault exemption in article IV r.2, on the other hand, does not expressly stipulate a temporal limit for its application. Hence, a simple interpretation of the wording of Article IV r. 2 indicates that the nautical fault exemption can just as well apply at the commencement of the voyage, as during the voyage.

However, the Supreme Court asserted that “the scheme of the relevant Rules is clear”^{(39)Libra [2021], 61} in that “article IV rule 1 sets out the relevant right and immunity for the carrier’s responsibilities and liabilities under article III rule 1, and article IV rule 2 sets out the relevant rights and immunities for the carrier’s responsibilities and liabilities under article III rule 2”.^{(40) Ibid} The Court further clarified that the correct interpretation of the Hague Rules aligns with the Privy Council's decision in Maxine Footwear where it was established that “Article III, rule 1, is an overriding obligation. If it is not fulfilled and the nonfulfillment causes the damage, the immunities of Article IV cannot be relied upon.”^{(41)Libra [2021], 68 with reference to Maxine Footwear [1959] AC 589, at pp 602-603} However, as discussed in Chapter 5.1.1, the factual circumstances of Maxine Footwear differ from those in CMA CGM Libra, raising doubts about the direct applicability of the principles from Maxine Footwear to the latter case.

The Supreme Court further emphasized that, even if some ambiguity remained regarding the correct interpretation of the Hague Rules, there is no evidence in the travaux préparatoires to suggest an alternative understanding.^{(42) Ibid, 77} The Court stated that there is neither a “clear, pertinent, and consensual resolution of the issue” nor a definitive “bull’s eye” in the preparatory works to contradict this interpretation.^{(43) ibid} But, considering the caselaw discussed in Chapters 5.1.1 through 5.1.4, it remains worthwhile to explore whether the travaux préparatoires might suggest alternative interpretations of the Hague Rules beyond the Supreme Court’s view.

5.1.6 Seaworthiness and the Nautical Fault Exemption in Preparatory Works of the Hague Rules

The Travaux Préparatoires of the Hague Rules (“the travaux”) refer to the preparatory materials, documents, and discussions created during the drafting process of the Hague Rules.^{(44) The Travaux Préparatoires of the Hague Rules and the Hague-Visby Rules (hereinafter, “Travaux”)} The Supreme Court recognized that when interpreting the Hague Rules, regard may be had to the travaux “as a supplementary means of interpretation of the Hague Rules”.^{(45)Libra [2021], 37} Hence, the Supreme Court did consider the travaux when examining the relationship between initial unseaworthiness and the nautical fault exemption.

The Court concluded that “there is nothing in the travaux which shows that the nautical fault exception was meant to limit the shipowners’ obligation to make the vessel seaworthy before the commencement of the voyage or that they were to be mutually exclusive.”^{(46) Ibid, 78} This statement does seem to slightly overlook the fact that drafters of the Hague Rules could likely not envisage an instance where an error of navigation could also amount to initial unseaworthiness. Accordingly, such a scenario was, naturally, not addressed. The drafters did however emphasize, in a clear manner, the importance of the error in navigation exemption.

5.1.7 Does the Judgement Impose an “Extended or Unnatural Meaning” to Seaworthiness?

Owners, when making their arguments in favor of an “attribute threshold” referred to the authority in The Aquacharm.^{(55)Actis Co Ltd v Sanko Steamship Co Ltd (The Aquacharm) [1982] 1 WLR 119} In this case, the vessel was overloaded at departure by fault of the master, so she was prevented by her draught from transiting the Panama Canal as intended. The question was whether the overloaded state of the vessel rendered her unseaworthy at the commencement of the voyage. The UK Court of Appeal found that the vessel was seaworthy at the commencement of the voyage, Lord Denning stating that “I think the word "seaworthy" in The Hague Rules is used in its ordinary meaning, and not in any extended or unnatural meaning. It means that the vessel - with her master and crew - is herself fit to encounter the perils of the voyage and also that she is fit to carry the cargo safely on that voyage.”(56) Ibid, p. 9

Although the facts of the Aquacharm case can be distinguished from the CMA CGM Libra case, so the principles derived from the judgement are not directly applicable, it is nevertheless worth reflecting on Lord Denning's view on the term "seaworthiness" under the Hague Rules. With the Travaux in mind, one might question whether in finding that an error in navigation resulted in unseaworthiness, the Supreme Court have imposed “an extended and unnatural” meaning to seaworthiness.

When determining how to interpret the Hague Rules, The Supreme Court made reference to Nautical Challenge Ltd v Evergreen Marine,^{(57)Libra [2021, 34, referring to Nautical Challenge Ltd v Evergreen Marine (UK) Ltd [2021] UKSC 6; [2021] 1 WLR 1436} where guidance on interpretation was found in Article 31.1 of the Vienna Convention on the Law of Treaties 1969 which stipulates that “A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.” The word “seaworthy” is vague, and likely purposefully so, to allow its meaning to develop with time. However, for the sake of legal predictability and particularly with insurance in mind, there must, arguably, be limits to what encompasses as “unseaworthy”. As submitted by Owners in CMA CGM Libra, the “object and purpose of the Hague Rules is to spread risk and allocate the cost of insurance” and in relation to navigation, it is understood that “cargo interests have to insure themselves against the risk of negligent navigation causing damage to their cargo.”^{(58) Ibid, 53} Considering the Travaux, US caselaw and the apparent absence of English case law treating errors in navigation as initial unseaworthiness, it could be argued that the “ordinary meaning” of seaworthiness has not been considered to encompass errors in navigation.

This is further exemplified by reviewing the New Zealand Supreme Court case, Tasman Pioneer, where the Court reflected upon the meaning of seaworthiness under the Hague-Visby Rules, “The scheme of the Rules is clear. Carriers are responsible for loss or damage caused by matters within their direct control (sometimes called "commercial fault"), such as the seaworthiness and manning of the ship at the commencement of the voyage»^{(59)Tasman Orient Line CV v New Zealand China Clays Ltd and Others (The “Tasman Pioneer”) [2010] 2 Lloyd's Rep. 13. Supreme Court of New Zealand, para. 8} This understanding of the Rules indicates that matters of navigation are not to be considered aspects of seaworthiness, as navigation is not within owner’s “direct control”. As reflected upon by Solvang (2020), “nautical matters are within the prerogative of master and crew, hence outside of the owner’s “direct control”, as that phrase was used in the Tasman Pioneer.”^{(60) Solvang (2020), p 52.}

Nevertheless, in applying the “prudent owner” test for seaworthiness, the Supreme Court found the vessel to be unseaworthy due to negligence in passage planning at the commencement of the voyage. As held by the trial Judge, “«the prudent owner would have required the defective passage plan to be made good before the vessel set to sea”. Given that the “prudent owner” test was the primary tool for making a finding of unseaworthiness, it is of interest to examine this test.

5.1.8 Regarding the “Prudent Owner Test”

The “prudent owner” test derives from a passage in Carver, A Treatise on the Law relating to the Carriage of Goods by Sea, where it was stated that a seaworthy vessel “must have that degree of fitness which an ordinary careful and prudent owner would require his vessel to have at the commencement of her voyage, having regard to all the probable circumstances of it. To that extent the shipowner… undertakes absolutely that she is fit; and ignorance is no excuse. If the defect existed, the question to be put is, would a prudent shipowner have required that it should be made good before sending his ship to sea had he known of it? If he would, the ship was not seaworthy within the meaning of the undertaking.”^{(61) Bennett (2017), at 3-075} The passage was first approved in McFadden v Blue Star, and since in other ensuing caselaw.^{(62) Ibid, referring to McFadden v Blue Star Line [1905]1 K.B. 697 at 703}

In analyzing the prudent owner test, it is first worth noting that the test derives from the common law warranty of seaworthiness. As established in Chapter 3 of this thesis, the common law undertaking of seaworthiness is absolute, which entails that “it is not merely that the shipowner should do their best to make the ship fit, but that the ship should really be fit”^{(63) Ibid, at 3-074} With the Hague Rules, the absolute obligation of seaworthiness was reduced to one of due diligence.^{(64) Baatz (2018) p. 132} It may therefore be argued that the prudent owner test is too colored by the common law doctrine of absolute seaworthiness, and hence, less suitable in cases concerning the due diligence obligation of seaworthiness under the Hague Rules. The common law doctrine of absolute seaworthiness was harsh on shipowners, likely with the intention to balance out the legal playing field between shipowners who enjoyed contractual freedom and strong bargaining power and shippers who had little choice but to accept excessive exemption clauses. With the Hague Rules, shipowners no longer enjoy contractual freedom, so it might be argued that a very harsh doctrine of seaworthiness is less necessary. The “prudent owner test”, however, continues to promote an arguably harsh standard of seaworthiness.

As pointed out by David Richards of North Standard P&I in a webinar regarding the CMA CGM Libra, “the prudent owner test is only too capable of returning one answer from the position of hindsight when you know a serious loss had occurred.”^{(65) Quadrant Chambers (2022) at 35:15} Naturally, if a loss occurs, a “prudent shipowner” would in hindsight state that he would have required that the relevant defect be made good. Accordingly, the “prudent owner test” is not exactly constructive, as it does not set out what a prudent owner might have done differently to make the vessel seaworthy. It simply affirms that in the case of a causative defect at the commencement of the voyage, a vessel will always be unseaworthy, regardless of the circumstances surrounding the relevant defect.

It was held by Cresswell J in the Eurasian Dream, that “seaworthiness must be judged by the standards and practices of the industry at the relevant time, at least so long as those standards and practices are reasonable.”^{(66)Eurasian Dream [2002] at para. 127} A passage from Steel J in The Torepo might provide some guidance as to what might be considered reasonable standards and practices of the industry at the relevant time with regards to passage planning.^{(67)Libra [2021] 105 referring to The Torepo [2002] EWHC 1481 (Admlty); [2002] 2 Lloyd’s Rep 535} In The Torepo, the Court considered the seaworthiness of a vessel that had grounded, whereby one of the allegations of unseaworthiness was that there was no proper passage plan. The relevant passage plan was found to be in order, but Steel J commented that, “But let me assume in the claimants’ favour that the passage plan was defective in one or more of the respects suggested, it was not in the event contended that this flowed from any failure of the defendants to provide a proper system in the sense that the guidance and instructions furnished by the owners were in any sense inappropriate. Section 5 of the Navigational Procedures Manual was devoted to passage planning including the requirement that the planning should include any passage through pilotage waters (5.1.1 and 5.2.8). Those instructions (taken with the additional publications furnished on board such as the Bridge Procedures Guide) were agreed to be fully appropriate and sufficient.”^{(68)The Torepo [2002] at 100}

Steel J`s obiter statement regarding passage planning indicates that a prudent owner, with the standards and practices of the industry at the relevant time in mind, would be expected to provide a proper system for navigation and sufficient materials and tools to allow for adequate passage planning. There was nothing to indicate that owners of CMA CGM Libra had not acted accordingly. The Supreme Court, however, held that, “To the extent that the obiter passage at para 100 of David Steel J’s judgment in The Torepo suggests that the carrier’s seaworthiness obligation in relation to passage planning is limited to providing a proper system for such planning it is not a correct statement of the law».^{(69)Libra [2021], 143}

The Supreme Court further emphasized that in any event, the grounding of the Torepo occurred in 1997, which was before the adoption of the Guidelines for Voyage Planning.^{(70) Ibid} The Supreme Court accordingly built on the opinion of Justice Teare in the Admiralty Court who held that “I am confident that by 2011 the prudent owner would have insisted on such a (adequate) passage plan before the voyage was commenced»^{(71)Libra [2019], 87} This appears to be an attempt to reconcile the prudent owner test with the idea that “seaworthiness must be judged by the standards and practices of the industry at the relevant time”.

The IMO Guidelines on Passage Planning prescribe recommendations as to how to develop a sufficient passage plan, placing the responsibility of approval of said passage plan on the master.^{(72) Guideline for Voyage Planning (1999), article 3.4} Furthermore, the Guidelines emphasize the importance of close and continuous monitoring of the vessel's progress and position during the execution of such a plan. It is argued that owners of CMA CGM Libra had acted according to what could be reasonably expected in relation to passage planning, by equipping, employing and instructing the vessel with all that is needed for sufficient passage planning in accordance with the Guidelines. After all, as recognized in the Admiralty Court, “The Owners' own guidance to their masters emphasized that the information noted on the passage plan should include "the areas to be avoided" and "navigation dangers such as …. shallow waters”.^{(73) Admiralty Court, 65} Moreover, owners had a satisfactory Safety Management System pursuant to which the navigational practices of the crew were monitored and checked.^{(74) Teare (2023), p. 569} It could hence be argued that the owners had acted in accordance with standards and practices at the time, even in light of the Guidelines.

Errors in navigation at the commencement of the voyage are particularly difficult to reconcile with the “prudent owner test”. Navigational decision making is trustingly left in the hands of skilled navigators. Accordingly, some navigational errors are latent for everyone but the navigator making said error, until the error materializes into a casualty. As argued by counsel for Owners in CMA CGM Libra, “It would be invidious for an owner to have to second-guess the navigational decisions made by a master whenever the ship is about to leave port».^{(75) Libra [2021], 132} Owners are unable to control navigational decision making, beyond employing skilled navigators, supplying the vessel with updated navigational equipment and documentation, and ensuring good systems for navigational decision making. Hence, if an owner has done all it can to facilitate for good navigational decision making, it is understood that the owner is exempted from the resultant liability of navigational errors.

Trond Solvang, in his article titled, The relationship between nautical fault and initial unseaworthiness under the Hague-Visby Rules, reflected upon the Court of Appeal`s decision in CMA CGM Libra where he articulated the complexity involved in applying the prudent owner test in matters of initial seaworthiness due to navigational errors, “it appears formalistic to say that the test of unseaworthiness (that a prudent shipowner would not have let the ship sail with knowledge of the relevant facts) automatically resolves the question of liability for such unseaworthiness, if/when the failing task of a navigational nature constitutes the unseaworthiness. ”^{(76) Solvang (2020) p. 72} The Supreme Court, nevertheless, upheld the applicability of the prudent owner test in CMA CGM Libra, which inevitably resulted in a finding of unseaworthiness.