3 Seaworthiness
Before examining the CMA CGM Libra judgement, it is useful to provide some context regarding the carrier’s legal obligation to provide a seaworthy ship. At common law, it is an implied term of a contract for the carriage of goods by sea that the carrier will ensure that the ship is seaworthy.(1) Rogers (2020), p. 72 Initially, seaworthiness was understood as a duty to provide a vessel that was “tight and fit for the purpose or employment for which he (the shipowner) offers and holds it forth to the public”.(2) Ping-Fat (2002) with reference to Lyon v Mells (1804) 5 East 428, 102 ER 1134 at 1137 per Lord Ellenborough The doctrine of seaworthiness has since developed and has proved itself difficult to define. As held by Cresswell J in the Eurasian Dream, “seaworthiness is not an absolute concept; it is relative to the nature of the ship, to the particular voyage and even to the particular stage of the voyage on which the ship is engaged…”(3) Rogers (2020), p. 73 with reference to Papera Traders Co Ltd v Hyundai Merchant Marine Co Ltd (The Eurasian Dream) [2002] 1 Lloyd’s Rep 719, para 126 Caselaw reveals that seaworthiness may be concerned with trivial as well as serious failing, including for example a defective propeller, contaminated fuel or the incompetence of the crew.(4) Rogers, p. 74 with reference to SNIA v Suzuki (1924) 29 Com Cas 284, The Makedonia [1962] and the Eurasian Dream Thus, there is no definitive definition of seaworthiness.
The common law undertaking of seaworthiness is understood as absolute: “it is not merely that they (the shipowner) should do their best to make the ship fit, but that the ship should really be fit”(5) Bennett (2017), at 3-074 During the first part of the 19th century, it became increasingly normal practice for the carrier, who enjoyed strong bargaining power and the freedom of contract, to include extensive exclusion clauses in bills of ladings, which effectively altered the carrier`s common law undertaking of seaworthiness.(6) Rogers (2020), p. 389 This resulted in discontented shippers who expressed that the only freedom of contract they enjoyed was to ship on terms dictated by the carrier, or not ship at all.(7) ibid Thus, the need for an international uniform regime to regulate maritime trade and to balance the significantly stronger bargaining power of carriers against that of shippers was recognized.
In 1921, representatives of leading shipowners, underwriters, shippers and bankers of the major maritime nations managed to agree on a set of rules, which were drafted by the Maritime Law Committee of the International Law Association at a meeting held at the Hague, which became known as the Hague Rules.(8) ibid The rules were not immediately adopted, and were subject to subsequent amendments, before they were finally adopted by the most important trading nations, through signature of the International Convention for the Unification of Certain Rules of Law relating to Bills of Lading ("Hague Rules") in 1924.(9) ibid The convention was successively amended by the Visby Protocol in 1968 and the SDR unit Protocol in 1979, collectively referred to as the Hague-Visby Rules.(10) Djadjev (2017), p. 31 The Hague-Visby Rules introduced slight changes but did not radically modify the compromise that had been reached between the interest of carriers and shippers in 1924.(11) Rogers (2020), p. 390 The Hague/Hague-Visby Rules have since been ratified by more than 95 states globally and where not compulsorily applicable, they are often incorporated by contract into bills of ladings, charterparties and other contracts of affreightment through a clause paramount.(12)Libra [2021], 1
Importantly, the Hague Rules altered the “absolute” undertaking of seaworthiness under common law, replacing it with a duty to exercise due diligence before and at the beginning of the voyage to make the vessel seaworthy, per article III r.1.(13) Hague Rules (1924), article III, r. 1 In contrast to the common law undertaking of seaworthiness, the carrier cannot contract out of the Hague Rules duty to exercise due diligence to make the vessel seaworthy. It is hence held to be an “inescapable” duty. The very meaning of the seaworthiness obligation under the Hague Rules is a central issue analyzed in the CMA CGM Libra Judgement, as will be explored in the following chapters.