1. General principles
Before dealing with the Court’s attitude to Section 4 subsection 2, a few remarks are required on what the more general contract law principles appear to entail.
The subcontractor Lode fastened the drum to the trailer, no doubt with knowledge that the trailer should be moved to Sea-Cargo’s terminal and then on board a vessel. Whether the drum was securely fastened for road carriage may –based on the facts given in the judgment – be questioned. It is beyond doubt that it was not secured for a sea voyage at that time of the year – bad weather in the North Sea mid-November should come as no surprise. It may be argued, given the fact that the trailer was due to undertake a sea voyage, that securing for the first road carriage was not sufficient to fulfil the safety obligation, or if this should be considered differently, that there was at least an obligation to inform the vessel that the drum was secured for road transport only. The errors of a subcontractor are attributed to the contractor – here Pentagon, and Pentagon in turn is the subcontractor of KN. I add, if one should find that Lode was not to be blamed, that this is not decisive as then the focus is turned against Pentagon, who had instructed Lode and should have given the relevant information to the ship, and Pentagon was the “servant” of KN.
There were also, undoubtedly, errors committed on board the vessel: Simply securing the trailer was not enough to meet the obligations set down in the Maritime Code Section 262. Then we have the difficult question:
was the error on board the vessel sufficient to cause the damage?, or
was it a true case of “contributory damage” – was the damage dependent upon the combined effect of Lode’s error and the vessel’s error?
As for (ii), there is a regulation in the Maritime Code Section 275 subsection 3:
“If damage is caused partly by negligence of the carrier (or his servants or agents) and partly by something else (e.g. intervention by a third party, it is necessary to determine the extent to which the damage or loss can be traced to the carrier. There is an important rule on evidence in this connection. It is for the carrier to prove the extent to which the damage was not caused by his fault or neglect” (Falkanger, Bull & Brautaset, Scandinavian Maritime Law (4th ed. 2017) pp. 361–362).
Summing up:
These considerations are clearly of relevance when we have recourse claims between the contractors on the transport side, but what do they lead to regarding the cargo owner’s claim against KN, given the Court’s conclusion that the Road Carriage Act is applicable in this respect? Under this Act KN is obviously responsible. It is sufficient to point to the errors committed by the subcontractors. The crucial question is whether these errors can be characterised as “gross negligence”, with the consequence that the right of loss limitation cannot be invoked, cf. the Maritime Code Section 283.