MarIus

2.1 The case

In January 2007 the Sunna grounded, close to the Orkneys, on its way from Iceland to England with a cargo of 1,900 tons of ferro-silicon. In violation of the prevailing safety rules requiring double watch keeping during night time sailing, only one person was on watch during the night of the incident. This person, the second mate, fell asleep. About one hour later the vessel grounded after having deviated from its plotted autopilot course, due to a side current. The cargo damage amounted to about NOK 280,000 for which the cargo interest claimed damages. The shipowner on the other hand claimed general average contribution from the cargo interest of about NOK 865,000 to cover the costs arising from salvage operation following the grounding.(1) Norwegian law was made applicable by reason of the claims being raised under tramp bills of lading, ref. MC s. 347.

Part of the facts of the case was that a few months earlier the vessel had been subjected to sanctions by the Dutch Port State Control, i.a. due to non-compliance with the double watch-keeping rules, as revealed from inspection of the vessel's logbook. Following this sanctioning, the shipowner had taken some corrective measures, including that of arranging a meeting with the master and the second mate addressing the irregularities identified by the Port State Control. The master, however, persisted in his defiance of the rules, as evidenced by the later grounding.

Before the courts it was not in dispute that the second mate's falling asleep constituted nautical fault which, as such, would exempt the shipowner from liability. The more difficult issue was how to categorise the master's practice of non-compliance with the watch-keeping rules, considered to be the proximate cause of the grounding: had these rules been complied with, the incident would in all likelihood not have occurred, since two persons on the bridge would not both have fallen asleep.

The City Court(2) Judgment of 06.06.2009 by Oslo City Court: 08-183359TVI-OTIR/04. held in the favour of the cargo interest on the basis of privity on the shipowner's part: The shipowner had not demonstrated that - following the irregularities revealed by the earlier Port State Control - sufficient steps had been taken to ensure that the double watch-keeping requirement would be complied with. In other words, since there was privity on the shipowner's part, whatever the nautical fault by the master which otherwise might exempt the shipowner from liability, it was overridden by such privity.

The Court of Appeal(3) Judgment of 15.11.2010 by Borgarting Court of Appeal: 09-140485ASD-BORG/01. held in favour of the shipowner, on a combination of the following:

First, there was insufficient basis for establishing privity on the shipowner's part as the corrective measures following the shortcomings revealed by the Port State Control were considered to have been appropriate. In this respect the Court pointed to various steps having been taken by the shipowner, such as the issuing of a non-conformity notice to its officers highlighting the duty of safety rule compliance. Moreover, the entirety of the situation had to be seen within the context of it being obvious that such rules must be complied with; the master and officers onboard the ship clearly knew this, not least from being sanctioned by the Dutch Port Authorities.

Second, the master's failure to insist on double watch keeping during the night of the incident constituted nautical fault which as such exempted the shipowner from liability.

Third, there was no initial seaworthiness capable of overriding such exemption from liability, since when the vessel departed from load port, there was sufficient manning on the bridge (also during night time; the insufficient manning happened two nights later), with the vessel in itself being fully seaworthy and with officers and crew being sufficient in number and generally competent. In other words, the fact that the master later - on the night of the incident - decided not to comply with the double watch requirement, was considered to have an insufficient nexus back to the master's state of mind at the time of departure from load port. In other words, it did not constitute initial unseaworthiness. And even if it were to be so considered, it could easily have been remedied after departure, as evidenced by the fact that the lookout requirement was complied with the first two nights following departure from the load port.

The Supreme Court took a different approach from the lower courts. The Supreme Court found it unnecessary to go into the question of privity on the part of the shipowner. Instead, the Court found against the shipowner on the basis of initial unseaworthiness. The reasoning was that the master's non-compliant attitude towards the safety rules was a state of affairs already existing at the beginning of the voyage, as combined with the fact that at such time the vessel did not have in place a rule compliant bridge management plan for the upcoming voyage. In other words, this non-compliant bridge management plan brought about by the master, combined with the fact that there was no indication that the master intended to change his attitude and comply with the rules during the upcoming voyage, made the ship unseaworthy at the beginning of the voyage.

Moreover, although the shipowner was subject to a mere due diligence obligation to ensure that the vessel was seaworthy at the beginning of the voyage, the shipowner was in this respect vicariously liable for the acts of its employees, including the master. The master's non-compliant attitude was in this case clearly negligent (in fact wilful), hence the shipowner was held vicariously liable for the vessel's initial unseaworthiness through the master's fault. Furthermore, based on such finding of liability for initial unseaworthiness, there was no need to go into the question of whether the conduct of the master constituted nautical fault, since the requirement for initial seaworthiness and its ensuing liability, would override any otherwise applicable nautical fault exception.