2.3 A look to English law – the possible influence of the doctrine of seaworthiness by stages
English law is of relevance since the present topic lies within the ambit of the HVR with its overriding aim of achieving uniformity of the law.
Looking at English law, two main observations can be made. The first is that the English law solution is aimed at being rooted in the wording of the HVR, that is, in HVR art. III – an approach which is entirely absent from Norwegian/Nordic law, and which may, at least partly, be due to the HVR art. III having been “hidden” as part of the redrafting of the HVR into the MC.(1) Solvang (2021) ch. 3.4.The second observation is that the English law allowance for subsequent rectification of seaworthiness aspects, seems to be more restrictive (in favour of the cargo side) than is the main position under Nordic law.
In order to understand the English law position, it seems convenient to start with the English common law doctrine of seaworthiness by stages. Although that doctrine is set aside by the system of the HVR, it still plays a role in the English approach to construing the HVR.
The common law doctrine of seaworthiness by stages entailed a strict obligation of seaworthiness, not merely a due diligence obligation as in the HVR. Moreover, the “voyage”, in the common law sense, meant the planned (first) stage of the cargo voyage, not the cargo voyage as whole, as is the English law understanding of the system of the HVR. Such evaluation of seaworthiness by stages at common law could for example be assessed against the (first) stage when the ship reached an intended intermediate port for bunkering as part of the cargo voyage.
The English common law approach is illustrated by the leading case, the Newbrough(2)Northumbrian Shipping v. E. Timm & Sun [1939] A.C. 297.from 1939. The planned first stage was to sail from load port at Vancouver to an intermediate port at the Virgin Islands to bunker, and from there proceed on the cargo voyage to the UK. Upon sailing from Vancouver, the ship had insufficient bunkers on board to make it to the Virgin Islands. After passing the Panama Canal, she therefore had to deviate to Jamaica for bunkers. While sailing towards Jamaica the vessel grounded due to negligent navigation, and was lost.
The House of Lords held that the shipowner was not entitled to rely on any exception for negligent navigation, since the vessel was initially unseaworthy: the deficiency of bunkers constituted an increased risk of danger to the vessel and cargo, as assessed against how the voyage was planned at the time of departure from load port, i.e. to sail to the intended intermediate port at the Virgin Islands to bunker.
The “cause” of the damage in the Newbrough is considered attributable to the initial unseaworthiness, since without such unseaworthiness, no deviation for bunkering would have occurred, hence also no grounding during the course of such deviation. In that sense, the risk of any misfortune occurring during the course of deviation is imposed on the shipowner, in the sense that he forfeits what would otherwise be covered by liability exception for nautical fault.
That perspective is not foreign to Norwegian and Nordic law. If one asks the question: would a prudent shipowner have allowed the ship to sail with knowledge that she had insufficient bunkers to the intended port, and the answer is “no” (assessed at such earlier times when deviation would entail a significant additional risk), the same outcome probably would ensue. In that sense initial unseaworthiness would override a situation where the incident itself would fall squarely within the wording of a nautical fault exception. However, the situation of the Newbrough does not really belong to our category of cases reviewed above from Nordic law. In the Newbrough there was no question of rectifying a prima facie situation of unseaworthiness en route. The unseaworthiness was “irreparable”, in that the ship was incapable of reaching the intended port of loading.
It is worth noticing that the English doctrine of seaworthiness by stages has an aspect to the English contract law doctrine of deviation, which in turn forms part of the English law discussion of the phenomenon of “fundamental breach of contract”, which has no direct counterpart under Norwegian contract law.(3)See some comparative law aspects in Solvang, Sensur av ansvarsfraskrivelser: Har prinsippet i Wingull (ND 1979 side 231) satt spor etter seg? (‘censoring of liability exclusion clauses – has the principle laid down in the Wingull-case set its marks?’), Lov og Rett, 2009, pp. 27-42. Aspects of causation on a comparative law level are also discussed in Solvang, The English law doctrine of indemnity for compliance with a time charterer’s orders – does it exist under Norwegian law? SIMPLY/MarIus no. 419, 2013, pp. 11-28. Moreover, complex questions of causation on a comparative law level in the context of laytime and demurrage, are discussed in the monography, Solvang, Forsinkelse i havn – risikofordeling ved reisebefraktning (‘delay in port – risk allocation in voyage chartering’), Gyldendal, 2009.The doctrine of deviation is rooted in the notion that if the ship, through deliberate decision by the master or shipowner, deviates from the route contractually agreed with the merchant, then such deviation leads to an increased risk per se, which in turn means that whatever mishaps that may occur during the course of such deviation, are deemed to fall outside the ambit of contractual liability exclusions. In that sense the deviation (or other types of “fundamental breach”) are deemed to be the “cause” of the relevant mishap, by “transposing” the situation outside of the scheme of contractual protective remedies.(4)The matter involves a number of complicating aspects which are not addressed here, see e.g. Cooke et al, Voyage Charters, 3rdEd., 2007, pp. 251-267. The 3rdedition is here used, the relevant parts are identical in the 4thedition from 2014.
We then turn to how the HVR are considered under English law in relation to our question of “transforming” initial unseaworthiness into situations of nautical fault. As mentioned, the HVR are viewed as having the effect of setting aside the doctrine of seaworthiness by stages, in favour of a system whereby the upcoming voyage (the cargo voyage) is considered as a whole. However, the common law doctrine seems nevertheless to exert significant influence through the rigidity of perspective from which the HVR system is viewed.
Illustration can be found in various examples given by the authors of Cooke et al, Voyage Charters. It should be noted that the authors start out by giving weight to HVR art. III (which is an absent factor in the Norwegian discourse – as pointed out earlier). The authors take as an example intended bunkering during the course of a cargo voyage, while at the same time looking at the voyage as a whole. The authors state:
“Where matters of seaworthiness need to be attended to after the voyage has begun, such as taking on bunkers at a port of call in the ordinary way in order to complete the voyage, it is submitted that the shipowners are not in breach of their Article III rule 1 duty merely because the vessel does not have sufficient bunkers on board to complete the whole voyage at the beginning of that voyage, at least where a prudent owner would have done the same and, probably, where suitable arrangements for taking bunkers have been made.”(5) Cooke et al (2007) p. 973.
From a Norwegian perspective, this does appear a very cautious and in many ways unrealistic approach. It seems obvious that, in modern times where bunkering is planned as a matter of course and at the convenience of the shipowner, planned bunkering to be effected en route, would be entirely in order, not even being seen in the context of initial unseaworthiness. The example seems under English law to be a remnant of the common law doctrine of seaworthiness by stages, where older cases typically involved bunkering, but where bunkering practices have later changed.(6) The remarks in Cooke et al are at odds also with the views expressed by the authors elsewhere to the effect that in modern times deviation for bunkering at intermediate ports is seen as more or less a matter of course, see Cooke et al (2007) pp. 252-253.
From there, the authors go on to state:
“In such a case, if, through subsequent fault of servants or agents, the vessel does not in fact take on sufficient bunkers at the port of call and loss or damage results, the shipowners are not in breach of their Article III rule 1 obligations so long at least as it is not attributable to a prior failure to make proper arrangements.”(7) Cooke et al (2007) p. 973.
From a Norwegian perspective, one would be tempted to ask: what other solution could there be? If the fact of planning to bunker en route is not a matter of unseaworthiness, and if faults made in connection with such bunkering occur due to taking on insufficient bunkers, and if later deviation ensues for the purpose of replenishing bunker, and if an accident then happens during the course of such later deviation, it is hard to see how this accident could in any way be traced back to initial unseaworthiness.
Again, the English thinking seems to be rooted in the earlier doctrine of seaworthiness by stages. This also applies to the reservation by the authors that the taking on of insufficient bunkers en route is a result of lack of planning. With the ordinary seaworthiness test being applied: if at the commencement of the voyage there is some lack of planning of how much bunkers the ship shall take on board at an intermediate port of bunkering – would a prudent shipowner then have disallowed the ship to sail with knowledge of such facts? The answer seems to be no. From a Norwegian perspective, this example would probably therefore not fall within the category of rectifying initial seaworthiness deficiencies subsequent to departure.
The authors then state, in direct continuation of the above:
“They [shipowners] may also be protected by the exception In Article IV rule 2(a), should it be necessary for them to rely on an exception, as, for example, when there is loss or damage to the goods, as opposed to liability in salvage for example. There may, however, be other subsequent faults by those servants which will cause the carriers to be liable under Article III rule 2 [which imposes a duty of care for the cargo] or because they evidence a failure ‘properly to man the ship’.”(8) Ibid.
These remarks make good sense, since they go to the very point of such subsequent fault (i.e. fault in management of the ship for bunkering, which in turn may end up in “deviation” leading to navigational fault being committed) – all of this being considered within the ambit of HVR art. IV 2(a). These remarks also make good sense in terms of the general notion that, in given cases, the subsequent fault may relate to caring for the cargo and for that reason would not qualify as nautical fault(9) See Solvang (2021) ch. 3.1.– or it may be a reflection of incompetence by the crew, in which case we are back to the topic of initial unseaworthiness, as e.g. argued by the cargo side in the Norwegian Sunny Lady, namely that the crew was incompetent in not having learned the correct way of replenishing domestic water into the right pipe.
Then, finally, we reach examples that are familiar to the Norwegian discussion. The authors state in direct continuation of the above quote:
“On the other hand, the abandonment of the doctrine of stages may well mean that in other respects, e.g., in the case of loading at a river port, a vessel needs to be seaworthy for an ocean passage, and due diligence exercised accordingly, at an earlier time than under the common law. This does not cause any particular injustice because of the abandonment of the absolute undertaking of seaworthiness and also, so long as the shipowners remedy the unseaworthiness at a stage which would have been proper in the context of the doctrine of stages, it should not be causative of any loss or damage.”(10) Ibid (my emphasis).
The latter part of the quote, concerning lack of causation, is from a Nordic perspective trite: if it is prudent to remedy a seaworthiness defect subsequently and it is so remedied, then there can be no question of liability for a subsequent event leading to cargo damage, since ex hypothesis there is no breach of any obligation which caused the cargo damage.
There seems however to be one difference between the Nordic and English approaches. Under Nordic law, if there is a prudently planned remedial act to an initial deficiency, the thinking is that the obligation to exercise due diligence at the time of departure is fulfilled through such prudently planned remedial act. Hence, a subsequent failure to do the remedial act would be considered a nautical fault occurring during the voyage, thus exempting the shipowner from liability – see the account given above.
This type of thinking seems however to be foreign to English law. There the test of seaworthiness seems to be assessed against the voyage as a whole (which in itself is also the case under Norwegian law), and if matters are attended to after departure but the remedial acts fail, then this seems to be viewed as matters of initial unseaworthiness having been committed retroactively (as it were) – and with no legal basis for categorizing them as nautical fault.
That point is important since it has to do with the construction and application of the HVR. Matters of initial seaworthiness are governed by HVR art. III 1, and there is no basis in the HVR for having art. IV and nautical fault “taking over” in such situations of breach of art. III 1.(11) This is a different topic than that dealt with in Solvang (2021) ch. 4.3. There the point was that certain nautical faults already occurring before departure might not entail breach of HVR art. III 1.This is the problematic part in the thinking of the Nordic cases allowing for subsequent unseaworthiness failure to be “transformed” into nautical fault – and it may be another example of how the HVR art. III 1 seems to have been neglected under Nordic law, probably because of the way the MC has been drafted.(12) Solvang (2021) ch. 3.1.
Therefore, as a matter of construction of the HVR, and as a matter of international uniform application, it seems that the Nordic law position should at least go no further than those principles allowing for subsequent rectification as suggested in the previous section. In other words, those principles as reflected in the Swedish Supreme Court decision Pagensand seem to be sound, while those derived from the Norwegian Supreme Court case URD II seem not to be, in the context of the HVR.