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Wednesday Law Report: Where `obligation in question' performed

7 July 1999

RPS Prodotti Siderurgici SRL and others v Owners and/or Demise Charterers of the ship or vessel `Sea Maas'

Queen's Bench Division, Admiralty Court (Mr Justice Rix) 10 June 1999

WHERE A charterer claimed for damage to cargo and the fundamental complaint was that a seaworthy vessel had never been provided by the shipowner the place of performance of the "obligation in question" within the terms of art 5(1) of the Brussels Convention was the port of loading.

The court held that in a claim for damage to cargo the charterers had succeeded in establishing jurisdiction in England.

The plaintiffs, Italian consignees of a cargo of steel coils carried on a voyage from Newport in Wales to Anzio and La Spezia in Italy on the vessel Sea Maas, claimed against the defendants, Dutch owners or demise charterers of the vessel, in respect of alleged wetting damage to the cargo.

The owners contended that the plaintiffs could not bring themselves within article 7 of the International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-going Ships 1952 and therefore failed to sustain jurisdiction in England unless they could bring themselves within article 5(1) of the Brussels Convention. Article 5 provided that:

A person domiciled in a Contracting State may, in another Contracting State, be sued: (1) in matters relating to a contract, in the courts for the place of performance of the obligation in question . . . (3) in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred . . .

The bills of lading, incorporated, inter alia, a General Paramount clause which incorporated the Hague-Visby Rules. On the front of the bills was the standard wording: "Shipped at the port of loading in apparent good order and condition on board the ocean vessel for carriage to the port of discharge or so near thereunto as she may safely get the goods specified above . . ."

The plaintiffs submitted that the principal "obligation in question" for the purposes of article 5(1) of the Convention was the obligation under article III, rule 1 of the Rules that: "The carrier shall be bound before and at the beginning of the voyage to exercise due diligence . . ." to make the ship seaworthy and the holds fit and safe for the cargo's reception, carriage and preservation and that that obligation had fallen to be performed at the port of loading, Newport, and that there was therefore jurisdiction in the courts of England and Wales.

The owners submitted that the obligation or principal obligation in question was the duty to deliver the goods carried under the bills of lading in the like good order and condition as when shipped and that the place of performance of that obligation was the discharge port, and that accordingly the plaintiffs had failed to establish jurisdiction in England.

David Bailey (Clyde & Co) for the plaintiffs; Timothy Hill (Bentley Stokes & Lowless) for the defendants.

Mr Justice Rix said that it was well established that the "obligation in question" had to reflect the contractual right on which the plaintiff's action was based. It was an error to characterise a damage to cargo claim under a bill of lading incorporating the Hague or Hague-Visby Rules as one based on an obligation to discharge goods in the same good order and condition as when loaded. To do that was to reflect the language of bailment, and the fundamental obligation under a Hague or Hague-Visby contract of carriage was not the obligation to keep and return (subject to proof that any loss or damage had occurred without fault) but the obligation to exercise due diligence.

It followed that everything would depend upon the nature of the claim of the holder of the bill of lading.

If the fundamental matter of complaint was that the shipowner had never provided a seaworthy vessel, the place of performance of the obligation in question would be at the port of loading. In the present case, the obligation in question was the obligation to exercise due diligence to provide a seaworthy ship at the commencement of the voyage and the plaintiffs were accordingly entitled on that ground to found jurisdiction in England.