LAW REPORT: 27 JANUARY 1998; Shipper is strictly liable for dangerous cargo

A shipper of dangerous cargo was strictly liable to the carrier for damage caused by the cargo, regardless of the absence of fault or neglect on its part, and the danger need not be direct.

Effort Shipping Co Ltd v Linden Management SA and ors (the Giannis N K); House of Lords (Lord Goff of Chieveley, Lord Lloyd of Berwick, Lord Steyn, Lord Cooke of Thorndon and Lord Clyde) 22 January 1998

The House of Lords upheld the decision of the Court of Appeal, dismissing the appellant shipper's appeal against a finding that it was liable to the respondent carrier for delay caused by the shipment of dangerous goods.

Under a bill of lading incorporating the Hague Rules a cargo of groundnut extractions was loaded in the carrier's vessel the Giannis N K, to be shipped to Rio Haina in the Dominican Republic. At the time of shipment the cargo was infested with khapra beetles, although neither the shipper nor the carrier knew. A cargo of wheat pellets had previously been loaded for carriage to San Juan, Puerto Rico and Rio Haina. There was no danger of the beetle infestation's spreading from the groundnut cargo to the wheat cargo, but the infestation nevertheless rendered the vessel and its entire cargo subject to exclusion from the countries where the cargo was to be discharged.

The vessel was quarantined and fumigated at Rio Haina, but the insects were not eradicated. The vessel was ordered to leave port with all her cargo. She had, meanwhile, been arrested by receivers, but was able to leave port when the arrest was lifted on an undertaking. She returned to San Juan in an attempt to find a purchaser for the cargo but the United States authorities issued a notice requiring the carrier to return the cargo to its country of origin, or to dump it at sea. The cargo was dumped at sea in February 1991. After further fumigation, the vessel was cleared to load her next charter after a delay of two and a half months.

David Johnson QC and Edmund Broadbent (Richards Butler) for the shipper; Alistair Schaff (Bentley Stokes & Lowless) for the carrier.

Lord Lloyd said that the carrier claimed to be entitled to damages under Article IV, rule 6 of the Hague Rules, which provided that all damages and expenses directly arising out of the shipment of goods of "an inflammable, explosive or dangerous nature", to which the carrier had not knowingly consented, should be borne by the shipper.

The carrier had argued that a "dangerous" cargo included one which was physically dangerous to other cargo. The shipper had maintained that cargo was only dangerous within the meaning of Article IV rule 6 if it caused direct physical damage. The carrier's argument was, however, to be preferred.

Although prima facie liable to the carrier, the shipper claimed that its liability was limited by Article IV rule 3 of the Hague Rules, which provided that a shipper should only be liable for loss sustained by the ship or the carrier in case of some fault or neglect on its part. However, Article IV rule 6 imposed strict liablity on shippers in relation to the shipment of dangerous goods, irrespective of fault or neglect on their part.

The shipper had argued that, even if it were otherwise liable to the carrier, that liability had been divested when the property in the groundnuts had passed to the receivers by endorsement of the bill of lading. Whilst it was true that under section 1 of the Bills of Lading Act 1855 all rights passed to the holder of the bill on endorsement, the liabilities were not transferred: the holder of the bill became subject to the same liabilities as the shipper, by way of addition, not substitution. The 1855 Act had now been repealed, and the point at issue was now expressly covered by section 3(3) of the Carriage of Goods by Sea Act 1992.

- Kate O'Hanlon, Barrister

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Digital Marketing Consultant

£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...

Recruitment Genius: Assistant Stores Keeper

£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Software Developer - C# / ASP.NET / SQL

£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk