Shipowner cannot be held responsible for cargo damage caused by stevedores

UK court has ruled that a shipowner cannot be held responsible for cargo damage caused by stevedores, in a potentially significant ruling for charterers. The high court said that Russian metal trader Yuzhny Zavod Metall Profil had no claim against Dutch shipping company Eems Beheerder.
Dispute arose from a cargo of 411 steel coils loaded on to the 2,600–dwt Eems Solar (built 2010) and delivered to Novorossiysk in Russia with varying degrees of damage.
Charles Smith of law firm Clyde & Co said the shipowner cited a clause in the Gencon 1994 charter contract included in the bill of lading that states the cargo was to be loaded "by the charterers, free of any risk, liability or expense whatsoever" and owners were only to be liable for "want of due diligence."
Charterer had appointed stevedores to load the cargo but their failure to use locking coils meant the stow was not appropriate.
Master was not satisfied with stowage but decided to sail regardless. During the voyage, the vessel experienced heavy weather which led to a strap breaking and a shift in the cargo; the crew were unable to secure the shifted cargo for lack of additional lashing straps, resulting in damage to a number of coils, Smith said.
The judge concluded that the sole effective cause of damage to the cargo was the vessel not being properly loaded and stowed when it left the port.
Court noted: "Where the responsibility for the stowage has been contractually passed from the shipowner to the charterer (or the cargo owner) the shipowner will not be liable for damage arising from improper stowage even if it renders the vessel unseaworthy, unless it is established that the bad stowage leading to the damage arose from a significant intervention by the shipowners or their master". Smith said the case illustrates the protection afforded to owners by the incorporation of charter-party clauses into the bill of lading.
He added the decision also raises a number of questions that may cause difficulties in future cases. “For example, where the bill of lading is in the hands of a third party receiver, it raises the possibility of indemnity proceedings against charterers (as being the party responsible for the stowage),” he said.
“Such claims could be very significant where, for example, stowage issues resulted in the loss of vessel and cargo.”