The Principals of Maritime Law regarding the scope of carrier responsibility
Judgment issued by Dubai Court of Cassation
The claimant in this judgement was an Insurance company. The claimant filed the case against the shipping line instead of the insured. The insured received the full payment from the claimant under insurance policy. The insurance company, as subrogee, submitted their claim to the Dubai Court of First Instance claiming an amount of 226,560,00AED. This represented the value of the cargo plus 9% interest, being shipped under Bill of Lading covering 4 containers from Italian port to Dubai port. When the vessel arrived at Dubai port, and the cargo was delivered, the consignee discovered that the cargo was partially damaged and informed the carrier's agent. As survey was carried out and conducted and a surveyor's report stated that the damage of the cargo was mainly due to leakage of sweet water in the containers, causing partial damage to the cargo.
The vessel's agent was issued a letter calling for conciliation. The claimant, under the subrogation arrangement, already paid the full amount to the insured and refused the offer. The claimant based this claim on carrier's responsibility for the whole voyage from receipt of the cargo at the port of loading to the complete delivery at the port of destination. The defendant refused to pay the claimant and accordingly the claimant lodged a claim.
The court appointed a surveyor who was entrusted with this task and submitted a report of the findings.
The Court of First Instance refused the claim. Its judgement was based on the surveyor's report stating that the damage incurred to the cargo was slight, partial and insignificant and would not change the cargo's form or shape. Compensation was to be paid at a percentage equal to the actual damage mentioned in the report. It was stated that there was no difference whether the water was sweet or salty.
The claimant was not convinced or satisfied with the decision and did not accept the quotient and lodged the appeal to the Court of Appeal. The Court of Appeal confirmed and ratified the Decision of Court of First Instance. The claimant was compelled and left with no alternative other than to have recourse to the Court of Cassation. The claimant based his claim on the ground that the decision of the Court of Appeal was at fault with law application and contained violation of law and rotten inference.
The Court of Cassation after reviewing the case and arguments, took into consideration the agreed and applicable principals and practice in this court, and stated that according to article (272) subparagraph (1) and (2) of the Maritime Commercial Law, that the carrier had responsibility to use the necessary care to put the vessel in a seaworthy condition and to fit it out, man it and provision it properly.
The court stated that the carrier must also use the necessary care in loading, stowing, stacking, arranging, carrying, protecting, discharging and delivering the goods. The carrier would not be relieved of responsibility towards any damaged cargo in the containers unless it was proved that the shipper who per formed the stuffing, stacking, arranging, and stowing of the cargo was soley responsible.
The Court of Cassation stated that the legislator imposed a legal presumption based on assumption that the cargo was safe and in good condition unless the carrier managed to prove that the damage to the cargo was only due to reasons mentioned in article (275) of Maritime Commercial Law.
The Court of Cassation stated that the Court of Appeal has authority to derive its notion based on understanding of the facts contained in the case. The Court can compare arguments and decide on the preponderance of proof and evidences.
This is part of the judicial authority of the judge but this authority should be based on justifiable, judicious, acceptable and sufficient reasons enabling the Court of Cassation to supervise the decision.
If the Court of Appeal fails to show its capacity to issue precise and lucid judgement as required by law or if it presents vague, imprecise, obscure judgements which hamper the Court of Cassation from supervising the judgments to ensure compliance with the correct law application and practice, then the decision will be subject to nullification and refute by Court of Cassation.
The decision of the Court of Appeal stated among its justifications that one of the reasons for the damage was attributed to condensation inside the container affecting the state of the cargo and causing folding of the items inside the container and slight damage. Having no evidence or sufficient explanations on whether the damage was merely due to cargo stowage or stuffing and whether the stowing itself caused the condensation, is not acceptable by the Court of Cassation. The decision of the Court of Appeal also relieved the carrier from any responsibility towards the damage compensation, and based its decision on a letter of the Custom Department which stated that the containers containing the cargo were found dry and only slight rust covered the containers and not the cargo.
The letter also stated that the containers were under the lower hatch of the vessel which means it is difficult to assume that the containers were exposed to the rain or sea water. The containers were in a safe place in the vessel. This was in contradiction with expert reports proving that two holes had been noticed and were caused by an accident.
The judgement of the Court of Appeal contained insufficient justification regarding the cause of the damage.
It failed to refute or contest the legal assumption of law that the carrier was under a legal obligation to prove that the stuffing was solely carried out and performed by the shipper and not by the carrier. It failed to refute the carrier's responsibility to prove that necessary care was taken in loading, stowing, stacking, arranging carrying, protecting, discharging and delivering the cargo and the required proof that the damage was solely due to reasons being mentioned and contained in article (275).
The Court of Cassation, after review and consideration, found that the justifications and reasons of the Court of Appeal were not sufficient. It could not submit a practical, operational justification and defense to convince the Court of Cassation of its explanations.
Therefore, after reviewing and examining the defense of the carrier (defendant) the Court of Cassation stated that thr carrier showed an inability to prove his case or provide an acceptable and sensible explanation.
The Court of Cassation reached the conclusions that the Judgement of the Court of Appeal is vulnerable and can not be vindicated and accordingly should be considered null and void.
By Ghazi Bahajaj Maritime, Aviation & Insurance Depar tment
© Al Tamimi & Company 2008
