cargo risks: "dangerous" goods

Editorial Committee of the Cambridge Law Journal

Cargo Risks: "Dangerous" GoodsAuthor(s): F. D. RoseSource: The Cambridge Law Journal, Vol. 55, No. 3 (Nov., 1996), pp. 601-613Published by: Cambridge University Press on behalf of Editorial Committee of the Cambridge LawJournalStable URL: http://www.jstor.org/stable/4508254 .

Accessed: 13/06/2014 07:07

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

Cambridge University Press and Editorial Committee of the Cambridge Law Journal are collaborating withJSTOR to digitize, preserve and extend access to The Cambridge Law Journal.

http://www.jstor.org

This content downloaded from 185.2.32.141 on Fri, 13 Jun 2014 07:07:19 AMAll use subject to JSTOR Terms and Conditions

http://www.jstor.org/action/showPublisher?publisherCode=cup

http://www.jstor.org/action/showPublisher?publisherCode=ecclj

http://www.jstor.org/action/showPublisher?publisherCode=ecclj

http://www.jstor.org/stable/4508254?origin=JSTOR-pdf

http://www.jstor.org/page/info/about/policies/terms.jsp


Cambridge Law Journal, 55(3), November 1996, pp. 601-613 Printed in Great Britain

CARGO RISKS: "DANGEROUS" GOODS

F.D. Rose*

A shipper does not have unlimited freedom as to what he may have

transported by sea.1 Restrictions on the goods which a charterer or

cargo-owner may ship are imposed by the common law,2 the terms of

the contract and statute. The statutory sources of control of what are

normally referred to as dangerous goods may be divided into three

categories: those under the Hague-Visby Rules3 (principally art.

IV(6)); those under the Merchant Shipping Act 1995; and other legal sources. Provision is also made by the Hamburg Rules.4 Where a

prohibition against the shipment of goods is not laid down by an

express contractual obligation or specific rule of law, it is likely to be

treated as depending on an implied term or collateral warranty.5 These restrictions are commonly elided into a general proposition

that a person sending goods by sea must not ship dangerous goods. Yet it is the case that dangerous goods are often shipped, and

legitimately so; and the carrier should discharge his normal duties in

respect of whatever cargo he has agreed to carry. The real issues,

therefore, as demonstrated by the authorities, are to identify what

risks are involved in the carriage of the cargo in question, how these

risks are allocated between the parties and (whether or not as a

question of breach of contract) what are the consequences of shipping

dangerous goods.

I. Type of Cargo and Loss

The type of cargo under consideration includes both cargo which is

physically dangerous and that which is only "legally" dangerous, in

Professor of Commercial and Common Law, University of Buckingham. See, e.g., P.E. King, "The Carriage of Dangerous and Nuclear Cargoes" (1986) 14 A.B.L.R. 86; L.C Bulow, "'Dangerous' Cargoes: The Responsibilities and Liabilities of the Various Parties" [1989] L.M.C.L.Q. 342 (an American viewpoint). See also S.D. Girvin, "Shippers' Liability for the Carriage of Dangerous Cargoes by Sea" [1996] L.M.C.L.Q. 487. Independently of contract, a defendant may be liable for the tort of negligence: Losinjska Plovidba v. Transco Overseas Ltd (The Orjula) [1995] 2 Lloyd's Rep. 395; Tettenborn [1996] L.M.C.L.Q. 6; Farrant v. Barnes (1862) 11 C.B.(N.S.) 553; Bamfieldv. Goole & Sheffield Transport Co. Ltd. [1910] 2 K.B. 94, 104-105; The Athanasia Comninos [1990] 1 Lloyd's Rep. 277, 282. See Carriage of Goods by Sea Act 1971, Sched. United Nations Convention on the Carriage of Goods by Sea 1978. See The Amphion [1991] 2 Lloyd's Rep. 101, 105 (Evans J.).

601



602 The Cambridge Law Journal [1996]

the sense that it may cause a loss other than a physical loss, e.g. one

from detention or delay.6 However, the common use of adjectives such

as "dangerous" or "hazardous" to describe such goods does not mean

that the risks presented by them need be extreme or that there is one

single category of dangerous goods attracting a uniformly applicable set of consequences. In each case, the questions to be considered are

whether the carrier has consented to an extraordinary risk presented

by the cargo and, even if so, whether the law sanctions dealing with

the cargo to avoid the consequences of the relevant risk.

At common law, the relevant subject-matter is goods which, because of their inherent nature or packing, are capable of causing loss to the carrier or third parties (such as other cargo-owners or

charterers7). It includes goods which are capable of causing either

physical or economic loss: e.g. damage to the carrying vessel by fire, loss resulting from infection or infestation, damage to other cargo by

seepage (even where a shipowner, ignorantly carrying such goods, is

not liable to the third party), and loss from detention and delay. The

goods themselves may be patently hazardous or may be generally innocuous but give rise to dangers because the circumstances of

carriage provide the opportunity for risks to materialise (e.g. because

of sweating). The risk may be one which the carrier has not accepted because it is ofa different kind or degree (approximating to a difference in kind) from that which he has accepted or has been concealed by false information.8

The Hague-Visby Rules' provision for hazardous goods applies to

"Goods of an inflammable, explosive or dangerous nature".9 These have been held to be goods that either actually cause physical damage or which pose a threat of physical damage to some object other than

themselves; and include goods which are subject to the physical peril of being dumped because the actual or likely refusal of port authorities to permit their unloading in practice deprives the carrier of a realistic

opportunity to do so, as well as goods which are similarly liable to

give rise to loss of other cargo shipped on the same vessel.10

"Dangerous goods" are not defined by the Hamburg Rules.

' Mitchell, Cotts & Co. v. Steel Bros. & Co. Ltd. [1916] 2 K.B. 610; Effort Shipping Co. Ltd. v. Linden Management Co. S.A. (The Giannis NK) [1996] 1 Lloyd's Rep. 577, 588. Cf Owners of Spanish SS Sebastian v. De Vizcaya [1920] 2 K.B. 332; The Domald [1920] P. 56. Or the shipowner, if the legal carrier is not the shipowner. 1 Atlantic Oil Carriers Ltd. v. British Petroleum Co. Ltd. (The Atlantic Duchess) [1957] 2 Lloyd's Rep. 55. 95-96, per Pearson J.; Micada CN. S.A. v. Texim (The Agios Nicolas) [1968] 2 Lloyd's Rep. 57; The Athanasia Comninos [1990] I Lloyd's Rep. 277, 283 (Mustill J.). Cf Brass v. Maitland (1856) 6 E. & B. 470, 487, per Lord Campbell C.J.; Acatos v. Burns (1878) 3 Ex.D. 282; Greenshields, Cowie <ft Co. v. Stephens & Sons [1908] 1 K.B. 51, 61-62, per Kennedy L.J., [1908] A.C. 432, 436, per Lord Halsbury L.C.; Bamfieldv. Goole & Sheffield Transport Co. [1910] 2 K.B. 94, 109, per Fletcher Moulton L.J. Art. IV(6). The Giannis NK [1994] 2 Lloyd's Rep. 171; aflfd [1996] 1 Lloyd's Rep. 577.




form and marine pollutants in packaged form.22 "Dangerous goods" are those classified in IMO Codes referred to in the Regulations, such

as the International Maritime Dangerous Goods (IMDG) Code,23 as

dangerous for carriage by sea, and any other substance or goods the

properties of which might be dangerous if that substance or those

goods were carried by sea.24 "Marine pollutant" means a substance

which presents a hazard to the marine environment and is identified

in the IMDG Code as a marine pollutant.25 Common law or contractual provisions must obviously give way to

overlapping statutory provisions and in any event it may well be

preferable in practice to base a claim on a statutory ground, whether it is

brought by a carrier suing under the Hague-Visby Rules or a third party

suing for breach of statutory duty. But, where the statutory provision is

inapplicable, the common law will continue to apply (e.g., a shipper under a contract governed by the Hague-Visby Rules of goods which are

not dangerous according to those Rules will still be liable for shipping

goods which are "legally" dangerous at common law).26

II. General Principles and Shipper's Duties

A shipper is not restricted to shipping only goods which carry no risk

at all, for all goods present some risk.27 Responsibility for such risks

(e.g., for losses arising from "inherent vice") or for avoiding or

minimising their consequences may of course fall on a shipper or

charterer, who may therefore be liable for losses suffered by the carrier

or third parties as a result of the shipment of such goods.28 Otherwise, it is the carrier's duty to provide a ship which is seaworthy (which includes the duty to ensure that it is fit for the contract cargo);29 also

it is a normal part of a carrier's duties to take appropriate measures

to avoid loss resulting from risks of which he is or should be aware,

and he assumes all risks of accidents attributable to a failure to carry in that manner.30 The question, therefore, is not simply whether goods are "safe" or "dangerous" but how the risks arising from carriage of

the relevant goods are distributed by the contract. The familiar and

22 Reg. 2. 23 See above, n.21. 24 See Reg. 1(3). 25 Reg. 1(3). 26 The Giannis NK [1996] 1 Lloyd's Rep. 577, per curiam. 27 See e.g.. The Berge Sund (1992] 1 Lloyd's Rep. 460 (implied term in charterparty not to ship

dangerous goods). 28 See, e.g, The Amphion [1991] 2 Lloyd's Rep. 101. 29 See Scrutton on Charterparties and Bills of Lading, 19th ed. (1984) [hereafter "Scrutton"], pp. 82-

90, 433-435, and authorities there cited. 30 The Athanasia Comninos [1990] 1 Lloyd's Rep. 277, 283,per Mustill J. See also The Iron Gippsland

[1994] 1 Lloyd's Rep. 335 (N.S.W. S.C.).



C.L.J. Dangerous Goods 605

convenient, but deceptive, expression "dangerous goods" must be so

understood.

The general principle appears to be that a shipper is only entitled

to ship goods which are susceptible to ordinary risks or risks of which

the carrier has or ought reasonably to have notice, and the shipper must accept the consequences where the carrier has not consented to

the risk in question or where the law otherwise provides.31 Otherwise, the cargo fails outside the contractual description and the shipper commits a breach.32 It is a question of fact whether the goods shipped

comply with the contractual description.33 The common law duties against shipping dangerous goods are

assumed to apply to carriage governed by the Hague-Visby Rules, which do not specifically impose duties against such shipment but

provide consequences for it.34

The Hamburg Rules, however, state that the shipper must mark or

label dangerous goods in a suitable manner as dangerous.35 Where the

shipper hands over dangerous goods to the carrier or an actual carrier, as the case may be, the shipper must inform him of the dangerous character of the goods and, if necessary, of the precautions to be

taken.36 The bill of lading must include an express statement, if

applicable, as to the dangerous character of the goods, as furnished by the shipper.37

Safety regulations under the Merchant Shipping Act 1995 impose a number of duties on shipowners, employers, employees and others. Inter alia, a shipper must not offer packaged goods for shipment or

carriage without furnishing a dangerous goods declaration or a marine

pollutant declaration in the proper form.38 Packaged goods must be

packaged, marked and labelled in accordance with the IMDG Code

and must not be shipped if the shipowner or master knows or ought to know that the goods are not packaged so as to withstand the

ordinary risk of carriage by sea.39 The shipper of dangerous goods to be carried in bulk must provide written notification of the nature of the goods together with other required details.40

31 See The Athanasia Comninos [1990] 1 Lloyd's Rep. 277, 282, per Mustill J.; Rederi Aktiebolaget Transatlantic v. Board of Trade (1924) 30 Com. Cas. 117, 128, per Roche J, ("there is much to be said for the view that the true basis ofthe doctrine is apt to be a little obscured if one thinks only of dangerous goods. The real foundation of the principle is to be found in Lord Tenterden's statement in his Treatise on Shipping, that the hirer of anything [e.g., a charterer] must use it in a lawful manner and according to the purposes for which it is lent.") 32 The Amphion [1991] 2 Lloyd's Rep. 101.

33 The Amphion [1991] 2 Lloyd's Rep. 101. 34 See below, part VIII. 35 Hamburg Rules, art. 13(1). 36 Hamburg Rules, art. 13(2). 37 Hamburg Rules, art. 15(l)(a). 38 Merchant Shipping (Dangerous Goods and Marine Pollutants) Regulations 1990, Reg. 7. 39 Regs 10-11. 40 Reg. 17.




shipper shall not be responsible for loss or damage sustained by the

carrier or the ship arising or resulting from any cause without the act,

fault or neglect of the shipper, his agents or servants",46 this has been

held, in The Giannis NK,41 not to reduce the shipper's duty not to ship

dangerous goods under art. IV, r. 6 from an absolute duty to one

arising from negligent or deliberate conduct. The Court of Appeal

rejected the argument that the imposition of fault-based, rather than

absolute, liability on the shipper would reflect a uniform policy,

mirroring the Hague-Visby Rules reduction ofthe shipowner's liability to provide a seaworthy ship from an absolute liability to one to

exercise due diligence.48 The shipper was absolutely liable provided only that he was responsible for the "act" of shipment.49

IV. Acceptable Risks

In The Athanasia Comninos50 Mustill J. identified a gap between cases

of "safe carriage" (where all risks of carriage might be eliminated by

provision of complex equipment or rigorous standards of performance) and cases of "acceptable carriage" (where, because of the nature of

the goods, even strict compliance with the accepted methods of carriage will not suffice to eliminate the possibility of an accident), so that "an

accident is due, neither to the unusual cargo, nor to any shortcomings in the carrier, but to simple bad luck". In his judgment, where such

risks arise not from breach ofthe shipper's duty not to ship dangerous

cargo nor from breach ofthe carrier's duty, the risk of such accidents

falls on the carrier.51 Thus, where a cargo is generally known to involve

carriage risks which the carrier cannot necessarily avoid by carrying it

properly, he cannot prove that the goods were non-contractual merely

by proving that despite proper standards of carriage an accident

occurred.52 What this means is that the carrier cannot claim for his

loss from the shipper: if neither party is in breach, the general principle must be that each party must bear his own losses. A shipowner who

wishes to obtain protection against such risks should contract for it,

e.g., by a clause empowering him to deal with the cargo or claim an

indemnity for losses resulting from warlike activities.53

' Emphasis added. ' [1996] 1 Lloyd's Rep. 577.

1 This is not an entirely convincing argument anyway, given the high standard of due diligence required to provide a seaworthy ship under the Hague-Visby Rules, art. III, r. 1 in Riverstone Meat Co. Ltds. Lancashire Shipping Co. Ltd. (The Muncaster Castle) [1961] A.C. 807. 1 The Giannis NK [1996] 1 Lloyd's Rep. 577, following The Fiona [1993] 1 Lloyd's Rep. 257.

1 [1990] 1 Lloyd's Rep. 277, 283-284. See also The Domald[ 1920] P. 56 (cargo owner not liable for loss from detention through seizure as prize of "suspicious" but lawful cargo); The Rio de Janeiro [1919] P. 242n.; The Heim [1919] P. 237; The Einar 7ar/[1920] P. 64n. The Amphion [1991] 2 Lloyd's Rep. 101, 105, per Evans J. See The Domald [1920] P. 56.




the shipper not to ship dangerous goods, then, though the carrier

clearly should accept the risks of goods which have been expressly

agreed in the contract, he may not be obliged to do so where the risk

in question was not one of which he was, or should normally have

been, aware. One view is that he is obliged to take them if the

danger can be avoided by expense and care on his part, otherwise he

is not.61

The contract may exclude cargo which invdlves its own peculiar risks or only permit "lawful merchandise". General words of exclusion

are prima facie to be construed as having their natural and larger

meaning, and not to be limited to things eiusdem generis with those

specifically enumerated unless there is something in the document

shewing an intention so to limit them. Thus, a contract to carry "lawful

merchandise, excluding acids, explosives, arms, ammunition or other

dangerous cargo" was held to demonstrate an objection to dangerous

goods and so not to permit turpentine.62

VII. Burden of Proof

It was held in Williams v. East India Co.63 that the burden is on the

shipowner to prove breach of the shipper's duty. More recently, this burden has been reformulated, by Mustill J. in The Athansia

Comninos,64 to focus on the carrier's rather than the shipper's duty. In

his view, the burden is on the carrier to prove that he has used the

appropriate means to carry the contract goods, without having to

engage in the often difficult tasks of establishing the precise character

ofthe goods, and the precise respects and degree in which they deviated

from the norm.

In the absence of proof that the carrier had accepted the risk, proof that an accident occurred despite strict compliance with the standards of proper carriage prima facie establishes shipment of a non-

contractual cargo.65

VIII. The Effects of Shipping Dangerous Goods

Where the necessity for a general average act arises from fault of the

plaintiff which is actionable at the suit of the defendant, the plaintiff is disentitled from claiming general average. Thus, a person who ships

61 Scrutton, at p. 103. 62 Chandris v. Isbrandtsen-Moller Inc. [1951] 1 Q.B. 240. Cf Micada CN. S.A. v. Texim (The Agios

Nicolas) [1968] 2 Lloyd's Rep. 57. 63 (1802) 3 East 192. 64 [1990] 1 Lloyd's Rep. 277, 283. 65 The Amphion [1991] 2 Lloyd's Rep. 101, \06, per Evans J.




dangerous goods which occasion a peril requiring the goods to be

jettisoned will not recover a general average contribution.66

At common law, a shipper of dangerous goods in breach of

contract will be liable in damages for both the physical and economic

loss resulting from his breach. The breach may justify termination of

the contract. But this will not necessarily be so. Thus, the carrier may be obliged, or possibly entitled, to take measures to render the cargo safe and continue performance, though with a right to damages for

expenses and losses incurred.67

Under the Hague-Visby Rules, art. IV, r. 6, where dangerous goods have been shipped without the carrier's knowledge and consent, they

"may at any time before discharge be landed at any place or destroyed or rendered innocuous by the carrier without compensation". Moreover, the fact that the carrier has knowingly consented to carry

dangerous goods does not lessen his duty or power to act for the safety of the venture. "If any such goods shipped with such knowledge and consent shall become a danger to the ship or cargo, they may in like

manner be landed at any place or destroyed or rendered innocuous by the carrier without liability on the part ofthe carrier except to general average, if any." Although the Rule gives the carrier an apparently unfettered option as to how he acts, he may well be entitled only to act reasonably.

In the case of goods shipped without the carrier's knowledge and

consent, art. IV, r. 6 stipulates that "the shipper of such goods shall be liable for all damages and expenses directly or indirectly arising out of or resulting from such shipment".68 Devlin J. has stated that the absence of such a provision in the case of dangerous cargo does not

require an implication that in such a case the shipper is not liable for

damages, since (what are now) the Hague-Visby Rules are intended to control certain matters only, leaving others to be governed by the

ordinary law of contract. However, whereas this allows the parties to make provision for such a situation, since by definition the shipment is with the carrier's consent, the shipper will remain prima facie not liable to damages at common law.

In the view ofthe Court of Appeal in The Fiona, the words "directly or indirectly" in art. IV, r. 6 are not designed to increase the range of proximate losses (beyond the foreseeability rule in Hadley v.

Baxendale69); they extend the shipper's liability for causation,70 to cases where the shipment merely provided the occasion for something

66 Greenshield, Cowie & Co. v. Stephens & Sons [1908] A.C. 431. 67 Micada C.N. S.A v. Texim (The Agios Nicotas) [1968] 2 Lloyd's Rep. 57. 68 Hague-Visby Rules, art. IV(6). 69 (1854) 9 Ex. 341. 70 The Fiona [1994] 2 Lloyd's Rep. 506 (C.A.), per curiam. That would also exclude the Hadley >

Baxendale limitation: ibid., 522, per Hoffmann L.J.




absolutely liable not to ship dangerous goods, and the risk of carrying such goods may be assumed by the carrier; but the shipper will be

strictly liable to the extent that such risks have not been assumed by the carrier.



cargo risks: "dangerous" goods

Documents