Univeg Direct Fruit Marketing and others v. MSC Mediterranean Shipping Company S.A. (MSC Stella) [2013] EWHC 2962 (Comm)

A cargo of clementines shipped in containers on a liner service from South Africa to the Netherlands arrived five days “late”. Cargo Interests alleged that this delay significantly damaged the fruit. The claim failed because (a) Cargo Interests did not prove that the cargo was shipped in good order and condition; and (b) pursuant to the terms of its bills of lading, the Carrier was not obliged to load the cargo by any particular time or on any particular ship. This judgment demonstrates how difficult it is to recover damages in respect of deterioration of perishable cargoes shipped on liner services that experience delays.

Background facts

The Carrier issued booking confirmations that referred to the vessel MSC Lesotho. However, due to the effects of industrial action at South African ports, the Carrier advised subsequently that the entirety of the cargo could not be accommodated on MSC Lesotho, and that the balance would “obtain priority for loading” on another vessel, MSC Stella, which was to depart Cape Town several days later. 

MSC Lesotho and MSC Stella arrived at Rotterdam on 26 June and 1 July 2010 respectively. The claim concerned the condition of the cargo discharged from MSC Stella only. The Claimants argued that the Carrier was obliged to carry the cargo on MSC Lesotho, and that the additional five days of transit time pushed the condition of the cargo over a “tipping point” from having a commercial life to being fit only for salvage sale.

The Commercial Court decision

The Court found that:

  1. There was insufficient evidence of the condition of the cargo upon shipment, in particular as regards pre-shipment treatment and handling, for Cargo Interests to discharge the initial burden of proving that the cargo was shipped without inherent vice and in good order and condition and able to withstand the ordinary incidents of carriage between the ports concerned. In this regard, export certificates alone were insufficient. Further, the condition of the cargo on outturn (in particular, given the expert evidence of certain varieties of rot) suggested that the cargo was not free from deterioration at the time of shipment. Therefore, the Court was unable to conclude that the cargo was in good order and condition upon shipment.
  2. Whilst it was clear that shipment on MSC Lesotho was envisaged initially, the booking confirmations were subject to the terms of the Carrier’s bills of lading, which provided that the Carrier could use any vessel. As such, Cargo Interests did not contract for any particular ship or loading time.
  3. An argument that the Carrier failed to use reasonable despatch was rejected.
  4. The Court accepted expert evidence that the cargo would have been close to the end of its commercial life even if it had been shipped on MSC Lesotho and did not suffer material further deterioration during the additional five days in transit, finding that there was no “tipping point” in the ripening process. 

Comment

Many cargo interests in the fruit trade try to claim that a clean on board bill of lading is evidence that the fruit was shipped in good order and condition, but this is not correct. Fruit cargoes ripen and/or deteriorate from the time of harvest. This  process can be controlled if the cargo is picked at the right time and handled appropriately (for example, by treatment to protect against disease and maintenance of the optimal temperature) and in accordance with first class practices prevailing in the trade for that particular cargo. If the cargo is not handled correctly from the time of harvest, then the ripening/deterioration process will occur more rapidly than cargo interests would want or expect. This judgment demonstrates that, in order for claims of this nature against a carrier to succeed, evidence of pre-shipment handling and condition is imperative. In our experience, it can be costly, difficult and time-consuming for cargo interests (especially cargo receivers) to gather this evidence, often disproportionately so.

Furthermore, save in unusual circumstances where a carrier has undertaken specifically and unequivocally to carry cargo on a particular vessel or within a particular time, if the usual terms of the bills of lading applicable in this reefer trade are incorporated, then it is cargo interests, rather than the carrier, who bear the risk of delay unless the delay is due to clear fault on the part of the carrier. 

Georgina Guy