High Court: Mr Justice Teare

Jeremy Russell QC & James Turner QC (instructed by Ince & Co LLP) for the Claimants

Timothy Saloman QC (instructed by Winter Scott LLP) for the Defendant

Background

In the recent English High Court OCEAN VICTORY (the "Vessel"), Charterers’ attempts to dilute the classic definition of a safe port were rejected. The High Court preserved certainty in the allocation of risks between owners and charterers and this left Charterers liable for a very significant sum.

Background

Charterers ordered the Vessel to load cargo in Saldanha Bay, South Africa and discharge in Kashima, Japan. Following the Vessel’s arrival in Kashima the weather started to deteriorate. By the morning on the day of departure, the Kashima fairway was exposed to winds of approximately Beaufort scale force 9, a prevailing swell, waves of 1.5 to 6.5 meters in height and "long waves" (small in height but lasting for prolonged periods of time).

On the advice of Charterers’ representative (although this was disputed by Charterers) the Vessel, with some cargo still on board, left the port as the mooring lines and tugs were insufficient to restrain her in the prevailing weather conditions. On departure, the Vessel encountered gale force winds and heavy seas. She then struck the breakwater, went aground and broke up.

Gard, as assignee of the claims of the registered owner and demise charterers, brought proceedings against charterers for breach of the safe port warranty. Relying on the EVIA NO.2, Charterers argued that the port was not unsafe and that the emphasis was on "reasonable safety". Charterers could not, they said, be expected to have systems in place to guard against all conceivable hazards, including those which had previously not arisen – i.e. vessels being "trapped". Alternatively, the casualty was caused by the Master’s negligence in leaving the port and/or his negligent navigation.

Decision

The Court held that the casualty was caused by the unsafety of Kashima port and applied the classic definition of a safe port in the EASTERN CITY [1958] 2 Lloyd’s Report 127 at p.131:

“a port will not be safe unless, in the relevant period of time, the particular ship can reach it, use it and return from it, without, in the absence of some abnormal occurrence, being exposed to danger which cannot be avoided by good navigation and seamanship”.

It was held that the measure of safety is not absolute, but equally cannot be qualified by what is“reasonable”. The Court must be guided by the prospective exposure of the vessel to danger (as opposed to the conduct and any failings of the port authority) and whether the dangers could be avoided by good navigation and seamanship. In short, as long as a vessel can safely depart, in these circumstances, a port will be safe notwithstanding the conditions. Safe departure from Kashima required more than good navigation and seamanship, as good luck was also necessary. Here, there was a real risk that vessels might have to leave the port due to mooring failings and that similar weather conditions could arise again.

In the circumstances, the port did not have a safe system in place ensuring that vessels needing to leave the port could do so. The availability of pilotage did not constitute a safe system. The Court rejected the Charterers’ argument that Gard was required to identify a system which, had it been in place, would have enabled the Vessel to leave safely, and reaffirmed that prospective unsafety was sufficient to establish breach of the safe port warranty.

The Court also clarified that the combination of long waves and the storm, although rare, was not an“abnormal occurrence” – this phrase denotes occurrences unrelated to the prevailing conditions of the port.

On the evidence, the Court was satisfied that the Vessel left on the Charterers’ advice, which was the effective cause of the casualty since it was given by Charterers without considering whether it was safe for the Vessel to depart. There was no negligent navigation by the Master, but the Court confirmed that, even if there had been, the real and effective cause would have remained the unsafety of the port.

The Charterers were accordingly found liable in the considerable sum of US$137.6 million.

Conclusion

Although each safe port case will be determined on its own facts, the OCEAN VICTORY case re-emphasises the classic test set out in the EASTERN CITY and affirms the burden upon charterers in relation to their duty to nominate a safe port.

Moreover, the OCEAN VICTORY case also demonstrates that the issues of safety and negligent navigation are not mutually exclusive, and that in the event of unsafety, negligence by the Master will not necessarily be sufficient to break the chain of causation so as to relieve charterers of liability.