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26 September 2012
On March 10 2005 five Tiara model yachts were loaded on board the M/V S Partner in the port of Baltimore to be carried to Genoa. The yachts were all stowed in one hold of the ship. The ship was fully loaded with other yachts and machinery.
During the sea passage, the ship encountered adverse weather and sea conditions, causing the five Tiara yachts to shift inside the hold and suffer serious damage.
Upon the ship's arrival at Genoa on March 29 2005, the receivers immediately applied for the appointment of a court surveyor, who deemed the yachts a total loss due to the extent of the damages suffered and expressed the opinion that their lashing upon loading had been insufficient and inadequate.
Subsequently, the receivers of the yachts commenced legal proceedings before the Tribunal of Genoa, claiming the full value of the yachts – a total of $1,843,299.95 – by arguing that the owner was not entitled to rely on the limitation of liability under Article 4.5(a) of the Hague-Visby Rules. According to the claimants, the yachts had not been lashed at all or, alternatively, their stowage and lashing inside the hold had been so insufficient as to amount to 'gross fault'.
The owner argued that:
On August 28 2012 the Tribunal of Genoa issued Judgment 2962/2012, which granted the receivers' claim on the issue of liability, but held that the owner was entitled to limit its liability to the sum of €96,971.96.
The tribunal found that the sea and weather conditions were not so severe as to amount to an excepted peril, due to the fact that such conditions could be foreseen and were not out of the ordinary course of the sea passage (especially in the Atlantic Ocean and in winter). The tribunal thus focused its attention on the limitation issue.
In this respect, the tribunal held that although the lashing of the five yachts had probably been carried out without due diligence, and such inadequacy probably caused the incident (rather than the weather and sea conditions encountered in navigation), the owner was still entitled to rely on the benefit of limitation in Article 4.5(a) of the 1924 Brussels Convention, as amended by the 1968 and 1979 Protocols.
Accordingly, the tribunal stated that gross fault was insufficient to exclude the benefit of limitation, and that in order to exclude the limit, it was necessary for the claimants to provide evidence that the damage had resulted from an act or omission of the carrier done either with the intent to cause damage or "recklessly and with knowledge that damage would probably result".
According to the evidence collected during the course of the proceedings, it was possible to affirm only that the damage to the yachts had been at most foreseeable, but not that it had been foreseen by the carrier.
This decision is important because it applies the same principles to the carriage of goods by sea that the Supreme Court recently affirmed regarding carriage by air under the 1929 Warsaw Convention.
The tribunal has clearly made a crucial distinction between the notion of gross fault and the notion of "recklessness and knowledge that a damage would probably result".
According to the tribunal, the expression used in Article 4.5(a) of the 1924 Brussels Convention (as amended by the 1968 and 1979 Protocols) is clear and does not justify a wide interpretation. This implies that the carrier loses the right to invoke the benefit of limitation only when the claimant can prove that the dangerous event had been foreseen by the carrier; general foreseeability is insufficient. Therefore, the fundamental rule that can be inferred from this decision it is that it is insufficient for claimants to prove that the carrier's behaviour was grossly negligent; rather, it is necessary to demonstrate that the carrier or its agents acted recklessly and foresaw that damage would result from their act or omission. This decision strengthens the carrier's position, since it will be difficult for claimants to discharge such a burden of proof.
For further information on this topic please contact Maurizio Dardani or Brian Dardani at Dardani Studio Legale by telephone (+39 010 576 1816), fax (+39 010 595 7705) or email (email@example.com or firstname.lastname@example.org).
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