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Unsafe Port Responsible for Loss of $88.5 Million Vessel

In a remarkable case which is bound to cause a major stir in the shipping industry, the High Court has ruled that the catastrophic loss of an $88.5 million bulk carrier in a force nine storm was caused by the unsafety of the modern Japanese port that she had just sailed from and not by any negligence on the part of the ship’s master.

Container PortThe vessel, laden with a cargo of iron ore, sailed from the port of Kashima into the teeth of the gale in October 2006. Although she had full use of her engines and was navigating a fairway, she lost steerage way and was blown onto a breakwater.  She was driven aground by the weather and the crew were airlifted ashore after being forced to abandon the vessel which broke apart despite salvage efforts.

The disaster gave rise to a loss of about $137.6 million, including the loss of the vessel, loss of hire and $34.5 million in wreck removal costs. Hull underwriters sued to recover those losses as assignees of the ship’s owners and demise charterers. Their claim was against time charterers who they submitted had ordered the vessel to Kashima in breach of a safe port warranty in the relevant charterparty.

Upholding the underwriters’ claim, the Court accepted that Kashima was unsafe because there was a risk that vessels moored there might be advised to leave the port’s raw materials quay on account of long waves. There was no system in place to ensure that ships either left in good time before a storm or that they did not depart in conditions that posed a threat to safe navigation. The Court found that the ship’s master had not been negligent and, even if he had been, it was the unsafety of the port which was ‘the real and effective cause’ of the casualty.

Having warranted that the port was safe, and in particular that the vessel could sail from it without being exposed to danger which could not be avoided by good navigation and seamanship, the time charterers were liable for the loss.