Shah Nawaz wanted to know who is responsible if his containers fell overboard and what should be the next course of action..
We had loaded 14 containers stuffed with cooking sunflower oil packed in consumer packs on a Ship & After loading of the containers on the deck 6 containers were accidentally dropped in the water.
Later those containers were taken out of the water & kept at the leakage area of the port. Along with these 6 containers 8 good containers were also offloaded from the ship & kept in the port.
Many claims, surveys, reports etc. were carried out by Insurance, Surveyor etc. & this took lots of time due to procedural delay. As a result there are huge Port Storage Charges accumulated on those 14 Containers.
My question is that as per law who will bear those port storage charges; Shipping Line, Freight Forwarder, Insurance or Shipper?
The mistake was entirely from the shipping line side & shipper (us) have already suffered in terms of Loss of Sales & Revenue, Unhappy customer etc. Are we legally eligible for any compensation from Shipping Line on these losses?
Thanking you in advance for your kind consideration & expert reply
Shah, there is no one straight answer to your question as there are several variables for this scenario..
I would like to analyse this question operationally..
1 You mention that out of 14 containers loaded on deck, 6 were accidentally “dropped” in the water.. From a purely operational point of view, it is not possible to “accidentally drop” containers that have already been loaded on deck.. Even if the wording “accidentally dropped” was used incorrectly, an incident like this where multiple containers went overboard, can happen only if :
a. The ship listed so badly these containers slipped off the deck.. For those who don’t understand “listed“, it means a ship leaning sideways – click here to see an example..
- A ship can list due to stability problems on board, which is under the control of the ship (Captain & Chief Officer) and in that scenario, the ship could be held liable.. But on the other hand, the stability of the ship could also be affected by incorrect stacking of containers which could be due to mis-declaration of container weights by various clients..
b. These 6 containers were stacked one on top of the other and the whole stack collapsed after loading and all the 6 fell into the water.. Highly improbable..
- If the containers were stacked one on top of the other and it collapsed, here again that could be due to incorrect stacking of containers or the ship not calculating the tier weights properly which again could be based on the weight information provided..
2 On a container ship, the stevedore is responsible for the lashing or securing of containers that have been loaded on board.. The stevedores do the lashing or securing on deck as the loading progresses so as not to avoid time wastage.. Did these containers “drop into the water” inspite of this being done or before it was done..??
3 You would need to ascertain all this information before any blame is apportioned and you cannot categorically state that the shipping line is at fault, although technically they undertook the responsibility of accepting your containers for safe transportation to a specified destination.. No shipping line will accept any responsibility till the facts are made clear and even then it will be an uphill task as generally the shipping lines are quite adequately covered for such incidents..
4 The type of insurance coverage that your cargo has, plays a major role in what kind of remedy you can seek and from whom..
5 Each country has its own regulations with regards to insurance coverage/marine claims and it would be best if you seek advice from your insurance company on how to tackle this..
I had also sought the legal/contractual views of Mr.David D Murray one of the regular contributors to this blog and also a Contract/Law expert and he raises some valid points as below :
In order to analyze this, I would need to see the shipping line’s standards terms and conditions, which besides defining the rights and liabilities between the shipping company and the shipper, would detail the jurisdiction, venue and choice of law issues.
Because these issues do not exist in a vacuum, whenever there is a contract involved, one must always go to the contract first and if the contract does not speak directly to the issue, then apply the law. I would also need to know the port where the goods were loaded, where the containers went overboard, and the port of intended delivery.
There are two types of law in the world, the Common Law, used in the countries that were or are UK colonies or commonwealths, and the Civil Law, which is applied in most other countries of the world, and which apply to Admiralty Law issues. Negligence, I believe is pretty well a shared concept in both legal systems, however every jurisdiction has its nuances.
In other words, it is not as simple as how many pancakes does it take to cover a rock. Everyone knows you must first know the size of the rock.
If you can provide me the contract information, I would be happy to analyze it. Strictly from a negligence tort action, the shipping line would most likely be liable, but I would need to see the Standard Terms and Conditions of the shipping line before making any type of judgment call.
If anyone has any other views or thoughts to contribute, please do so.. This could happen to any of us in the normal course of business and its good to have some thoughts on how this issue must be handled..