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Recently the Norwegian Supreme Court decided a case concerning nautical fault and seaworthiness at the commencement of the voyage. As most readers will know, the Hague-Visby Rules (as implemented in the Norwegian Maritime Code) provide an exception to liability for cargo damage if an incident is caused by nautical fault (error in navigation or management of the ship). However, the shipowner remains responsible for exercising due diligence in making the vessel seaworthy at the commencement of the voyage.
The case concerned the carriage from Iceland to the UK of 1,900 tons of ferro-silicon. Contrary to the prevailing safety rules, only one person was on watch during night-time sailing and this person (the second mate) fell asleep. About one hour later the vessel grounded close to the Orkneys after having deviated about 2.5 nm from its autopilot course due to a side current. The cargo damage amounted to NOK 280,000 for which the cargo interest claimed damages. The shipowner on the other hand claimed a general average contribution from the cargo interest of NOK 865,000.
The facts of the case included the information that the vessel had previously been subject to sanctions by Dutch Port State Control because the master had ignored the prevailing rules on double watch-keeping during night-time sailing (this was apparent from an inspection of the vessel’s logs). Following this the shipowner had taken some corrective measures, including arranging a meeting with the master and the second mate and circulating a reminder to all vessels in the fleet of the importance of complying with safety rules. The master, however, persisted in his defiance of the rules, as evidenced by the later grounding.
Before the courts it was not in dispute that the second mate falling asleep constituted nautical fault which, as such, would exempt the shipowner from liability. The more difficult issue was how to categorise the master’s conduct, since his failure to implement the safety rules was considered the proximate cause of the grounding: had he complied with the duty to implement double watch-keeping, the accident would in all likelihood have been avoided.
In the Court of Appeal the shipowner succeeded in arguing that the master’s failure to insist on double watch-keeping must be considered to constitute a nautical fault, since the failure to put two watchmen on duty occurred during the course of the voyage. Moreover, the Court of Appeal held that since the shipowner had taken corrective measures following the previous incident involving Port State Control, there was no basis for saying that there was privity on the shipowner’s part that could set aside the otherwise applicable exception for nautical fault.
The Supreme Court took a different approach and found it unnecessary to go into the question of privity on the part of the shipowner. Instead the Supreme Court found against the shipowner on the basis that the vessel was unseaworthy at the commencement of the voyage. The thinking behind this conclusion was that the master’s non-compliant attitude towards safety rules was a state of affairs that already existed at the commencement of the voyage. The master’s attitude exposed the ship and cargo to greater risk than would have been the case if the safety regulations had been complied with. Accordingly the ship was unseaworthy. Moreover, although the shipowner had a mere obligation to exercise due diligence in ensuring that the vessel was seaworthy at the time of commencement of the voyage, the shipowner in this respect was vicariously liable for the acts or omissions of its employees, including the master. The master’s attitude towards the safety rules was clearly negligent (if not wilful), hence the shipowner was vicariously liable for the vessel’s unseaworthiness at the commencement of the voyage.
In our view the reasoning of the Supreme Court makes good sense. While the decision may perhaps be said to signal a tendency towards restricting the normal scope of the nautical fault exception, we doubt that the judgment will have any such effect. Similar circumstances are likely to arise only very rarely in future cases, namely a persistent and deliberate failure by key personnel on board to comply with safety regulations, which has the potential to materialise as a nautical fault during the course of a voyage.
It may be added that the approach taken by the Norwegian Supreme Court bears some resemblance to that of the English House of Lords (now Supreme Court) in The Hill Harmony. That case concerned the exception for nautical fault within the context of a timecharter. Before commencement of a voyage from Vancouver to Japan, the master had decided to take the longer rhumb-line route instead of the shorter great circle route that had been ordered by the time charterer via a weather routing company. The time charterer claimed as damages the hire and bunkers costs for the longer distance sailed. The shipowner submitted that if it were so that the master should have chosen the shorter route, this mistake amounted to an “error in navigation” which, according to a paramount clause in the time charter, exempted the shipowner from liability. In the Court of Appeal the shipowner prevailed on this line of argument. The House of Lords, however, held in favour of the charterer. Since the master had made his decision before the voyage commenced, the exception for “error in navigation” would not apply; the exception was restricted to navigational matters and these would normally only concern situations encountered en route that called for nautical decision-making.
In the Norwegian case, the Supreme Court held that the exception for nautical fault did not apply since even before commencing the voyage the master had already opted not to comply with the safety rules, thus making the vessel unseaworthy. The Hill Harmony did not involve any considerations of seaworthiness, but the state of mind of the master before the commencement of the voyage was still held to be decisive in rendering the nautical fault exception inapplicable. In that case the House of Lords’ judgment included the statement that: “as a matter of construction the exception [for nautical fault] does not apply to a choice not to perform these obligations”, i.e. a choice not to comply with the obligations to perform the voyage with due dispatch and follow charterers’ orders of employment.
