| Archives: September 2012

Award 1196 – 2nd degree – C/P Gencon – Damage by sea water to a cargo of fertiliser – Subrogated underwriters – Receiver’s obligation to minimize his damage – Ship owner liability (yes). The failure of watertight hatches having been the cause of wetting by sea water renders the ship owner liable for damages to cargo. Even if the commodity retained its chemical characteristics, its caked aspect made it unfit for spreading leading to a reduction in its market value. The indemnification due from the ship owner is based on the distress sale, of which the principle was agreed by its P and I club, reduced by a certain percentage due to the worsening of damages after improper warehousing by the receiver.

Award 1202 – Partnership agreement between a trader and a carrier – Carriage of citrus fruit and early vegetables – Engine break down – Cargo damage – Legal subrogation (yes) – Carrier’s liability (yes). Having indemnified the receivers for cargo damage ascertained on the vessel’s arrival which was delayed by an engine break down during sea passage, the trader and his subrogated insurer sued the Carrier for his liability. The Arbitral Tribunal firstly decided it was competent because the trader’s action was not based on the bills of lading but on the partnership agreement containing the arbitration clause. The Tribunal stated that, by having indemnified the receivers, the Trader demonstrated his interest to act and that, according the Dutch law which governed the insurance contract, the Insurer was entitled to legal subrogation, after demonstrating that it had indemnified the policy holder. On the essence of the matter, the Tribunal considered that the “force majeure” elements alleged by the Defendant were not proven, that the Carrier had failed to meet its obligations and should be declared liable for the damage. To assess the damage, the Tribunal took into account that some findings and valuations were not contradictory and applied a rebate of 30 to 50 % on the amounts asserted by the Claimant.