| Archives: April 2021

Award 1255 : 2nd degree – Gencon – Cargo damaged in transit – Materiality of the damage – Volume and quality of the pollutant – Liability – Commercial seaworthiness – Absolute obligation – Inspection of cargo holds at fault – Notice of Readiness (NOR) not exclusionary – Quantum of the damage – Recoverable amounts alone as the basis for compensation.

After inspection of the cargo holds and acceptance of the NOR, the loading of a vessel chartered for voyage was interrupted further to the discovery of cargo contaminated by slivers of paint
in one of the holds. Realizing that the cargo could

not be salvaged at the port of arrival, the charterer
informed the shipowner that it had been decided to
unload the quantities already on the vessel then sell
the recoverable amounts thereof (as the product
destined for animal feed had been downgraded as
fertilizer). Liability for the ensuring loss was
attributed to the shipowner, in view of the latter
having defaulted on its absolute obligation to ensure
proper commercial seaworthiness and present for
loading a vessel with cargo holds in a condition fit
for transporting products in bulk intended for animal
consumption, the latter having no right to blame the charterer for having started to load with the NOR being rejected, apart from the fact that the inspection of the holds was less than thorough (5%).

The compensation for loss of the goods after deduction of the recoverable amounts, the port costs incurred to unload the vessel, the storage costs for the polluted goods pending their sale as salvaged goods and the additional cost of transporting the goods was then established, on the understanding that, with regard to the sale as salvaged goods, the selling price must be their purchase price, not their resale value, given that a sale as salvage is a customary form of compensation and corresponds to practices that for that matter simply reflect the principle of minimization of damages, which the insurers correctly applied in the interests of the liable party.