This case arose from the grounding of the appellant's container vessel, the CMA CGM Libra, on leaving the port of Xiamen, China. Teare J held that the vessel's defective passage plan was causative of the grounding, and that this involved a breach of the carrier's seaworthiness obligation under art 3.1 of the Hague Rules: see Alize 1954 v Allianz Elementar Versicherungs AG [2019] EWHC 481 (Admlty) (CMI362). The Judge's decision was upheld by the Court of Appeal: see Alize 1954 v Allianz Elementar Versicherungs AG [2020] EWCA Civ 293 (CMI714). The appellant appealed to the Supreme Court, arguing that the decisions of the Courts below were wrong, that its vessel was not unseaworthy and/or that it exercised due diligence, and that any negligence in passage planning was a navigational fault exempted under art 4.2.a of the Hague Rules.

The appellant argued, first, that the carrier's obligation under the Hague Rules was subject to a category-based distinction between a vessel's quality of seaworthiness or navigability, and the crew's act of navigating: a distinction should therefore be drawn between seaworthiness, which concerned the attributes and equipment of the vessel, and the navigation and management of the vessel, which concerned how the crew operated the vessel using those attributes and equipment. Second, the appellant contended that provided the carrier had equipped the vessel with all that was necessary for safe navigation, including a competent crew, the crew's failure to navigate the vessel safely did not amount to a lack of due diligence on the part of the carrier.

Held: Appeal dismissed.

In Nautical Challenge Ltd v Evergreen Marine (UK) Ltd [2021] UKSC 6 at [38] this Court observed that international Conventions should in general 'be interpreted by reference to broad and general principles of construction rather than any narrower domestic law principles'. The relevant general principles include the provisions of the Vienna Convention on the Law of Treaties 1969, the travaux préparatoires as a supplementary means of interpretation, the history, origin, and context of the Rules, and the French text of the Rules, as the official and authoritative version.

Did the defective passage plan render the vessel unseaworthy for the purposes of art 3.1 of the Hague Rules?

The starting point is the ordinary meaning of the wording of the relevant Rules in the context of the Hague Rules as a whole. The scheme of the relevant Rules is clear. As foreshadowed by art 2, art 3 sets out the responsibilities and liabilities of the carrier, and art 4 sets out the rights and immunities of the carrier. The carrier's primary responsibilities under art 3 are: (i) before and at the beginning of the voyage to exercise due diligence to make the vessel seaworthy, as provided in art 3.1; and (ii) to properly and carefully care for the goods, as provided in art 3.2.

In relation to the obligation of seaworthiness, the relevant right and immunity of the carrier is set out in art 4.1 which defines the circumstances in which the carrier shall not be liable 'for loss or damage arising or resulting from unseaworthiness'. This is limited to cases in which the carrier discharges the burden of proving that it exercised due diligence.

In relation to the obligation to properly and carefully care for the cargo, the relevant rights and immunities are set out in art 4.2 which provides a list of general exceptions. These include art 4.2.q, under which the carrier will not be responsible for loss or damage arising from a cause which it can prove arises without the actual fault or privity of the carrier or the fault or neglect of the carrier's servants or agents. They also include two exceptions which include the negligence of the carrier’s servants or agents - the nautical fault exception under art 4.2.a, and the fire exception under art 4.2.b.

The entirely different regimes governing the carrier’s responsibility for negligence under arts 4.1 and 4.2 confirm what is apparent from the scheme of the Hague Rules, namely that art 4.1 sets out the relevant right and immunity for the carrier’s responsibilities and liabilities under art 3.1, and art 4.2 sets out the relevant rights and immunities for the carrier’s responsibilities and liabilities under art 3.2. That this is the proper interpretation of the Hague Rules is confirmed by the decision of the Privy Council in Maxine Footwear Co Ltd v Canadian Government Merchant Marine Ltd [1959] AC 589. Maxine Footwear clearly establishes that where loss or damage is caused by a breach of the carrier's obligation to exercise due diligence to make the vessel seaworthy under art 3.1, the art 4.2 exceptions cannot be relied upon, including where the excepted matter is the cause of the unseaworthiness. This established principle undermines the appellant's argument that there is a category-based distinction between seaworthiness and navigation or management of the ship. They are not mutually exclusive. Negligent navigation or management of the ship may cause unseaworthiness. If it does, that negligence is likely to amount to a failure to exercise due diligence and the carrier will be liable for any resulting loss and damage. The 'natural construction' of the Hague Rules, as confirmed by Maxine Footwear, is therefore that the art 4.2 exceptions do not apply to a causative breach of the carrier’s obligation to exercise due diligence to make the vessel seaworthy under art 3.1.

There is nothing in the travaux which clearly indicates otherwise. There is no doubt that the nautical fault exception was an important issue for the shipowners at the Conferences and that its inclusion was integral to the compromise which was struck. However, that compromise involved various different elements including package limitation and time limits. There is, moreover, nothing in the travaux which shows that the nautical fault exception was meant to limit the shipowners' obligation to make the vessel seaworthy before the commencement of the voyage, or that they were to be mutually exclusive. Indeed, there are statements made in the travaux which indicate that the nautical fault exception was not to impact upon the shipowners' obligation of seaworthiness.

Nor does the appellant's reliance on the US Harter Act advance the argument. While the Harter Act does link its nautical fault exception to the carrier’s obligation to exercise due diligence to make the vessel seaworthy, it does so in terms which mean that the nautical fault exception can only be relied upon if such due diligence has been exercised. As under the Hague Rules, the nautical fault exception cannot therefore be relied upon where there has been a material failure to exercise due diligence to make the vessel seaworthy.

As for the appellant's reliance on the French text of the Hague Rules, the dictionary definition of 'état de navigabilité' is 'seaworthiness', so that the point may be said to be circular. Seaworthiness did have an established common law meaning at the time of the Rules, and there is no hint in the travaux that some narrower meaning was intended to be adopted in the Hague Rules. The Hague Rules themselves suggest a wide meaning was intended by setting out specific aspects of seaworthiness in arts 3.1.b and 3.1.c, as well as the general duty to make the vessel seaworthy under art 3.1.a.

The appellant's argument that the concept of unseaworthiness is subject to an attribute threshold is neither helpful nor correct - it is best treated as an illustrative rather than a prescriptive requirement. However, the 'prudent owner' test is not a universal test of unseaworthiness, although it has stood the test of time well and in many cases will be an appropriate and helpful test to apply. It is also well suited to adapt to differing and changing standards. The standards required are not absolute but are relative to the vessel, the cargo, and the contemplated voyage. The standards required may rise to reflect improvements in, eg, shipbuilding, equipment, or navigation. There may, however, be cases at the boundaries of seaworthiness where it is not appropriate merely to apply the prudent owner test. In such cases it may be necessary to address a prior question of whether the defect or state of affairs relied upon sufficiently affects the fitness of the vessel to carry the goods safely on the contractual voyage as to engage the doctrine of seaworthiness. This is not such a case.

The preparation of a passage plan is a matter of navigation. The failure to note or mark the uncharted depth warning in the passage plan and on the working chart can be regarded as an 'act, neglect, or default' in 'the navigation … of the ship' within the art 4.2.a exception. On the proper interpretation of the Hague Rules, and as confirmed by Maxine Footwear and many other decisions, the art 4.2 exceptions cannot, however, be relied upon in relation to a causative breach of the carrier’s obligation to exercise due diligence to make the vessel seaworthy. The Judge found that the defects in the passage plan rendered the vessel unseaworthy. The fact, if it be a fact, that the 'act, neglect, or default' in the navigation of the ship is itself the unseaworthiness, makes no difference. What matters is the fact of unseaworthiness. In any event, the negligence in this case was the decision not to note or mark the uncharted depth warning in the passage plan and on the chart. The unseaworthiness was the consequent defective passage plan and working chart. This is therefore a case where the negligent navigational act has caused the unseaworthiness. The Judge found, and the Court of Appeal affirmed, that a defective passage plan is an attribute of the vessel. However, even if a defective passage plan were not considered to be an attribute of the vessel, this would make no difference, as there is no attribute threshold in law. Given the Judge’s findings as to the importance of passage planning to the safe navigation of the vessel, there can be no doubt that this was an appropriate case for the Judge to apply the prudent owner test of unseaworthiness. This is not a case at the boundaries of unseaworthiness. It concerns the safety of the vessel.

Did the defective passage planning constitute want of due diligence on the part of the carrier for the purposes of art 3.2 of the Hague Rules?

The appellant's alternative argument was that, provided the carrier has equipped the vessel with all that was necessary for safe navigation, including a competent crew, the crew’s failure to safely navigate the ship is not a lack of due diligence by the carrier. Put another way, it is outside of the carrier's orbit of responsibility. Therefore, because the appellant provided all the equipment and instructions to allow the crew to create a proper passage plan, a defective plan was not caused by the carrier’s lack of due diligence.

However, at all material times the vessel was within the appellant's 'orbit'. The work of preparing a proper passage plan to make the vessel seaworthy for the voyage was entrusted to the master and deck officers, who were the appellant's servants. The failure to exercise due diligence was not that of some third party who could not at that time be regarded as an agent of the carrier, such as in the work of a shipbuilder prior to the carrier's acquisition of the vessel, or in the work of a shipper prior to the carrier's acquisition of control over the cargo. Here, the vessel was at all times under the carrier's control and the failure to exercise due diligence was that of the carrier's servants in the preparation of the vessel for its voyage. The fact that navigation is the responsibility of the master, and involves the exercise by the master and deck officers of their specialist skill and judgment, makes no difference. The same is true of much work necessary to make a vessel seaworthy, such as work carried out by specialist ship repairers, or main engine work carried out by engine manufacturers, or by the chief engineer and the engineering officers. It is commonplace for a carrier to entrust the task of making the vessel seaworthy to those with particular skills and experience. The carrier nevertheless remains responsible for any lack of due diligence in the performance of that task: see Riverstone Meat Co Pty Ltd v Lancashire Shipping Co Ltd (The Muncaster Castle) [1961] AC 807.

The fact that the carrier’s due diligence obligation in relation to crewing the vessel relates to their competence takes matters no further. Where that duty is discharged, the carrier nevertheless remains liable for a failure by a member of that competent crew to exercise due diligence to make the vessel seaworthy. The provision of a competent crew is only one aspect of the carrier’s seaworthiness obligation. This is explicitly so under the Hague Rules which include both an obligation to 'properly ... man … the ship' (art 3.1.b), and an obligation to 'make the ship seaworthy' (art 3.1.a).

In relation to passage planning, the carrier's obligation under art 3.1 means that there have to be systems in place to ensure that proper passage planning takes place, but that is not the limit of the carrier's obligation. As with the provision of a competent crew, it is an important part of the carrier's seaworthiness obligation, but is not definitive of it. If, for example, the causative negligence consisted of errors made by the master or deck officers in the execution or monitoring stage of passage planning during the voyage, prima facie the carrier would be able to rely on the nautical fault exception. It would not be able to do so, however, if those errors were attributable to the carrier's failure to have proper systems in place for the execution or monitoring of passage planning as that would involve a failure to exercise due diligence to make the vessel seaworthy. The same result would follow if the errors were attributable to the carrier's failure to exercise proper care in relation to crew competence. If, however, the causative negligence consisted of errors in passage planning which occurred at the appraisal or planning stage and rendered the vessel unseaworthy before and at the beginning of the voyage, the carrier would be liable, regardless of whether it had discharged its obligations in relation to the systems for passage planning and crew competence.

The carrier cannot escape from its responsibilities under art 3.1 of the Hague Rules by delegating them to its servants or agents qua navigators, or qua managers, or qua engineers, or qua ship repairers. If the task of making the vessel seaworthy has been entrusted by the carrier to those servants or agents, they are acting qua carriers and under art 3.1 of the Hague Rules the carrier is responsible for any causative failure by them to exercise due diligence.