Cigna Insurance Co of Europe SA NV (the plaintiff) acting under an assignment of rights, claimed for damage to a cargo of soybeans carried on board the MV Eve Trader from San Lorenzo, Argentina, and Rio Grande, Brazil, to Santander, Spain. The lawsuit was filed against Oceanalpha Shipping Ltd (Oceanalpha) as the carrier and Stamina Shipping Ltd (Stamina) as the actual carrier/shipowner. Apart from monetary compensation, the plaintiff also claimed that the MV Eve Trader must be attached as security for this obligation. Oceanalpha appeared in the process while Stamina did not. The court of first instance rejected the plaintiff's claim. On appeal, the decision was partially reversed and the defendants were ordered to compensate for the damage but the plaintiff' claim to attach the vessel as security was denied. Both parties recurred the decision in cassation before the Tribunal Supremo/Supreme Court (SC).

Held: The SC, Civil Branch, affirmed the decision of the Court of Appeal. Oceanalpha argued the excemption contained in art 4.2.a of the Hague Rules, which is concomitant with art 8 of the Law on Carriage of Goods by Sea of 22 December 1949 (LCGS 1949). Oceanalpha contended that this exemption draws a distinction between ‘nautical fault’ and negligence in the care of the cargo, releasing the carrier from liability arising from damage resulting from the crew’s negligence in the ship’s navigation and management. The Court of Appeal had decided that the damage was the consequence of an excess of humidity due to an excess in the carriage time resulting from a breakdown of the ship. The carrier contended that there was no merit in attributing a want of due diligence to make the ship seaworthy because a Lloyd’s expert reported that it was in good condition and the last annual hull and machinery inspection was conducted shortly before the time of the damage.

The Supreme Court refused to consider this argument because it supposed a further analysis of the evidence, which falls outside of the scope of the cassation and the carrier had not pointed to a specific evidentiary provision that may have been breached. However, the SC stated that having the mandatory ship inspection certificates constitutes a rebuttable presumption that the ship was in an acceptable maintenance condition. Nevertheless, that presumption was clearly undermined by the excessive delay experienced in that voyage, which should normally take between 14-18 days according to the expert reports, while in reality it took in total 61 days and 10 more days for discharge. Furthermore, the fact that only one part of the cargo was affected by humidity to the point of degradation, is by no means compatible with the obligation of diligent care, custody and management of the cargo required to the carrier’s personnel in order to be released from liability for damage according to art 8.a of the LCGS 1949 (arts 3.2 and 4.2.a of the Hague Rules).

The plaintiff argued a violation of art 14 of the Maritime Liens and Mortgage Convention of 1926 (MLM Convention 1926), which was ratified by Spain on 2 July 1930. It complained that the lower court considered that there was no maritime lien against the ship for the compensation even where the shipowner had been ordered to pay such amount. The plaintiff contended that, although art 14 of the MLM Convention 1926 states that it applies when the ship belongs to a contracting State, it must be applied to all international cases in order to prevent fraud in ship sales. Based on two previous decisions, the Supreme Court reaffirmed that the MLM Convention 1926 is only applicable when the vessel to which the claim relates belongs to a contracting State. The ship was flagged in Cyprus and there was no evidence that that country had ratified the MLM Convention 1926.

The plaintiff further argued that in the absence of evidence of the national law of the flag State, the MLM Convention 1926 must be applied as the only applicable law, according to art 96 of the Spanish Constitution. The SC stated that the incorporation of the MLM Convention 1926 into Spanish law meant that it must give effect to each and every one of its provisions, including art 14 that defines the scope of application of the Convention. Applying the plaintiff's argument might result in the undermining of the ultimate goal of the Spanish State, which is the establishment of a reciprocal framework with other contracting States.