On 4 July 2009, passengers of the cruise ship, Marco Polo, who made their booking through tour operators, departed Tilbury to start their holidays. Head charterers, Marco Polo Chartering Limited (head charterers), time chartered the Marco Polo to Transocean Tours Touristik Gmbh (Transocean), a cruise and tour company based in Bremen. The head charterers held a policy of insurance (the policy), a liability policy which has its slip providing for the cover for charterers liability in indemnifying the assured in respect of losses, costs and expenses which also engages the 2009 UK Club Rules (rule 2(C) provides for the liabilities to passengers). The policy was undersigned by lead underwriter, Navigators Underwriting Agency Limited (the lead underwriter). Transocean entered into a General Sales Agency Agreement (GSSA) with Cruise and Maritime Services International Limited (the claimant) dated 27 July 2007. The claimant was also named as a co-insured in the policy.

On or around 6 July 2009, there was an outbreak of norovirus on the Marco Polo and the voyage had to be curtailed, affecting the passengers significantly.

The claimant incurred liabilities to the passengers in respect of personal injury and ‘ruined holidays’. In turn, the claimant claimed an indemnity against these liabilities from the lead underwriter and all the underwriters subscribing to the policy, namely the members between April 2009 and April 2010 of 7 Lloyd’s syndicates (collectively, the defendant).

The Athens Convention relating to the Carriage of Passengers and their Luggage by Sea 1974 (Athens Convention 1974) applied in the United Kingdom via Carriage of Passengers and their Luggage by Sea (Domestic Carriage) Order 1987, and before amendment by the 2002 Protocol to the Athens Convention 1974.

Article 1.1.a of the Athens Convention 1974 defines a ‘carrier’ as ‘a person by or on behalf of whom a contract of carriage has been concluded, whether the carriage is actually performed by him or by a performing carrier’.

Article 1.2 of the Athens Convention 1974 defines a ‘contract of carriage’ as ‘a contract made by or on behalf of a carrier for the carriage by sea of a passenger or of a passenger and his luggage’.

The judge considered and decided three main issues in this claim. First, whether the claimant is considered to be a contracting carrier under the Athens Convention 1974 (contracting carrier issue). Second, whether the liability relied on by the claimant falls within ‘losses, costs and expenses incurred by Charterers’ (liability issue). Third, whether the claimant did actually compensate the passengers (compensation issue).

Held: The claimant’s claim failed.

For the contracting carrier issue, the judge held that there was no contractual relationship between the claimant and the passengers and the claimant was not considered to be a contracting carrier. The contract was between the tour operators and the passengers which contained terms with wordings such as providing a cruise (rather than merely arranging a cruise) (emphasis added). Hence, the judge was of the view that the passengers’ claim, including those under the Athens Convention, lay against the tour operators.

For the liability issue, the judge was of the view that the liability relied on by the claimant could not fall within ‘losses, costs and expenses incurred as Charterers’ as the claimant was not the charterer of the Marco Polo. Transocean did not hire out the Marco Polo to the claimant. The arrangement under the GSSA was that Transocean appointed the claimant as general sales agent to market cruises on the Marco Polo and the claimant appointed tour operators who would contract with passengers.

For the compensation issue, the judge was not satisfied that the claimant compensated the passengers. The judge was of the view that the claimant compensated the tour operators for preservation of commercial relationship and reputational reasons. The tour operators in turn made the compensation available to the passengers.