The plaintiffs are the owners of 10,848 metric tons of channels (U-shaped steel beams), and the holders of the relevant bill of lading, to whom the goods were eventually delivered in September 1993 at Zhanjiang, China. They claim damages on the ground that the defendants, as carriers, had in breach of an implied term neglected to proceed with reasonable despatch and without unjustifiable delay.

The discharging ports for the two lots of cargo were agreed by all parties concerned to be the port of Zhanjiang in respect of the plaintiffs' channels and the port of Fangcheng in respect of another consignment of steel bars. The change of the port of discharge to Zhanjiang was initiated by the plaintiffs because the port of Beihai was congested; the defendants agreed to the change on certain terms, including the payment of additional freight to cover the additional distance. The other significant fact was this: it eventually emerged that contractually the first port of call was Fangcheng to discharge the consignment of steel bars. The intended schedule was for the vessel to discharge the steel bars in Fangcheng after which the vessel was to sail south round the island of Hainan and thence northwards to the port of Zhanjiang to discharge the plaintiffs' channels. Most unfortunately, there was a prolonged congestion at the port of Fangcheng.

Held: Plaintiffs' claims dismissed with costs.

The bill of lading governing the relationship between the plaintiffs and the defendants was on the Congenbill form used together with charterparties. Certain terms of the charterparty were incorporated into the bill of lading. Under the voyage charterparty, the discharge of the cargo was to be arranged by the shippers, charterers or the receivers of the cargo and not the defendants: see box 15 and cll 5, 19 and 28 of the charterparty. It was not seriously challenged by the plaintiffs that the owners had the option to call and the vessel did call at Fangcheng first. Under the charterparty, duly incorporated into the bill of lading, the charterers, their agents, shippers or receivers of the cargo were obliged to arrange and pay for the discharge. Any of these parties, including the receivers of both the Fangcheng and Zhanjiang cargoes, would have to give instructions to the defendants as the carriers regarding the discharge of the cargoes. The bill of lading was also marked 'CNF FO', which expression meant that the discharge of the cargo was 'FREE OUT' or free of expenses to the carriers. The bill of lading under which the plaintiffs are claiming as endorsees expressly incorporated the Hague Rules. Article 4.2 thereof provides as follows:

Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from:

(i) Act or omission of the shipper of the goods, his agent or representative; ...

(q) Any other cause arising without the actual fault or privity of the carrier.

A carrier should reasonably anticipate any cause of delay and guard against its impact on the carriage of the cargo. A carrier is not excused from liability for the consequences of an event which could be expected. Lord Porter stressed the objective test of reasonable anticipation in Monarch Steamship Co Ltd v Karlshamns Oljefabriker (A/B) [1949] AC 196, 215. A carrier is therefore under a duty to exercise reasonable anticipation by addressing the facts and considering their impact on its duty to carry and deliver the goods with reasonable despatch. Thus, if there is a strike at the port of discharge or a blockade at an intermediate port, the carrier should not call at that port. In Crelinsten Fruit Co v The Mormacsaga [1969] 1 Lloyd's Rep 515 it was held in the circumstances of that case that it was not reasonable for the carrier, who knew the port of discharge was strikebound, to call at the port presuming that the strike would end within a short time.

Another example of a carrier's duty to act with reasonable anticipation is Dunn v Bucknall Bros [1902] 2 KB 614. In that case, the carrier with 'carelessness' took on board cargo when there was reasonable and probable cause that the ship would be seized because the goods were destined for an enemy alien. The ship was seized and the owners of other cargoes on board suffered damages by reason of the delays caused by the temporary arrest of the ship. The carriers were found liable and in breach of their duty to the other cargo owners. The Court of Appeal concluded the carrier was liable even if they had a well-founded hope of being able to give such explanations to the authorities as would avoid the condemnation of the vessel. It was also noted that the carrier was well aware of the risks involved, having put in an exemption clause in the bill of lading of the cargo destined for an enemy alien, and they took the risks without the knowledge and consent of the other shippers.

Whether a particular carrier had acted with reasonable anticipation in guarding against delay is a question of fact and it depends on the circumstances in each case. Even the onus of the duty varies: if the cargo is perishable, the higher must be the vigilance in the avoidance of delay. This is not to say that if the cargoes are steel products, a carrier can let its guard down and perform the contract of carriage with relaxed casualness. It has to pass the bar of reasonableness in the anticipation and avoidance of delays.

The plaintiffs knew that the Dona was proceeding to Fangcheng first. The plaintiffs also knew that there was congestion at the intermediate port of Fangcheng, certainly when they agreed to buy the cargo and accept the bill of lading as endorsees in respect of the Zhanjiang cargo of channels. The plaintiffs and the sellers and buyers of the Fangcheng cargo were closely related. Under those contractual arrangements, it was agreed by all parties, including the plaintiffs when they accepted the bill of lading duly endorsed, that the Dona would first call at the port of Fangcheng in the full knowledge that there was congestion at that port. All parties, including the plaintiffs, accepted the delays due to the congestion.

The defendants were not at all negligent in sailing for Fangcheng. They did not fail to anticipate like a reasonable and responsible carrier. The defendants had sent the vessel there like the owners of other carriers; all queued up for their turn to berth. And the plaintiffs knew of the congestion in the intermediate port and had in effect accepted it. The defendants were therefore obliged to discharge goods in a port congested with traffic. Their duty was to take adequate care of the plaintiffs' cargo and wait out the delays before proceeding to Zhanjiang. They could not overcarry or tranship the plaintiffs' cargo or deliver them at another convenient port. If the defendants had taken any of these steps, they could probably be faced with a claim of deviation and would probably be exposed to absolute liability, without limitation, for any delay. In the result, the plaintiffs have not proved that the defendants were liable for unjustifiable delays. The delays at Fangcheng could not be reasonably anticipated and avoided and could not have been overcome by the taking of reasonable steps.