Cargo carried on the Galliano Gennari was thrown into the sea after the ship was stranded. The first instance Tribunal ordered the master Berti to pay compensation for cargo damage to the shipper Fenzo for extra-contractual liability, allowing for the enforcement of both contractual and extra-contractual actions against the shipowner and carrier Ditta U Gennari (DUG) and the master respectively.

DUG appealed against the decision, arguing that Fenzo's rights were time-barred under the Italian Code of Navigation and that it was exempt from liability for the fault of the master under art 4.2.a of the Hague Rules. The issue was whether the six-month time bar under the Italian Code of Navigation or the five-year time bar from the incident causing the damage under the Italian Civil Code applied. The Court of Appeal upheld DUG's argument regarding the barring of Fenzo's rights, and held that it was impossible to exercise both contractual and extra-contractual actions unless the damage also constituted a criminal act.

Fenzo appealed in cassation, invoking DUG's contractual liability and, if the Court did not find it, its extra-contractual liability.

Held: The appeal is dismissed.

The Court emphasised that the decision of the Court of Appeal was correct as to the content, but the reasoning had to be revised. The exclusion of the concurrence of contractual and extra-contractual liability of the carrier for faults of its auxiliaries is based on the parties affected by the effects of the damage, namely third parties or parties to the contract of carriage. In the case of damage suffered by third parties, the carrier is liable in both contract and delict/tort. This would not be the case if the damage were suffered by the other party to the contract of carriage, as the excepted peril of nautical fault under art 4.2.a of the Hague Rules applies. The Court recalled that under art 4.2.a of the Hague Rules:

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

(a) Act, neglect, or default of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship.

The Court also recalled that since its introduction in the 1893 Harter Act as a reaction to the widespread use of exoneration clauses of carriers' liability in Anglo-Saxon practice, the exemption of liability of nautical fault concerned the carrier and the ship. The carrier's and ship's liability for loss of or damage to the goods was also considered incapable of being amended by the parties' agreement. On the other hand, an exemption of liability was provided in cases of 'excepted perils', considered specific risks of navigation, where the determination of the carrier's fault would have been difficult to assess, such as an act of war under art 4.2.e of the Hague Rules and other events of force majeure.

These principles were upheld in the 1921 Hague Conference and the Hague Rules and approved at the International Conference of Maritime Law held in Brussels. Finally, they were translated into Italian domestic law. The Court also pointed out that the carrier must make the ship seaworthy, but it cannot be held liable for mistakes and the nautical fault of the crew, which it cannot control.