This case involved carriage by sea of three consignments of cargo in containers from ports in Asia to ports in Africa under bills of lading issued by Nile Dutch Africa Line BV (Nile Dutch). During a voyage of the APL Austria, a fire broke out and the consignments on board were lost. The cargo insurers, who claimed to be subrogated in the rights of the bill of lading holders, claimed damages for the lost cargo. The fire started in one or more of three other containers, which were also carried under Nile Dutch bills of lading. The Chinese shippers declared that these three containers contained (harmless) calcium chloride, but this turned out to be incorrect. The three containers contained dangerous cargo, possibly calcium hypochlorite. The Court of first instance dismissed the insurers' claims. The insurers appealed.

Held: Appeal dismissed. First instance judgment upheld.

It is not disputed that the claims must be considered on the basis of the Hague-Visby Rules, and that Dutch law is additionally applicable.

Nile Dutch does not dispute that it has failed in the performance of its obligation under the contract of carriage by not delivering the cargo in the same condition as it was received. The dispute between the parties is focused on the question whether Nile Dutch may successfully rely on the fire exception of art 4 of the Hague-Visby Rules, and more particularly on the question whether the fire on board the APL Austria was caused intentionally or by the actual fault or privity of Nile Dutch.

From the viewpoint of smooth commerce and practical efficiency alone, the starting point must be that a carrier must be able to trust the correctness of the description of the goods which the shipper provides regarding the goods it offers for carriage. But specific circumstances may entail that the carrier may not rely on the accuracy of that description. Such circumstances are not present in this case. The Chinese containers were booked for carriage with Nile Dutch by Sinotrans Tianjin Container Co (Sinotrans), a freight forwarder of good standing. In the booking the cargo was described as calcium chloride. Further, in its bill of lading instructions Sinotrans stated the contents of the barrels to be ('SAID TO CONTAIN') 'CALCIUM CHLORIDE'. Calcium chloride is a specific description of a substance which is harmless (for carriage). Nile Dutch has explained during the hearing that it maintains specific procedures when dealing with dangerous goods, and calcium hypochlorite in particular, but that according to those procedures there was no reason to open the Chinese containers and check their contents.

In the absence of specific circumstances entailing that Nile Dutch could not rely on the accuracy of the shipper's description of the goods, the mere fact that under the bill of lading terms Nile Dutch had the possibility (the authority) to open and check the containers cannot lead to the conclusion that Nile Dutch had an obligation to do so.

P&I Clubs have issued warnings in general terms in the past regarding the possibility that calcium hypochlorite is offered for carriage under another description. However, it does not follow from this that Nile Dutch should have done more, or differently, in this case with regard to the cargo booked by Sinotrans as calcium chloride, and/or that Nile Dutch had wrongly failed to discover the fraud in time, and that it can be blamed for that to such an extent that it cannot rely on the fire exception.

At the hearing, the insurers also argued that Nile Dutch had not exercised due diligence in making the APL Austria seaworthy (within the meaning of art 4.1 of the Hague-Visby Rules and art 8:381(1)(a) of the Dutch Civil Code). This argument was made by insurers at too late a stage in the proceedings, so it must be disregarded in view of Nile Dutch's objection. Merely obiter, the Court considers that accepting the cargo booked by Sinotrans, and not opening the containers in this case, are not to be regarded as a breach of that particular duty of care.