After insuring with the plaintiff insurer, the UK shippers sent a consignment of 1,108 bales of synthetic fibre weighing 199,828 kgs to Karim Cotton Mills Ltd (the consignee). The consignment was loaded on board the defendant carrier's vessel. Subsequent to the arrival of the vessel at Karachi the consignment was discharged into the care and custody of the Karachi Port Trust as statutory bailee. The consignment was not discharged directly on land but onto a lighter/barge and while it was still on the barge, it caught fire and about 312 bales were burnt. On the basis of a joint survey, the loss of the consignee was assessed at PKR 359,425.48, which the plaintiff paid against a letter of subrogation. Thereafter, the plaintiff lodged a claim against the carrier and its local agent. The defendants denied liability on the ground that they were not responsible under the Carriage of Goods by Sea Act 1925 (the Act) for damage caused by fire and, further, because the damage was not caused on their vessel but on the lighter/barge. They claimed that the moment the consignment was discharged from the vessel into the lighter/barge their liability came to an end.

Held: Plaintiff's suit dismissed.

The relevant provisions in the bills of lading clearly provide that as soon as the consignment is transferred from the vessel into, amongst other places and vessels, a lighter or hulk, such transfer/discharge shall be considered 'due delivery' of the consignment. No doubt the lighter/barge, belonging to Naseer Ahmad & Co, was hired by the carrier's local agent for transhipment of the cargo from the vessel to the shore. The consignments, however, remained in the barge for nearly a week and during this period it was in the custody of the carrier's local agent, which cannot escape liability for the damage during this period.

However, in this regard the Court was referred to art 4.2.b of the Schedule of the Act which provides that neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from fire, unless the fire is caused by the actual fault or privity of the carrier, which means that the carrier's local agent shall be responsible for the damage only if the fire was the result of its actual fault or privity. Counsel for the plaintiff pointed out that art 3.2 enjoins upon a carrier to properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried, but this reference was not relevant because per cl 16 of the bill of lading the 'discharge' of cargo stood completed on the transfer of the cargo to the barge.

In short, the carrier, and especially its local agent, can be responsible for the damage only if it were shown that the fire was due to its fault as per art 4.2.b of the Schedule to the Act. Counsel for the plaintiff claimed that the onus to prove that they were not at fault lay on the defendants. I do not agree with counsel. The onus to prove the fault of the defendants must lie on the plaintiff, and when it was pointed out to counsel for the plaintiff, he claimed that the plaintiff had discharged this onus. However, the evidence has not established that the defendants were at fault. The plaintiff considered it negligent that the defendants countenanced the discharge of the consignment through a barge rather than at the berth. However, they had no option. It is the usual practice at Karachi harbour, of which judicial notice can be taken, that when the Karachi Port Trust cannot provide a berth to a ship, it discharges its cargo through lighter barges. Adoption of this practice by the defendants does not amount to negligence or 'fault'. If the consignment had fallen into the sea or been otherwise damaged while under transfer from the vessel to the barge or while under movement in the barge, the defendants' liability could have arisen, but here the fire broke out when the consignment was lying securely wrapped in the barge. It goes without saying that it was against the pecuniary interest of the defendants to keep the consignment in the barge since they had been paying hiring charges for the barge, but they were keeping the consignment in the barge due to force of circumstances as the Karachi Port Trust had failed to provide any shed to them to unload the consignment from the barge.

The plaintiff insurance company could have recovered the loss from the defendants if the negligence of the defendants had been proved, but since it has not been proved, the plaintiff shall have to bear the loss.