The plaintiff/appellant claimed compensation from the defendants/respondents for goods on the M/S Víkartindi, which ran aground on 5 March 1997 in Háfsfjörður. A bill of lading had been issued for the transport.

The Reykjavík District Court found that this case sought to interpret art 68 of the Shipping Act/Siglingalög No 34/1985 (the Act) [cp art 4 of the Hague-Visby Rules]. The comments on the bill stated that its content was in accordance with arts 4.1 and 4.2 of the Hague-Visby Rules. The main principle of art 4.1 on the liability of the carrier is the rule of probability. The carrier is not liable, in addition to other possible grounds, if it proves that the damage or loss resulted from the causes listed in art 4.2.a-p. The defendants argued under art 4.2.a that the damage resulted from oversight or negligence in the management or handling of a ship on which the master, crew, or others performing work on behalf of the ship, occurred, and under art 4.2.c that it resulted from dangers or accidents that are characteristic of navigation. Article 4.2.a is an exception to the general rule of the master's liability. According to art 4.3, a carrier cannot rely on the exceptions under art 4.2, unless it proves that unseaworthiness was not the result of it, or someone for whom it is responsible, failing to exercise reasonable care to ensure that the ship was seaworthy at the commencement of the voyage.

The Víkartindur was seaworthy at the start of the voyage, ie from Þórshöfn. The failure that occurred when the waste pipe broke apart was due to subsequent metal fatigue caused by the vibration of the ship. Due to a mistake during the repair, a second failure occurred, this time in the low-temperature coal-air cooler. The chief engineer made a mistake by not stopping the engine while it was being worked on. However, the mistakes of the chief engineer and the master do not indicate their incompetence to the extent that the ship was therefore unseaworthy at the start of the voyage, as it was clear that normal vigilance or, in other words, due diligence had been demonstrated.

The weather or sea conditions were not worse than might have been expected for the time of year and the location. The stranding, following a minor engine failure 13 hours earlier, was thus not an inevitable or probable consequence of the weather conditions.

It is clear from the evidence in the case that the captain, Michael Barz, was subsequently guilty of multiple oversights and showed gross negligence in the management and handling of the Víkartind on that fateful day, in a manner that was in no way consistent with good sailing and seafarership practices and skills.

Accordingly, with reference to art 68.2.a of the Act [cp art 4.2.a of the Hague-Visby Rules], the defendants should be acquitted of the plaintiff's claims.

The plaintiff appealed to the Supreme Court.

Held: The judgment of the District Court is confirmed.

The appellant's submission is based on the fact that the exemption provision in art 68.2.a of the Act does not apply 'where the errors that may have been made relate primarily to the ship's cargo, including the appellant's goods'.

On 5 March 1997, the ship, crew and cargo were in common peril. The appellant has not shown that the negligence which led to the maritime damage was specifically directed at the ship's cargo or its care. Having regard to the above, regarding the appellant's loss being attributable to negligence and carelessness in the operation and handling of the ship, the appellant's plea in law must be rejected.

Although the conditions of art 68.2.a of the Act are met, this does not relieve the carrier of liability if it is proven that damage has been caused by the unseaworthiness of the ship, which is a consequence of the carrier or someone for whom it is responsible not having exercised reasonable care to ensure that the ship was seaworthy at the start of the voyage, as stated in art 68.3 of the Shipping Act. The conditions of this provision must be assessed independently. Here, the expert evidence shows that the Víkartind's stranding cannot be attributed to the ship being unseaworthy at the start of the voyage.