The case concerned carriage under a bill of lading of a consignment of monoammonium phosphate (MAP), property of Kidde, from Morocco to Mexico on board the merchant ship Harns, owned by the shipping company appellants (shipping company). Kidde concluded a voyage charter agreement with Candler Schiffart GmbH, which in turn concluded a voyage charter agreement with the shipping company. Except for the rate of freight and demurrage, both agreements were on the same terms, including a choice of English law. The Harns ran aground at Silver Bank off the coast of the Dominican Republic. As the Harns was unable to refloat itself, it requested the assistance of Svitzer Salvage. Svitzer Salvage decided to jettison 800 mt of MAP, after which the Harns was refloated with the help of a tugboat and escorted to the port of Mazanillo in Mexico. After repairs there, the voyage was continued. Upon arrival at the destination of Altamira, Mexico, part of the cargo was found to have become wet. Based on the master’s bill of lading – on the ‘Congenbill Edition 1964’ form containing a reference to the Hague Rules – the shipping company was held liable by the cargo interests for damages, including loss of and damage to cargo and the (possible) contributions in salvage and general average as declared by the shipping company, both of which were regarded as depreciation of the value of the cargo. The court of first instance allowed the claim for damages. 

Held: In the absence of a valid choice of law, the applicable law must be determined on the basis of art 4 of the Convention on the Law Applicable to Contractual Obligations (Rome Convention 1980). The applicable law is that of Mexico, including the Hague-Visby Rules incorporated therein, as being the law of the country (of the agreed port of discharge) with which the contract is most closely connected: (a) the most important obligation of the carrier – the delivery of undamaged cargo – manifests itself in the port of discharge; this dispute being about liability entailing from that obligation; (b) the choice for the law of the port of discharge conforms with the last sentence of art 5.1, EU Regulation (593/2008) Law Applicable to Contractual Obligations (Rome I) which replaced the Rome Convention 1980 on 17 December 2009, only months after the incident in question.

The arguments for applying the law of the port of discharge outweighed the arguments put forward by the cargo interest for applying the law of Morocco (Hamburg Rules; no exception for error in navigation) as the law of the port of loading (i.e. place of loading, place of issue of the bill of lading, and location of the ship when the route was planned or should have been planned) in line with the judgment of the Hoge Raad (Dutch Court of Cassation) in the matter of the Katsedijk. Some other arguments may be added to the arguments for applying the law of the port of discharge already put forward in the judgment of the court of first instance: (a) the lawful and regular bill of lading holder Kidde resides in Mexico; (b) the goal pursued by the cargo interests, namely to exclude application of the Hague Rules and Hague-Visby Rules because of the error in navigation exception contained in these Rules, does not go well together with (i) the fact that the bill of lading, on the basis of which they claim damages, refers to the Hague Rules and (ii) the circumstance that the ‘voyage charterparty’ as concluded by Kidde contains a choice for English law, which choice also implicates the applicability of the Hague-Visby Rules to that voyage charter agreement. Conforming to that regime, which also applies to the voyage charter agreement as concluded by the shipping company, is preferred.

The shipping company cannot rely on the defence of error in the navigation of the ship.

First of all, the duty to provide a seaworthy ship entails the duty to make sure that adequate and up-to-date nautical charts and publications are available on board prior to an intended voyage. And as the duty of seaworthiness rests on the carrier, it is his responsibility to provide the ship with said documentation. Furthermore, nautical chart no BA3908 of the Silver Bank area contained three indications ‘Inadequately Surveyed’ and sailing through the Silver Bank area was strongly discouraged (due to the many shallow spots and rocks). This raised the immediate question of how it is possible that a master purposely and not by accident, chose to adopt a route through this dangerous area. A related question is whether the master had any access to that information and/or some other adequate and up-to-date nautical charts and nautical publications. The shipping company merely stated – by way of unsubstantiated argument – that the Harns had an up-to-date electronic chart system, which included the required charts. It was up to the appellant when relying on the error in the navigation defence, and in any case when refuting the cargo interest’s allegation of unseaworthiness, to provide well argued and documented clear evidence about inter alia the nautical charts and publications that were available to the master of the Harns. 

After weighing the parties’ arguments and the information from the submitted reports it was concluded (i) that there was reason to assume that the nautical documentation on board of the Harns was not in order prior to the voyage, meaning that the seaworthiness obligation had not been complied with and (ii) that the evidence to the contrary as brought forward by the appellant is not sufficient to refute that assumption. The Harns was to be held unseaworthy because of the shipping company's failure to satisfy that duty of diligence. This unseaworthiness, (in any case) existing in a failure to provide adequate and up-to-date nautical documentation prior to the voyage, must be held to be the cause of the ship running aground. It was not apparent that, if the shipping company had complied with its duty of diligence in relation to the seaworthiness, the master of the Harns would have chosen to adopt the same unsafe route. For that reason alone, the invocation of the error of navigation defence of art 4.2 of the Hague-Visby Rules by the shipping company fails.

If an error is made in the planning of a route, relying on the defence of error in navigation is not immediately impossible or unacceptable. Whether relying on the defence will be successful or not, will depend on the specific circumstances of the case, such as the involvement of the shipping company in the choice of a particular route. If a wrong choice is the result of inadequate diligence for the seaworthiness before and at the beginning of the voyage, non-compliance with the duty of diligence cannot be averted by invoking the error in navigation defence.