Simplot Canada Ltd (Simplot) produces fertiliser, and purchased a converter basket from the US company Haldor Topsøe Inc, owned by Haldor Topsøe A/S (collectively Haldor Topsøe). The basket was purchased from the manufacturer in Soissons, France, and Simplot wanted it transported to Canada, where it was to be used at Simplot's factory in Brandon, Manitoba. Simplot asked Haldor Topsøe to assist in arranging transport. Air Cargo Express A/S (ACE) undertook to transport the goods by road from Soissons to Antwerp, Belgium, and from there by ship to Montreal, Canada, and from there by rail to Simplot in Brandon. ACE issued a negotiable FIATA combined transport bill of lading 'as carrier' on 22 October 1999, in which Haldor Topsøe was listed as the sender and Simplot as the recipient. The goods were transported as deck cargo on the Federal MacKenzie, and the question in this case was whether ACE was entitled to do so, and whether it was responsible for the loss of the basket, which was washed overboard in a storm in the North Atlantic.

Simplot argued that an agreement had been reached between the parties for transport below deck. Since the goods were transported as deck cargo in violation of this agreement, the carrier was liable for the loss pursuant to s 284(1) of the Merchant Shipping Act, which corresponds to art 9 of the Hamburg Rules. The loss was solely a consequence of the transport on deck, so there was no right for the carrier to limit its liability: see s 284(2) of the Merchant Shipping Act. ACE had not met its burden of proof under ss 274(1) and 275(1) of the Merchant Shipping Act, that the loss of the goods was not due to fault or negligence on the part of ACE, or on the part of anyone for whom ACE was liable (art 4.2.q of the Hague-Visby Rules).

ACE denied that it had entered into an agreement to load the basket below deck. ACE's offer of 7 September 1999 did not expressly state that the goods would be transported below deck, and with the price offered and the circumstances in general, Simplot could not have had any expectation that transport would take place below deck. According to the bill of lading, ACE had the right to choose loading on deck. Regardless of what had originally been agreed, Haldor Topsøe had also, on behalf of Simplot, accepted that the goods would be loaded on deck. The goods were thus transported on deck in accordance with the parties' agreement to that effect. There was therefore no basis for imposing strict liability on ACE pursuant to s 284 of the Merchant Shipping Act, nor was there any basis for liability pursuant to s 275 of the Merchant Shipping Act, as the inspectors and assessors made no reasonable or justified criticism of the loading on the basis of the conditions prevailing at the time of loading.

Held: ACE must pay Simplot SDR 109,800 with interest.

The offer made by ACE on 7 September 1999, in response to Haldor Topsøe's invitation to make an offer on 12 August 1999, did not expressly state that ACE's offer to transport the converter basket was based on transport as deck cargo. However, the freight quotation summary sent by Haldor Topsøe to Simplot on 8 September 1999 reviewed the tenders received in order to allow a comparison of the transport services and prices offered. After this review it must have been clear to Haldor Topsøe - who had previously had to send similar heavy goods as deck cargo - and Simplot, that ACE's offer did not concern transport below deck, but rather transport that could also take place on deck. The offers in the review (from International Combifragt and from Transocean), which explicitly described the transport service as transport under deck (ro/ro), were far more expensive than the offers (from the same carriers) which did not describe the transport service in more detail.

Haldor Topsøe and Simplot were also informed by ACE's fax of 6 October 1999, and the attached schedule, that the goods were 'subject to deck loading', which Haldor Topsøe and Simplot did not protest. Furthermore, a representative from Haldor Topsøe watched the loading of the goods without objecting to their being loaded on deck. The FIATA combined transport bill of lading did not include an express provision on the right to load on deck. However, cl 11 [12?] of the Standard Conditions meets the requirement of stating in the bill of lading that the goods must or can be transported on deck, which is provided in the Merchant Shipping Act, s 263(2), in conjunction with art 9.2 of the Hamburg Rules.

The transport of the goods on deck was thus not in conflict with an express agreement on transport under deck, and ACE is therefore not liable pursuant to s 284 of the Merchant Shipping Act, or deprived of limitation of liability pursuant to Part 13 of the Merchant Shipping Act.

ACE should have ensured better lashing of the deck cargo. As ACE has not proved that neither ACE nor anyone for whom ACE is liable caused or contributed to the damage, ACE is liable: see s 275(1) of the Merchant Shipping Act. However, Haldor Topsøe has also shown some negligence that contributed to the damage, by not supplying the goods with sensible fastening elements.