The vessel SS Jeff Davis, owned and operated by the plaintiff, was on a voyage from New Orleans, US, to Europe carrying, among other things, a cargo of sodium hydrosulfite. Sodium hydrosulfite was classified in the relevant regulations as a hazardous flammable solid that must be kept dry and stowed below deck in metal drums only, separately from flammable gases, liquids, oxidising material, or organic peroxides.

Nine hundred and seventeen metal drums of sodium hydrosulfite were packed by their manufacturer, Virginia Chemicals Inc. They were labelled, among other things, with a 'FLAMMABLE SOLID' label. Southern Railway Co transported the cargo to the plaintiff's terminal in New Orleans, US, under bills of lading that contained the following notation: 'FOR INSIDE STORAGE ONLY'. A company acting under the plaintiff's orders discharged the barrels in New Orleans, where the drums were palletised for shipment on the vessel. The plaintiff's dock receipt showed that 700 of the drums were stored under 'open wharf' conditions, which was a large, uncovered parking lot-type storage yard. The plaintiff learned of this outside storage either on the day the drums were received or the following day. The cargo remained on 'open wharf' unprotected from its arrival in New Orleans until it was loaded onboard the vessel for almost four weeks.

Two of the 917 drums were damaged before the rest were loaded into the No 6 lower hold of the vessel. Cargo of sodium hydrosulfite was stowed skin to skin, forward in the No 6 lower hold. Behind the cargo of sodium hydrosulfite was a cargo of palletised polyken pipeline protective outwrap tape stowed skin to skin also. It was virtually impossible to see the cargo of sodium hydrosulfite after the tape was loaded.

After the cargo operation was completed in New Orleans, the vessel sailed for Montreal, Canada, to take on additional cargo. Additional cargo was loaded in the No 6 lower hold, the No 6 tween deck, and deck cargo atop the No 6 hatch. Nine tractors, each weighing in excess of 45 tons, were loaded in the vicinity of the No 6 hatch. It would have been impossible to remove any cargo from within the No 6 hold while at sea.

Following the completion of the cargo operation in Montreal, the vessel sailed for Leningrad, the USSR. The next day, a fire was discovered in the vessel's No 6 hold. The vessel was diverted to Quebec, Canada. The vessel did not resume its voyage until all the sodium hydrosulfite and the rest of the damaged cargo had been removed. Clause 15 of the bill of lading issued by the plaintiff provided that general average shall be adjusted according to the York-Antwerp Rules 1974 and matters not therein provided for, according to the laws and usages at New York.

According to the general average adjuster from New York who testified in this matter, he was not concerned with liability or fault when preparing the general average statement. The rules allowed the interested parties to determine liability and/or fault at a later date.

A general average bond was furnished in order to have cargo released from the lien asserted by the plaintiff as a result of the general average declaration made subsequent to the fire. The plaintiff brought action against general average insurer and others for damages caused by fire aboard the vessel.

Held: Claim dismissed.

The rights and liabilities of the parties were governed by the Carriage of Goods by Sea Act, 46 USC 1301 ff (COGSA); the Fire Statute, 46 USC § 182; general maritime law dealing with general average; and the bills of lading which, among other things, incorporated the York-Antwerp Rules 1974. Rules D and E of the York-Antwerp Rules 1974 provided:

RULE D
Rights to contribution in General
Average shall not be affected, though the event which gave rise to the sacrifice or expenditure may have been due to the fault of one of the parties to the adventure, but this shall not prejudice any remedies or defences which may be open against or to that party in respect of such fault.

RULE E
The onus of proof is upon the party claiming in General Average to show that the loss of expense claimed is properly allowable as General Average.

The COGSA fire exemption (unless caused by the actual fault or privity of the carrier) and the Fire Statute exemption (unless … caused by the design or neglect of such owner) were the same as they affected this matter.

Violation of the regulations dealing with the carriage of hazardous material constituted negligence on the part of the plaintiff, which proximately caused or contributed to the fire. Proximate cause in negligence included a contributing cause and was not limited to the sole inducing reason for the damage.

The cargo of sodium hydrosulfite was well packed and properly and adequately labelled by its manufacturer. The fire was caused because of the improper stowage, improper handling, and failure to inspect and otherwise handle the cargo as required by the relevant regulations. The improper stowage of the cargo of sodium hydrosulfite was known to, planned by, and acquiesced in by the plaintiff through actions of its managing officers or agents, who were in charge of the stowage and the cargo layout department.

The plaintiff accepted the cargo of sodium hydrosulfite, knowing that it is a chemical which catches fire when it comes into contact with water. Having done so, it accepted the obligation to carry the cargo safely.

The plaintiff, by stowing the cargo of sodium hydrosulfite in the No 6 lower hold and then walling in the cargo with palletised tape, in no way complied with the relevant regulations. These actions by the plaintiff were negligent and rendered the vessel unseaworthy.

In this case, there was no direct proof as to the cause of the fire, which was often the case when damage results from a fire, simply because of the difficulties inherent in determining the real source. However, the cause of a fire can be ascertained through the facts and circumstances surrounding the incident viewed in light of common experience. The plaintiff's negligence in improperly handling and improperly stowing the hazardous cargo proximately caused the fire in question.

The plaintiff was guilty of fault and therefore precluded from recovering on its claim for general average and from exemption under the Fire Statute and COGSA.