Deck Cargo Exclusion Clauses: The Elin

A recent decision in the English Courts concerns the effectiveness of a clause in a bill of lading that excludes a carrier’s liability for loss or damage to cargo carried on deck.

In this case, The Elin loaded 201 packages of project cargo for carriage from Thailand to Algeria. The front of the bill of lading stated:

“70 pckgs… loaded on deck at shipper’s and/or consignee’s and/or receiver’s risk; the carrier and/or Owners and/or Vessel being not responsible for loss or damage howsoever arising”. 

There was a similar term on the back of the bill of lading.

During the voyage the vessel encountered heavy weather and some of the deck cargo was lost or damaged. Cargo interests claimed the shipowner had failed to care for the deck cargo or, alternatively, had failed to exercise due diligence to make the ship seaworthy at the commencement of the voyage due to inadequate lashings and stowage. 

Exception Clauses

The Court was asked to consider, as a preliminary issue, whether the exceptions clauses in the bill of lading were sufficient to exclude liability for loss or damage caused by negligence or unseaworthiness. 

The owner raised previous legal cases (including The Imvros) to the effect that, where exclusionary words in a bill of lading are clear, then they mean what they say. They argued that the Court should not re-write the contract to give a different meaning to an exclusion clause. 

Cargo interests argued that for it to operate in this case, exceptions clauses must specifically refer to liability for unseaworthiness or negligence. Cargo interests suggested The Imvros should not be applied because that decision had been forcefully criticised by academics and because the Singapore courts had decided it was wrong.

The Judge in The Elin rejected the criticisms of the decision in The Imvros. The phrase “howsoever arising” is, the Judge said, the “classic phrase” used to exclude liability for negligence and unseaworthiness. 

The shipowner was therefore not liable for any loss or damage to any cargo carried on deck, including loss or damage caused by negligence and unseaworthiness.

North View

This is a very useful decision for shipowners who routinely carry cargoes on deck. It confirms that parties to a contract of carriage are free to agree a carrier has no liability for loss or damage to deck cargo. 

Carriers are reminded of North’s recommended General Deck Cargo Clause:

“Carried on deck at shipper’s risk without responsibility for loss or damage howsoever caused.” 

The Judge’s rejection of criticisms of the decision in The Imvros is also helpful to shipowners.  In addition to dealing with exceptions clauses, The Imvros also stated that, where a charterer is responsible for stowage, liability for damage caused by inadequate stowage is not transferred back to the owner where the stowage is performed so badly it renders the vessel unseaworthy. 

For further reading, download the judgment: Aprile SPA v Elin Maritime Ltd.

Author: David Richards
Deputy Director (Cargo)