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Carriage of Goods by Sea

Parsons Corporation and Others -v- C V Scheepvaartonderneming

The "Happy Ranger"

February 2006

On 16 February 1998 the defendant shipowners ("the Owners") took delivery from Dutch shipbuilders of the heavy lift vessel "Happy Ranger" ("the ship"). Later that day the ship embarked on her maiden voyage. At Port Marghera in Italy the ship was scheduled to load a process vessel, weighing 833 tonnes, which the Owners had contracted to carry by sea to Abu Jubail in Saudi Arabia. The ship was fitted with two masthead cranes. Their original design included a single hook on each crane. However, this was later changed to an unusual specification for double ramshorn hooks connected by triangular plates to the cranes' lower blocks. Whilst loading the process vessel in Italy on 11 March 1998 one of the hooks on the aft crane broke. The process vessel fell to the ground and was badly damaged.

Parsons Corporation of California and others interested in the damaged process vessel sued the Owners to recover compensation. During the proceedings it became common ground that: (i) the crane hook suffered from casting defects and broke at the shank as a result of a brittle fracture; and (ii) the hook did not conform to its specifications. The rules of the ship's classification society which had supervised her construction, Lloyd's Register, required that each crane hook should be tested to a load of at least 275 tonnes. (Indeed, on the judge's interpretation of those rules, the hook should have been proof tested to a load of 325 tonnes.) It emerged, however, that none of the ship's crane hooks had been proof load tested at all.

The Owners accepted that, had the test had been conducted, the fractured hook would have failed and the accident would never have occurred. They further conceded that the ship was not seaworthy at the time of the accident due to a latent defect in the failed hook. However it was common ground that, under Article III Rule 1 of the Hague-Visby Rules which governed the contract of carriage, a shipowner will not, in principle, be liable for any defects in the construction of a ship. The Owners therefore submitted that: (i) they could not be liable for any negligence of either the manufacturers of the ship, cranes or hooks or the classification society prior to their taking delivery of the ship; and (ii) after 16 February 1998 they had exercised due diligence to make the ship seaworthy.

Mrs Justice Gloster found that the ship did not come under the Owners' ownership, possession or control prior to their taking delivery from the builders, and concluded that the Owners were not, therefore, responsible for any negligence of others before 16 February 1998. In her view, however, that was not the critical issue: what mattered was what the Owners did, or failed to do, after delivery of the ship in the light of the knowledge that they had by then acquired.

In their dealings with the shipbuilders the Owners were represented by Mammoet, the experienced operators of heavy lift tonnage. It was Mammoet who had been responsible for changing the original design of the cranes to incorporate the double hook arrangement. The judge was satisfied that either the Owners or Mammoet ought to have realised both that the proof load testing of the crane hooks was an essential requirement and that the absence of any such test certificate meant that that there could be no certainty that the hooks had been tested to their safe working load (let alone to the greater load prescribed for "loose gear" in Lloyd's Register's rules). Had the Owners or Mammoet realised - as they should have done - that the hooks had not been proof tested and that there were no certificates to that effect, the necessary tests (which would have taken no longer than an hour or so) could have been conducted before loading. The defect would then have been discovered. The judge concluded, therefore, that the Owners had failed to show that they had exercised due diligence to make the ship seaworthy after they took delivery.

The Owners and Mammoet had known since December 1997 that the weight of the process vessel they were to load at Port Maghera would exceed the safe working load of the ship's cranes. After delivery, therefore, Mammoet submitted a loading plan to Lloyd's Register with a request for a special exemption allowing loads of up to 424 tonnes per crane. The exemption was granted. In the judge's view, however, the loading plan was misleading: it did not make it clear that there was a double hook arrangement in place and there was nothing to indicate that Mammoet ever calculated the loads the hooks would have to bear during the loading of the process vessel. The judge held that the Owners had not, therefore, shown that they had exercised due diligence in relation to the obtaining of the extension; nor had they proved that Lloyd's Register (for whose failings the Owners were responsible) had carried out its function in that connection with due diligence. There was no separate examination of the cranes at all. Moreover, had Lloyd's Register done its job properly when it came to consider the extension, it would have appreciated that the hooks had not previously been tested to the loads they might experience in practice and would have insisted that a proof load test was carried out.

The judge was satisfied that these breaches of duty by the Owners were causative of the damage. Judgment was, therefore, given in favour of the cargo claimants.

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