Note: the decision in this case has been upheld by the German Federal Supreme Court. For a note on the Supreme Court's judgement, click here. Editor, 23 February 2007
DMC Category Rating – Developed
Case Note contributed by BBL Bracker Boehlhoff & Luebbert. BBL is the International Contributor to this website for Germany
The defendant had set up a limitation fund. The plaintiff, as assignee of two cargo interests, established a claim against the fund in the amount of DM1 million and applied for a declaratory court order that the claim was valid. [In the "Cita" case, the plaintiffs sued the time-charterer because the time-charterer was the (contractual) carrier, that is, the party by whom or in whose name the contact of carriage of goods by sea had been concluded with the shipper. As carrier, the time-charterer was liable for the loss of the goods pursuant to s.606* HGB.]
The plaintiff argued that the defendant was liable pursuant to s.559 HGB because the vessel had been unseaworthy. The first officer X was only qualified as a second deck officer. The Antiguan Safe Manning Certificate was not sufficient proof that the vessel was properly manned. Moreover, the behaviour of officer X evidenced that he was unable to manage the vessel properly because he had been keeping watch without the watch-alarm and without a second watch keeper. This constituted an infringement of the Standards of Training, Certification and Watchkeeping Convention ("STCW") 1978 which had also been incorporated into English law. Given that the casualty occurred off the Scilly Isles, English law was the law of the place where the accident took place. The defendant was also liable pursuant to s.606 HGB because the loss had been caused by want of due diligence on the part of the carrier. The true cause of the loss was not an error in navigation, but rather ‘faulty business organization’ because the watch-keeping officer, who had been supervising the loading of the vessel before departure, had not been granted sufficient time to rest.
The defendant maintained that the vessel had been seaworthy and properly manned at the commencement of the voyage. The fact that the watch-alarm had been switched off constituted an error in navigation and thus an exclusion of liability pursuant to s.607.2 HGB. Any alleged infringement of the SCTW 1978 and 1995 was not relevant because these conventions had not been in force for Antigua at the time of the loss. Officer X had been granted sufficient time to rest. Moreover, any behaviour in connection with the watch keeping was the sole responsibility of the master.
The Regional Court (Landgericht) Hamburg held in favour of the plaintiff that the defendant was vicariously liable for the behaviour of its servants pursuant to ss.606 and 607.1* HGB. The exclusion for error in navigation according to s.607.2* HGB did not apply. This was an exception the scope of which had to be construed restrictedly.
The defendant appealed and argued, principally, that the Landgericht had erred in denying an error in navigation.
Neither was the defendant liable for lack of organisational measures to ensure a proper watch-keeping. Although the crew did not know about the requirements of two watch-keepers, it could not be assumed that such ignorance was due to any fault in organisation on the part of the defendant. It was true that at the time of the loss the Merchant Shipping (Certification and Watchkeeping) Regulation 1982 - requiring two persons on the bridge - had been in force at the place of the casualty, although not under the law of the vessel’s flag. However, it would be too high a standard of duty to demand from the carrier that he research in advance the legal provisions that might apply to the route taken by the vessel in any particular trade. This would be otherwise only if Notices to Mariners (Merchant Shipping Notices) with the corresponding information had been readily accessible to the carrier at that time.
Finally, the defendants were not liable pursuant to s.606 HGB because the loss had been caused by an error in navigation. That meant that the liability of the defendants was excluded by s.607.2.1 HGB. The conduct of the navigation or management of the vessel included such behaviour that was an omission rather than an action, such as not switching on the watch-alarm or the watch-keeping officer not staying awake. Such behaviour affected the operation of the vessel in the same way as the non-correction of the vessel’s course or the failure to check the compass or radar.
In view of the clear wording of s.607.2.1 HGB, the court found itself prevented from reducing the scope of application of this provision by way of judicial construction, since the legislature had to date, in spite of a) the well-known concerns about this provision and b) the technical developments in shipping, not seen the need for any adjustment.
In view of the general significance of the issues raised, the court has allowed an appeal to the Federal Court of Justice (BGH).
*S.606 HGB "The carrier shall be bound to exercise due diligence to properly and carefully load, handle, stow, carry, keep, care for and discharge the goods. He shall be liable for any loss of or damage to the goods from the time he has taken over the goods until the time he has delivered the goods, unless the loss or damage is due to circumstances that could not have been avoided by exercising due diligence on the part of the carrier"
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