Introduction

Admiralty law is a body of law which is also referred to as maritime law and it deals with problems that occur in maritime and answers questions that arise in maritime. The body consists of domestic law that governs maritime and private international law that governs the relationships between the entities who operate the ships or the vessels. The essay gives advice to different parties involved in cargo losses and damages. Each party has a different situation and the solutions to their problems are different depending on the cause of the loss of goods.

Advice to the Parties

The concepts that apply to almost all of the cases that are involved in the case of the Arteta vessel are under General Average concept. The concept is applied in the transportation of goods through ships and it is used in maritime practice. General average can be defined as a concept that deals with contribution of losses of goods between the interested parties who are involved in the carriage of goods by sea. The general average concept is applied when an extraordinary loss occurs, when the damage is for the common safety of the voyage, when in time of peril and when the loss is reasonably incurred and it is intentional. As illustrated by Roanoke trade, (2011),[1] general average is mostly applied in cases that are caused by collisions, fires, stranding and accident during the voyage or when the vessel is engaged in salvage processes.

 

Cahill Ltd and Hibbert Inc

On 2 February 2011 a consignment that was owned by Cahill Ltd caught fire and the fire was extinguished by the crew but some of the cargo was destroyed. The problem here is to ascertain the party that is supposed to pay for the losses that were incurred due to fire that destroyed the paper cargo. If the owner of the paper cargo had insured his goods against fire, then the insurance company will pay for the damages. The crew in the vessel might have caused the fire because the investigators found butts of cigarettes that were discarded near the cargo. So it can be concluded that the ship owner is the one responsible for the losses. The negligence of the crew is the one that caused the loss because of lighting the cigarettes in the vessel. The owner of the cargo is supposed to be paid because the negligence was not from his side. If the negligence was from the owner of the consignment, he would not have benefitted from the general average as in the case of Schloss versus Herriot, (1863).[2] In this case, the owner was not responsible and so he is supposed to seek for compensation from the interests to the cargo.

A consignment that belonged to Hibbert Inc was destroyed by the smoke of the fire that burned the paper cargo. The problem identified in this issue is who is supposed to pay for the damages and if the general average concept applies in the issue. The rule in the general average concept does not apply to the goods that are damaged by the smoke. This is referred to as particular average as illustrated by Mangone, (1997, p. 256- 259)[3]. The particular average concept is applied in insurances for the cargo on transit and it indicates the losses that are supposed to be covered as suggested by Timothy and Joseph, (2011, p 60)[4]. The owner of the consignment is supposed to bear the losses. Apart for bearing the losses himself, the owner can also bring a legal action against the party he believes caused the loss or he can be compensated by the insurance company.

Osman and Baines Ltd

A consignment of cardboard was destroyed by the sprinkler system that was being used to prevent a possible fire in the vessel which was due to a smell of burning fire. The problem here is who caused the damage of the cardboard cargo and who is liable for the damages. The consequences of the actions of the master will not constitute general average because the master was confused as to the peril existence as it was decided in the case of Watson Joseph & Sons Ltd v Fireman’s Fund Insurance Co  [1922]2KB 355[5]. It was held that for an act to constitute a general damage there must be a real danger. The smell of a burn does not constitute a real danger but it was confused existence of danger. The claim that was estimated of £1000 will not succeed under general damage because the loss was not based on real danger existence.

Heitinga Defence Solutions and Howard Gallery

A cargo that belonged to Heitinga Defence Solutions was highly volatile and the Captain feared its explosion and the cargo were jettisoned. The crew of the vessel knew how to deal with such cargos and it was not their first time to have such a cargo. The problem here is whether the owner of the consignment is liable for the losses or the losses are to be shared by the interests to the cargo. If the consignment was not jettisoned, it might have exploded and it would have caused losses to the owner of the ship and to the owners of all the consignment in the vessel. The general average act applies where a sacrifice is made by one of the interests for the purpose of preserving the other consignments as in the case of Birkely v. Presgrave (1801)[6]. The solution to this case is to apportion the value of the cargo that was jettisoned to all other interest including the owner of the ship and the owner of the cargo that was jettisoned. It is acceptable depending with the agreement of the interested parties in the voyage as Baughen, (2009, p. 325-333)[7], puts it. Heitinga Defence Solutions is supposed to receive a compensation of their goods from the other parties.

Paintings that were owned by Howard Gallery were damaged in the jettison operation process where seawater splashed on the paintings. The problem here is to identify the party that is liable for the payment of the losses that were incurred. Under the general average concept, rule II includes the damages that are caused by the opening hatches to jettison cargo as in the case of the paintings. Howard Gallery has a right to receive compensation from contributions made by the interested parties to the cargo. This means that the loss will be shared among all the parties together with all other losses that fall under the general average because the jettison was incidental to the paintings and the claim of 50,000 by Howard Gallery constitutes a general damage as seen in the case of The Brig Mary (1842)[8] 1 Sprague and Hallett v Wigram (1850) 9 C.B at 608[9] where it was held that if in order to accomplish a jettison other goods have to be destroyed, the value of the goods are included in general damage.

Arteta vessel

The vessel was beached on a sandbank in the attempt to navigate the safety due to an unexpected storm. The issue here is whether the expenses incurred by the vessel in the rescue mission from the sandbank are covered by the general average concept and whether it is a salvage issue. Another problem in this issue is whether the Moyes Corporation is right by refusing to release the cargo or any of it until the vessel is paid by the cargo interests the cost they incurred in refloating the cargo. The general average rule allows the expenditures that are incurred by the ship in rescue and to enable it to complete its voyage to be recovered and to be shared equally as stated by Hodges, (1996, p. 436-452)[10].

This is under rule VI of the general average and it is in accordance with the international salvage law. The issue of common safety of the voyage can also apply in this issue because the expenses were incurred for the purpose of preserving the property under common venture in the general average as Lowell, (1895, p. 17-29)[11], puts it. If the vessel was not beached in the sandbank, then all the consignment would have been destroyed by the storm. Advice to the owners of the vessel is to receive compensation from the persons interested in the vessel because a loss was prevented. In the determination of the general average contribution, the captain or the master of the ship is supposed to hire professional adjusters where the master will be acting in the interest of the ship and the interest of the cargo as Force et al, (2008, p. 430-451)[12], suggested. Under security and claims in general average, the Arteta vessel owners are supposed to exercise a possessory lien over the cargo until the security is paid by the interests and this is possible only if he is acting for the interest of all on castle insurance Co authority, (1984)[13]. It was held that the cargo that has been preserved as a consequence of general average expenditure or sacrifice attaches a lien in favour of the people who have sustained a general average loss. It is the duty of the master of the ship to exercise the possessory lien to provide equivalent security for the general average losses.  

There was a damage that was done to the Arteta vessel after it collided with Anarchy II vessel. The aim of the Anarchy II vessel was to ram goods vessels which were in the Arteta vessel. The ship was destroyed for the sake of security of the vessel and the consignments that were inside the ship. The problem here is whether the damage of the ship was to be taken care of by the interests to the vessel or the owner of the vessel was liable for the damages and the repair of the vessel. The ship owners are entitled to limit their liability as provided by Article 1 on the convention limitation for liability for Maritime claims 1979. Following provision of section 20(3) Supreme Court Act, it will be appropriate to bring the action under personum. Anarchy II was deliberate and it cannot limit its liability. It is liable for the damage of £1.5m pounds as stated in the Act. Under the general average concept, the ship owner is not supposed to be at fault for the concept to apply. If the claimant is at fault, then the General average contribution does not apply as in the case of   Robinson versus Price (1877)[14]. The general average is accepted if a vessel or a part of the vessel is sacrificed in an abnormal manner to save it and to save the consignment in the vessel. It is also recoverable when a third party is involved and the pilot wants to avoid a liability that could occur. This is seen in the case of Austin Friars Steamship Co versus Spillers & Baker Ltd [1915][15], where the pilot of the ship tried to avoid grounding and in the process he struck another vessel. He was trying to avoid the strict liability to the harbour authority. The expenses can also be applied in the case of substituted expenses where extraordinary costs are incurred in avoiding greater losses that might occur. The appropriate advice that can be given to the ship owners is to apply the general average concept and share the damages that were caused by the incident. In cases of rem, the ship that causes the losses may be arrested or any other ship that is a beneficial owner in the territory of UK section 21(4) Supreme Court Act. Moyes Corporation is supposed to show that Anarchy I is a sister ship in the territory of UK and it is owned by Menace before arresting it on the basis of sister ship.

Conclusion

In Admiralty law, general average can be well applied in most of the cases that are experienced in sea transport. The general average concept is an ancient concept and it contains the York-Antwerp Rules 1994. The concept is applied in determination of how compensation is supposed to be carried out in case of losses and in determining if the rule applies to particular cases. The claims for damages is governed by the Carriage of Goods Act where the ship owner is liable for the damages of the cargo from the time the cargo is loaded to the time the cargo is discharged to the owners. There are exceptions to the liability of the ship owners of paying for the cargo and the exceptions include the nature of goods, the management of the ship, the act of God and many others.

 

References

Legal Cases

Austin Friars Steamship Co v. Spillers & Baker Ltd [1915] 3 KB 586

Baughen, S., Shipping law, 2009, 4tyh edition pp 325-333

Birkely v. Presgrave (1801) 1 East. 220:

Castle insurance Co authority, [1984] A.C 226 at 234

Hallett v Wigram (1850) 9 C.B at 608

Robinson v. Price (1877) 2 QBD 295

Schloss v. Herriot (1863) 14 CB (NS) 59

The Brig Mary (1842) 1 Sprague

Watson Joseph & Sons Ltd v Fireman’s Fund Insurance Co [1922]2KB 355

Websites

Roanoke Trade, (2011), General Average–An Ancient Concept Taking On New Exposures (online) Available from <http://www.roanoketrade.com/topics/GeneralAverage.pdf> Viewed on 3 May 2011.

Books

Force. R,. Yiannopoulos, A, N., Davies, M,. Admiralty and Maritime Law, Book. Volume 2

 2008, p. 430-451)

Hodges, S. Law of marine insurance, 1996, pp 436-452

Mangone. G, J., United States admiralty law, Book. 1997, pp. 256- 259

Journals

Lowell, J, General average, 1895, Vol. 9 Issue 3, p17-29, 13p

Timothy, D and Joseph, C, Free of particular average. Journal, 2011, p 60

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