The Court of Appeal handed down judgment today (10th November 2016) in Volcafe Ltd and other v Compania Sud Americana de Vapores SA (“CSAV”) [2016] EWCA Civ 1103 upholding an appeal brought by the defendant shipowners. In doing so, it determined the much-debated question as to whether a defendant carrier must first disprove negligence on its part before it can rely on its defences under Article IV Rule 2 of the Hague Rules.

This is a debate which dates all the way back to the dictum of Wright J that the carrier is under such a burden. He expressed this view in Gosse Millard v Canadian Government Merchant Marine [1927] 2 KB 432, a case decided shortly after the Hague Rules came into force. It was subsequently denounced as “heresy” in the early editions of Carver, and has been the subject of various English and Commonwealth judicial dicta over the intervening 90 years. However, the correctness of Wright J’s view has never been squarely before an appellate court for decision before now.

The Court of Appeal (Lady Justice Gloster, Lady Justice King and Mr Justice Flaux, sitting in the Court of Appeal) has now unanimously held that the answer to this question is “no”.

The leading judgment of Mr Justice Flaux also contains valuable guidance at to (i) the assessment of whether a system is “sound” for the purposes of determining whether a carrier is in breach of its obligations to properly care for and carry the cargo under Article III Rule 2, (ii) the scope of the inherent vice defence, (iii) the interplay between Article III Rule 2 and Article IV Rule 2 (m) and (iv) the temporal scope of the application of the Hague Rules.

David Semark (led by Simon Bryan QC of Essex Court Chambers) appeared for the successful Appellant shipowners. John Russell QC and Benjamin Coffer appeared for the Respondent cargo claimants.

A copy of the judgment is available via the attached link.