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On appeal from: [2016] EWCA Civ 1103

This appeal considered where the burden of proof in relation to negligence lies in respect of alleged breaches of the Hague Rules, art III rule 2, and the defence of inherent vice under art IV rule 2(m).

The Supreme Court unanimously allowed the appeal, holding that the legal burden of disproving negligence rested on the carrier, both for the purpose of art III.2 and art IV.2 of the Hague Rules. Lord Sumption gave the sole judgment, with which all members of the Court agreed.

The Court held that the Hague Rules must be read against the background of the common law rules on bailment that: (i) a bailee of goods is only under a limited duty to take reasonable care of the goods, but (ii) the bailee nonetheless bears the legal burden of proving the absence of negligence. The Court ruled that imposing a duty of care on the carrier by article III.2 is consistent with his bearing the burden of disproving negligence.

As to article IV, the Court held that the exceptions cannot be relied upon if they were caused to operate by the negligence of the carrier. The carrier must prove facts which show not only that an excepted peril existed, but that it was causative of the damage. The Court highlighted that the carrier bears the burden of proving that the exception was not caused to operate by the carrier’s negligence.

With regards to the exception in article IV.2(m) for “inherent vice”, the Court emphasised that the test is whether the cargo was fit to withstand the ordinary incidents of the specified service, and its application can be decided only by reference to some assumed standard of care. The mere propensity of the cargo to emit moisture is not inherent vice if reasonable care in lining the containers would have resulted in the cargo being discharged undamaged.

The judge’s factual findings are therefore restored and, given the absence of evidence on the weight of the paper used, the Court decided that the carrier had failed to discharge its legal burden.

For judgment, please download: [2018] UKSC 61
For Court’s Press Summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing, please visit: Supreme Court Website (3 Oct 2018 morning session) (3 Oct 2018 afternoon session) (4 Oct 2018 morning session)