Legal
BIFA was interested to read the following article fi rst published in November 2024 by Watson Farley & Williams. This is the second time that we are aware of a UK judgment regarding veri fi ed gross mass (VGM). The outcome re-enforces the responsibilities of the party raising the VGM to ensure that it is correct. In the UK, some ports can provide a chargeable weighing service to arrive at a correct weight. Where there may be a problem is when the shipper establishes its own VGM and passes it to the freight forwarder for the latter to pass on to the carrier. Dependent on the contractual arrangements, the freight forwarder may fi nd itself with a liability to the carrier if a discrepancy is discovered later in the supply chain. As in any matter, it is essential for the BIFA Member to have engaged the BIFA STC with its customer in order for the Member to bene fi t from the customer warranty regarding the accuracy of the information it gives to the provider and also the indemnity clauses. Duty of care facing carriers over container weight discrepencies
T he system of verifying the 2016 has recently come under scrutiny in the English Commercial Court. The regulations made pursuant to the International Convention for the Safety of Life at Sea (SOLAS) require carriers to ascertain the veri fi ed gross mass (VGM) of each container and this information will be used in developing the ship’s stowage plan. In Stournaras Stylianos Monoprosopi Epe v Maersk A/S [2024] EWHC 2494 (Comm) , there was a significant discrepancy between the VGMs and the weight of shipping containers that came into force in July shipper-declared weights, with many of the shipper-declared weights being only 30% or 40% of the VGMs. The case, as advanced at court, was that there was a duty of care obliging the carrier to cross-check the VGM and shippers’ declared weights and not to issue an unclaused bill where the discrepancy is significant. Key facts • Maersk had received the containers already stuffed and sealed. • The VGMs of the containers in this case were measured by the operator of the Jebel Ali terminal, DP World, who issued VGM certificates recording the actual weights of the containers
prior to issue of the bills of lading, which were all received by Maersk. • Maersk issued clean bills of lading, stating the shippers’ declared weights. • Maersk did not, at the time, have a system in place to cross- check the VGM weights with the shippers’ declared weights, because those different sets of figures were dealt with by different departments. • Maersk does now perform manual checks to ensure the VGM and declared weights correspond and has a policy of fining shippers whose containers have a discrepancy of 5,000 kg or more. • The containers here would have failed that test and resulted in a fine for the shippers. • The claimant obtained judgment in Dubai against the shippers, who subsequently disappeared. The claimant therefore sought alternative avenues of recovery and brought a claim against Maersk as owner of the ship on which the cargo was carried. The claims Stournaras claimed that due to Maersk’s failure to clause the bills of lading, or otherwise draw its attention to the weight discrepancy, it became a victim of the shippers’ container fraud. In particular, Maersk had breached
Article III rule 3(c) of the Hague Rules in that it had not carried out an adequate assessment of the apparent order and condition of the goods – the weight discrepancy was so serious as to cast doubt on the order of the goods. In addition, Maersk owed it a tortious or implied contractual duty of care to take reasonable steps not to issue a clean bill of lading where a reasonably competent carrier would know or suspect on reasonable grounds that the shippers’ particulars were fraudulent. The decision The Commercial Court concluded that Maersk was not liable to Stournaras because, based on the facts, Maersk had no reason to suspect that the shippers’ weights might be fraudulent. As a result, it did not know nor ought to have known, or been put on notice, that there was a reason not to issue clean bills of lading. The duty under Art III rule 3(c) of the Hague Rules was for Maersk to assess the “apparent order and condition of the goods”. The apparent order and condition of cargo refers to its external condition, as would be apparent from a reasonable examination. The weight of a container would not be apparent from an inspection of the external condition of the container. The court
“ The Commercial Court concluded that Maersk was not liable to Stournaras Maersk had no reason to suspect that the shipper’s weights might be fraudulent because, based on the facts,
22 | February 2025
www.bifa.org
Made with FlippingBook Annual report maker