In the first judgment handed down by the admiralty court this year, the owners of the mv Happy Aras failed in their attempt to recover general average contributions from cargo interests following the grounding of the vessel. In rejecting the owners’ error-in-navigation defence, the court placed further pressure on shipowners to prove that they had exercised due diligence prior to and at the commencement of the voyage to make the ship seaworthy. The judgment will be welcomed by cargo owners, charterers and their insurers.
The mv Happy Aras was on a voyage from the Ukraine to Mersin in Turkey with a cargo of soyabeans. At 20:00 one clear evening, the Master relieved the officer of the watch. The passage plan required regular plotting of the ship’s position in order to follow the course as it threaded its way through the islands off Mersin reflected in the figure at the end of this summary. Instead of diligently following the planned route, the Master made an alteration of course in a southerly direction in order to cut the corner and then failed to alter course to starboard to follow the passage plan. The vessel ran aground at 20:57. Following a salvage operation, the owners declared general average and cargo insurers provided general average security for a claim being pursued in London, governed by English law and subject to the York-Antwerp Rules.
Cargo interests refused to pay the GA contribution once it had been adjusted on the basis that the loss or expenditure was caused by an actionable fault on the part of the owners which included a causative breach of the contract of carriage. This followed the decision of the Supreme Court in the CMA CGM Libra case which we have commented on several times. In general, claims under bills of lading or charterparties are usually met by one of the several defences available to carriers under the Hague, Hague-Visby or Rotterdam Rules. The most common are errors in navigation or management, fire and perils of the sea.
The error-in-navigation or management defence allows carriers to escape liability for a loss if the cause of that loss was negligence on the part of the Master or crew. In order to overcome that defence, cargo interests have to satisfy a court on a balance of probabilities that the owners have breached one of their fundamental obligations which includes the obligation to ensure, prior to and at the commencement of the voyage, that they have exercised due diligence to make the ship seaworthy.
Seaworthiness has been given a broad definition by courts and requires the vessel to be fit in every respect to carry out the contemplated voyage with that cargo. This applies not only to the mechanical and water tight integrity of the ship, but also to ensuring that she has the correct certificates, equipment, fuel, firefighting apparatus, navigational equipment and competent seafarers to safely complete the voyage.
The English courts have over the last several years imposed a stricter burden on shipowners with regard to proving that they exercised due diligence. In the Eurasion Dream [2002] 1 Lloyds Rep 719, the court held that it was not sufficient for the shipowners to simply prove that they provided firefighting equipment. They had to prove that the crew had specialised training in using that equipment on a car carrier. In the CMA CGM Libra,[2021] UKSC 51,the court held that it was not sufficient for the owners to rely on the Master and navigating officer to produce and follow a proper passage plan. The owners should themselves ensure that the passage plan was appropriate.
In this instance, cargo interests pointed out that the Master: dismissed the lookout from the bridge to make tea; failed to plot the ship’s position regularly; failed to make any logbook entries, particularly relating to the deviation from the passage plan; failed to alter course to starboard to resume the intended passage after cutting the corner; and failed to maintain a proper lookout.
The owners of the vessel alleged that these series of events may well amount to negligence on the part of the Master, but did not make him incompetent and even if he was incompetent, they had exercised due diligence as he had the appropriate certificate, had worked without incident for them for three years, and was well recommended.
The court held that:
“The test of unseaworthiness is whether a prudent owner would have required the relevant defect, had he known of it, to be made good before sending his ship to sea”.
“Incompetence or inefficiency may consist of a disabling want of skill or a disabling want of knowledge.”
This has been extended to include a “disabling lack of will to use the skill and knowledge”.
While conceding that even a number of negligent actions may not amount to incompetence, the court was of the view that such a series of events indicated that the Master was incompetent. Although the owners provided hearsay evidence with regard to his qualification, experience and a positive reference, they did not provide direct evidence either from the owner or the Master to prove that they diligently determined whether or not the Master was competent. As a result, the owners were found actionably at fault and accordingly could not recover the general average contribution.
In passing, the court considered whether or not the passage plan was appropriate, but took the view that the passage plan itself was not causative of the grounding and accordingly not relevant.
The principles set out by this case, which may well be taken on appeal, places an additional burden on shipowners and carriers to ensure that they are satisfied, not only at the time the Master is employed, but on a continuous basis, that the Master is competent and able to properly carry out the duties of that position. Failure to do so will override errors of navigation or management defences for claims under bills of lading and charterparties and prevent recovery of general average contributions following a casualty.
Unity Ship Group SA v Euroins Insurance JSC (the “Happy Aras”) [2026] EWHC 7