Judgment was given i favour of a shipping company in a case concerning tort liability in connection with the seizure of the cargo ship Danica White

Date 13 dec. 2010

 

On 6 October 2010,  the Danish High Court affirmed the judgment of the Copenhagen City Court from 26 August 2009 and thereby gave judgment in favour of the shipping company Rederiet H. Folmer & Co I/S from tort liability in a trial where a number of crew members of the ship Danica White had claimed payment for damages as a result of failure and neglect from the shipping company in relation to a seizure of the ship off  the coast of Somalia.

 

The case in brief

In early summer of 2007, the cargo ship Danica White, registered in Denmark, was sailing from Sharjah in the United Arab Emirates to Mombasa in Kenya with 5 crew members and a load of drilling pipes and drilling concrete on board when it was seized by Somali pirates who took control of the ship on 1 June 2007 at approximately 10.15 am.

 

The pirates were heavily armed and came in three fast boats. The attack occurred about 205 nautical miles off the coast of Somalia. Danica White was ordered to sail to the coast of Somalia where the ship was anchored. The ship was staffed in compliance with present regulations and the security system of the ship was fully functional, including the so-called “Ship Security Alarm System” (hereinafter “SASS”).

 

Danica White and its crew members were released on 22 August 2007 after they had been spending 83 days as hostages and a ransom had been paid. Following this, the ship was sailed to Djibouti and the crew members were flown home.

 

The claim for payment in connection with damage liability was filed by Sømændenes Forbund 3F on behalf of the crew members who claimed that the shipping company had not informed them sufficiently on the dangers lurking in the  unsafe waters close to Somalia and on which precautions to take.. Finally, they claimed that Danica White, which is a slow ship with low freeboard, was an easy target for the pirates.

 

Partsrederiet Invest VI (hereinafter ”Partsrederiet”) was the owner and operator of Danica White, while Rederiet H. Folmer & Co I/S (hereinafter “Rederiet”) was the managing shipping company. Any employer’s liability, cf. the Merchant Shipping Act section 151, for failure and neglect by the captain or Rederiet would lie with Partsrederiet.

 

The question was whether the seizure of the ship and the long-lasting hostage-taking was due to failure and neglect by Partsrederiet which could lead to Partsrederiet being liable to pay compensation for damages to the crew members for their loss following the seizure, cf. the Merchant Shipping Act section 151.

 

Another question was whether Rederiet itself was liable to pay compensation for damages due to liability in negligence.

 

The legal basis

The Merchant Shipping Act section 151 states that the ship owner is liable for damages caused by failure or neglect by the captain, staff, pilot or others on duty at the ship.

 

It follows from the requirement for failure or neglect, that the person who causes the damages must have been acting negligently before the owner may be held liable.

 

The rule replaces the Danish Law of King Christian V, section 3-19-2, but has a wider field of application, because it also includes damages caused by the pilot who neither the ship owner nor the captain has the authority to instruct. The expression is interpreted in the way that the ship owner also becomes responsible for self-employed agents or the employees hereof who work for the ship, regardless of whether they work on board or not.

 

The Ruling of the High Court

The Danish High Court based its decision on the fact that at the time of the seizure Danica White was sailing 205 nautical miles from the coast of Somalia which was in accordance with the recommendations made by Marlo Advisory Bulletin in 2005, a link between the US Navy and the civil shipping trade, which were to sail at least 200 nautical miles from the coast of Somalia. This recommendation had been repeated by the Danish Shipowners’ Association as late as 22 May 2007.

 

On the basis of the above-mentioned, The Danish High Court did not find any reason to conclude that the captain had acted negligently by not sailing further away from the coast of Somalia than 205 nautical miles.

 

On the other hand, court noted that the captain had been aware of the danger involved in sailing along the coast of Somalia and therefore should have established an intensified surveillance while sailing through the risky waters, cf. executive order nr. 1758 of 22 December 2006, section 2(1), on guarding of ships, which states that the captain is responsible for safe guarding of the bridge and the machine.

 

It was also noticed by the court that the security system of the ship was not activated during the attack even though it was flawless and should have been activated at the time when the ship was threatened. This indicated that the captain lacked the knowledge to  use  the systems and that he had not made sure that the crew members knew how the alarm could be activated.

 

Despite these facts, the High Court did not find that there was a legal basis for imposing a liability to pay damages on Partsrederiet, because they found that the even if there had been better guarding the crew would only have noticed the pirates shortly before the attack and an alarm at the right time would  not have prevented the seizure. The negligence did not cause the seizure of Danica White.

 

Furthermore, the Danish High Court did not find any proof that Partsrederiet had behaved in a way which would lead to liability for damages during the subsequent negotiations.

 

Therefore, the Danish High Court gave judgment in favour of Partsrederiet.

 

The Danish High Court did not find any circumstances in the development leading up to the seizure or during the course of the negotiations which would justify imposing an individual liability to pay damages on Rederiet H. Folmer & CO I/S. Judgment was also given in favour of this company.

 

Our comments on the judgment

Section 151 of The Merchant Shipping Act concerns the ship owner’s responsibility for damages caused by people who carry out work at the service of the ship and replaces the Danish Law of King Christian V, section 3-19-2, in its field. It follows directly from the wording of the clause that failure or neglect is a requirement for claiming liability.

 

Before liability may be claimed pursuant to the general rules on liability, it is required that a loss has been suffered, that there is a basis of liability concerning the person causing the damage and that the loss is causal and adequate.

 

In this case, the High Court found that the failure and neglect which had been shown and which should form the basis of liability were not the cause of the seizure of the ship. Therefore, the Danish High Court concluded that the requirement of a causal loss was not fulfilled. Liability could not be imposed  with reference to the Merchant Shipping Act section 151.

 

In the theory of liability, it is a widely-held opinion that the requirement of a causal loss is fulfilled if the damage had not occurred unless the action in question had been performed. Therefore the action should be the necessary and sufficient requirement for the damage to happen. If, on the other hand, the action is neither necessary nor sufficient for the damage to take place ,the person performing the action will not have had the required control over the sequence of events which is required for stating liability for damages.

 

The decision of the Danish High Court is in full compliance with this opinion. Based on the actual circumstances of the case, a decision must be based on the fact that  the failure and neglect shown by the captain was neither necessary nor sufficient for the damage to occur. As a result of this, the captain was not in such control of the sequence of events that he or Partsrederiet could be imposed a liability to pay compensation for damages.

 

 

If you have questions regarding the above or require additional information about maritime law, please contact partner Claus Molbech Bendtsen (cmb@mwblaw.dk) or attorney Pernille Nørkær (pno@mwblaw.dk).

 

The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions or considerations.