Incorporation – bill of lading containing the words “all other conditions as per charterparty including negligence clause”
A cargo of linseed in bags was damaged by the ingress of water from a cracked plate. In issue was whether the crack was caused by corrosion (tantamount to unseaworthiness) or heavy weather.
The Bill of Lading incorporated the “negligence clause” of the Charterparty.
The exception relating to negligence was contained in a clause with other exceptions including qualified unseaworthiness.
The holders of the Bill of Lading argued that the cause of the damage was unseaworthiness i.e. corrosion which was not included in the reference to the “negligence clause”.
The County Court Judge held that the crack was caused by unseaworthiness and that this was not an exception incorporated into the Bill of Lading. The shipowners were therefore liable for the damage to the cargo.
The Divisional Court (Sir Gorell Barnes, President, and Bargrave Deane J) held that, heavy weather, being common cause, the holders of the Bill of Lading failed to displace the influence that the damage was caused by unseaworthiness.
On their construction of the documents, the Divisional Court held that the “negligence clause” referred to the entire clause including the exception of unseaworthiness, and both findings of the County Court were therefore rejected.
The case is important for the dictum of Sir Gorell Barnes that in construing the Bill of Lading, the terms of the charterparty must be considered.
These facts are to be distinguished from those in Serraino where specific reference to negligence was absent.
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