Yew Huoi, How & Associates | Leading Malaysia Law Firm

CARGO CONUNDRUM: OWNERSHIP, LIABILITY, AND INHERENT VICE IN THE JB COCOA V MAERSK LINE CASE

Summary and Facts
In the recent ruling from the English King’s Bench Division in JB Cocoa Sdn Bhd & Others v. Maersk Line AS [2023] EWHC 2203 (Comm), JB Cocoa Sdn Bhd and others brought a claim against Maersk Line for damages relating to a shipment of cocoa beans that suffered condensation and mould damage during transport from Lagos to Malaysia. The claim was primarily based on allegations of breach of duty of care under the bill of lading, but key legal questions regarding the carrier’s liability, the condition of the cargo at loading, and the applicability of the Hague Rules were at the heart of the dispute.

Legal Issues

  • Whether the deterioration of the cocoa beans between discharge and delivery constituted a breach of Maersk Line’s duty to care for the cargo post-discharge.
  • Whether Maersk Line fulfilled its obligations under the bill of lading and complied with the Hague Rules in handling and transporting the cargo.
  • Whether JB Cocoa and the other claimants had the necessary standing as owners of the cargo at the time of the damage to pursue their claims.
  • Whether the defence of inherent vice was applicable, indicating that the cargo’s damage was due to its inherent properties rather than negligence by Maersk Line.

Court Findings

  • The court found that JB Cocoa and other claimants lacked standing as owners of the cargo at the time of the damage.
  • This was due to the chain of sales agreements and the terms of ownership transfer under CIF (Cost, Insurance, and Freight) conditions. The evidence showed that JB Cocoa had not proven that it became the legal owner of the cocoa beans before they were damaged.
  • According to the judgment, ownership of goods under CIF terms typically transfers upon shipment, but there was no sufficient evidence that property in the cocoa beans had passed to JB Cocoa at any point before the damage occurred or even before delivery.
  • JB Cocoa did not have the legal ownership or possessory title to the cargo at the time of the damage, which was required to sustain a claim in negligence.
  • Furthermore, communications involving the final receiver identified JB Foods, not JB Cocoa, as the owner at the relevant time.
  • The Hague Rules only applied to the period up to discharge, and Maersk Line was not liable for post-discharge issues.
  • The cargo’s damage was caused by prolonged containerisation, but the defence of inherent vice was raised, suggesting the cargo was prone to damage due to its inherent properties.

Practical Implications
This case reinforces the strict interpretation of the Hague Rules in commercial shipping contracts, limiting a carrier’s liability once the goods are discharged, unless specific provisions indicate otherwise. The ruling also highlights the challenges in proving ownership and liability when dealing with complex international shipping and commercial agreements.

Recent Post

FAMILY LAW – CHILDREN’S CUSTODY – CUSTODY DISPUTES IN MALAYSIA: ESSENTIAL INSIGHTS ON CHILD WELFARE AND PARENTAL ROLES

In a recent custody dispute, the court emphasized the importance of child welfare, reaffirming the maternal custody presumption for young children unless strong evidence suggests otherwise. In high-conflict situations, the court favored sole custody over joint arrangements to minimize stress on the children. This case underscores that Malaysian parents should provide credible evidence for their claims and focus on practical, child-centered solutions.

Read More »

BREACH OF CONTRACT – DAMAGES – FORESEEABILITY AND FAIRNESS IN FREIGHT LIABILITY CLAIMS

In JSD Corporation v Tri-Line Express [2024] 1 Lloyd’s Rep. 285, the court set a clear precedent on damages for property claims, ruling that only foreseeable and proportionate losses are recoverable. Applying principles akin to Hadley v Baxendale, the court allowed for repair costs if intent to remedy was evident but rejected double recovery, underscoring that damages must reflect actual loss without overcompensation. This decision serves as a guide for Malaysian courts, emphasizing fair and balanced recovery in line with foreseeable damages.

Read More »

ADMIRALTY IN REM – SHIPPING — FUEL OR FREIGHT? COURT CLEARS THE AIR ON GLOBAL FALCON BUNKER DISPUTE

In a decisive ruling on the Global Falcon bunker dispute, the court dismissed Meck Petroleum’s admiralty claim for unpaid high-sulphur fuel, finding that the fuel was supplied not for operational purposes but as cargo. With the vessel lacking necessary equipment to use high-sulphur fuel and evidence pointing to its transfer to another vessel, the court determined that Meck’s claim fell outside admiralty jurisdiction, leading to the release of the vessel and potential damages for wrongful arrest.

Read More »

COLLISION COURSE – COURT WEIGHS ANCHOR DRAGGING AND LIABILITY AT SEA

In a collision that underscores the high stakes of maritime vigilance, the court ruled that Belpareil bore the brunt of the blame for failing to control its dragging anchor and delaying critical warnings. Yet, Kiran Australia wasn’t off the hook entirely—apportioned 30% fault for its limited evasive action, the case serves as a stark reminder: in maritime law, all vessels share responsibility in averting disaster, even when one party’s errors loom large.

Read More »

GENERAL AVERAGE – PIRATE RANSOM DISPUTE: SUPREME COURT RULES CARGO OWNERS LIABLE IN THE POLAR CASE

In the landmark case Herculito Maritime Ltd v Gunvor International BV (The Polar) [2024] 1 Lloyd’s Rep. 85, the English Supreme Court upheld the shipowner’s right to recover a USD 7.7 million ransom paid to Somali pirates under general average. The Court ruled that cargo interests, despite their arguments regarding charterparty terms and insurance obligations, were liable to contribute to the ransom payment. This decision reinforces the importance of clear contractual provisions when seeking to limit or exclude liability in maritime contracts particularly matter relating to general average.

Read More »
en_USEN
× Contact Us