BUNGE SA V ADM DO BRASIL LTDA (THE “DARYA RADHE”)

[2009] EWHC 845 (Comm), Queen's Bench Division, Commercial Court, Mr Justice Tomlinson, 24 April 2009

Shipping – Dangerous cargo – Physical danger – Legal danger – Small number of rats loaded onto vessel together with cargo of soy bean meal pellets – Removed by fumigation – Risk of delay at discharge port – Whether cargo legally dangerous – Burden of proof – Hague Rules article IV rule 6

A cargo of soybean meal pellets had been found to contain between 14 and 20 rats. The claimant shipowner/FOB buyer sued the defendant shippers saying that soybean meal pellets infested with rats were a dangerous cargo because of the risk of delay and detainment. The shippers were, it said, liable for the losses incurred as damages and expenses directly or indirectly arising out of or resulting from the shipment of the cargo. It relied, alternatively, on the implied term that the shipper of goods will not ship goods of a dangerous character of which the carrier could not by reasonable diligence have become aware before loading. Arbitrators had given award to the defendants shippers. This was the claimant’s appeal of the arbitration wherein the various tribunals had determined the issues in favour of the defendants. On appeal, Tomlinson J set the issue for determination out in the following terms. “Whether, on the basis of the facts found, the arbitrators came to a correct conclusion that, even had it been possible to show that one or more identified shippers was or were responsible for the introduction of the rats, or any one of them, nonetheless that would have involved no breach of contract by the shipper or shippers concerned, not would it have generated a right to recovery under Article IV Rule 6 of the Hague Rules”. Tomlinson J dismissed Bunge’s appeal, holding as follows. Bunge could not establish a breach of contract or liability under the Hague Rules, even assuming that it could show that one or more of the shippers was responsible for the introduction of one or more rats. A cargo was dangerous per article IV rule 6 of the Hague Rules if it was capable of causing physical damage in a direct or indirect manner, but it was most unlikely that the word “dangerous” extended beyond physical danger. In relation to the term implied at common law that the shipper would not ship dangerous goods without notice, the meaning of the word “dangerous” was the same. In sum, Bunge lacked the factual findings on the basis of which it could hope to bring home liability to the shippers on the footing that the cargo shipped was dangerous. As for the cargo being legally dangerous, it was insufficient to prove simply shipment of a cargo which might possibly be subject of some legal challenge at the discharge port. As for the burden of proof, given the answer to the first question it was not necessary to answer this question. Bunge submitted that instead of asking “whether, if the rats had come on board the vessel with the cargo, there were rats present in every shipper’s cargo, or only some of them, and if so which?”, the arbitrators should have asked “on a balance of probability, did the shipper in question load a rat?” The latter approach was not appropriate. Logic compelled against a proposition which in essence could be paraphrased as “where 14-20 rats are loaded in cargo shipped by four shippers, it can and must be concluded that every shipper probably loaded at least one rat”. The number of rats was not such as to permit any valid statistical approach and no assumptions could be made as to the distribution of rats in the parcels of cargo. The proof in relation to sightings of rats did not support a statistical approach.