Shipping: seaworthiness, due diligence and passage planning

Alize 1954 & -v- Allianz Elementar Versicherungs AG & others (CMA CGM Libra) [2021] UKSC 51

Several years on, the CMA CGM Libra decision continues to influence how voyage interests approach casualties, particularly where issues of passage planning and seaworthiness arise. In the wake of the handing down of the first instance decision by Teare J, it has become common for cargo interests, following a general average casualty, to scrutinise the vessel’s condition and documentation with particular focus on the passage plan, often seeking to identify defects which might support an actionable fault defence.

In this article, Matthew Dow and Richard Cooper take a fresh look at The CMA CGM Libra in the context of more recent decisions and market practice, and assess its ongoing importance for carriers, cargo interests and their insurers.

Introduction

The Supreme Court’s decision in The CMA CGM Libra provides important clarification on the scope of seaworthiness and the carrier’s due diligence obligations under Article III rule 1 of the Hague and Hague Visby Rules. In particular, it considers whether defects in passage planning can render a vessel unseaworthy and the extent to which such failures fall within the carrier’s responsibility when seeking to recover general average contributions. Subsequent case law shows that, while The CMA CGM Libra establishes key principles, their application might not always be straightforward and will depend on the facts of each case.

The background facts

The case arose from the grounding of the container vessel CMA CGM Libra while departing Xiamen, China in May 2011. The vessel deviated from the fairway, contrary to the passage plan, and grounded on a shoal.

The vessel’s passage plan and working chart did not record a notice to mariners that waters outside the fairway were shallower than charted.

The carrier sought general average contributions from cargo interests. Cargo interests contested general average liability on the basis that the loss was caused by the owners’ actionable fault within the meaning of Rule D of the incorporated York Antwerp Rules, namely a breach of Article III rule 1 of the Hague Rules incorporated into the contract of carriage, i.e. a failure by the carrier to exercise due diligence to make the vessel seaworthy before or at the commencement of the voyage.

The parties’ respective arguments

The owners’ primary argument was that passage planning concerns navigation rather than seaworthiness, and that a vessel can only be unseaworthy if there is a defect in an ‘attribute’ of the ship. They submitted that any error in the passage plan was merely a navigational fault falling within the Article IV defences.

The cargo interests argued that the vessel was unseaworthy at the commencement of the voyage because the passage plan and working chart were defective, in that they failed to record a critical navigational warning. They contended that seaworthiness is not limited to defects in the ship’s physical attributes, and that a defective passage plan can render it unseaworthy. They further argued that the owners could not rely on the nautical fault defence where there had been a causative failure to exercise due diligence, and that the obligation to exercise due diligence is non delegable, extending to the acts of the master and crew in preparing the vessel for the voyage.

The lower court decisions

At first instance, Teare J rejected any ‘attribute’ limitation, holding that defects in a vessel’s documentation, such as a defective passage plan, can themselves render the vessel unseaworthy.

Teare J held that the passage plan was defective by failing to incorporate the notice to mariners. Applying the well established ‘prudent owner’ test, the judge found it ‘inconceivable’ that a prudent owner would have allowed the vessel to sail with such a defect, particularly given the importance of proper passage planning to safe navigation. Accordingly, the defective passage plan in turn rendered the vessel unseaworthy at the commencement of the voyage.

In terms of causation, Teare J found that the defect was causative of the grounding, because if the notice to mariners had been incorporated into the passage plan, then the master would have not departed from the fairway.

Teare J further held that the owners had failed to exercise due diligence. The obligation to make the vessel seaworthy was non delegable, and the master and officers, acting as the owners’ servants in preparing the passage plan, were directly responsible for that task. Their failure to exercise reasonable care in producing an adequate passage plan was therefore attributable to the owners. As a result, there was actionable fault, and the owners were not entitled to recover general average contributions because of their breach of Article III Rule 1 of the Hague Rules.

The Court of Appeal upheld this decision, agreeing that the absence of the relevant warning was a serious defect and a causative factor in the grounding.

The Supreme Court decision

The owners further appealed to the Supreme Court. The Supreme Court dismissed the appeal and confirmed that:

• a defective passage plan can render a vessel unseaworthy at the commencement of the voyage

• there is no requirement for the defect to be an ‘attribute’ of the ship

• the ‘prudent owner’ test remains the primary test for seaworthiness

• the carrier’s obligation of due diligence extends to the acts of the master and crew and cannot be avoided by delegation.

Accordingly, the cargo interests were not liable for general average contributions because the grounding was caused by the owners’ breach of their due diligence obligations under Article III Rule 1 of the Hague Rules.

Developments

Since the first instance decision of Teare J, there has been increased scrutiny of a vessel’s condition and documentation, with a particular focus on the passage plan by cargo interests following casualties involving laden vessels. However, it is important to bear in mind that rarely is a passage plan perfect in all aspects, and identifying a defect is only part of the analysis because any such defect must also be shown to have been causative of the casualty, a point that continues to be overlooked.

Defective passage planning was recently considered by the Admiralty Court in Unity Ship Group S.A. -v- Euroins Insurance JSC (The Happy Aras) [2026] EWHC 7 (Admlty), where a general average claim arose following a grounding. One of the arguments raised by cargo interests was that the passage plan was defective because it failed to mark ‘no go’ areas and that this was a breach of the owners’ due diligence obligation under Article III Rule 1.

However, the Court in the Happy Aras did not find that the passage plan rendered the vessel unseaworthy. The Court did not expand on its reasoning, but it was likely on the basis that the defects were not sufficiently serious. In any event, the question was ultimately academic in that case because the defects were not causative of the grounding.

Nevertheless, the Happy Aras decision may therefore be seen as qualifying the apparent breadth of The CMA CGM Libra, leaving scope for argument that not all deficiencies in passage planning (including a failure to mark ‘no go’ areas) will render a vessel unseaworthy, and underlining that the issue is highly fact sensitive, with each case turning on its particular circumstances.

However, the decision in The CMA CGM Libra remains a clear reminder to owners of the critical importance of robust and carefully prepared passage planning as part of their non delegable seaworthiness obligations.

Our Shipping team can advise on all issues arising out of casualties. If you’d like to discuss how they can help you, please get in touch today.