Volcafe -v- CSAV: Burden of proof under the Hague (and Hague‑Visby) Rules

Volcafe Ltd and others -v- Compania Sud Americana De Vapores SA [2018] UKSC 61

The Supreme Court’s decision in Volcafe -v- CSAV [2018] (Volcafe) remains a cornerstone authority on the allocation of the burden of proof under the Hague (and Hague‑Visby) Rules (the Rules).

Several years on, the decision continues to shape how cargo claims are pleaded, evidenced and determined.

In this article, Matthew Dow and Jack Redrup revisit the Volcafe judgment in light of subsequent decisions and practice and consider its ongoing practical significance for carriers, cargo interests and their insurers.

The background facts

The case concerned the carriage of consignments of coffee beans shipped in containers from South America to northern Europe under contracts governed by the Hague Rules.

On discharge, the cargo was found to be damaged by moisture caused by condensation inside the containers. The carrier denied liability, contending that the damage was caused by the inherent vice of the cargo within the meaning of Article IV Rule 2(m) of the Rules.

At first instance, the judge held that once cargo interests had demonstrated that the cargo was delivered in a damaged condition, the onus was on the carrier to disprove negligence by establishing inherent vice or inevitability of damage. The carrier had not discharged that burden.

The Court of Appeal reversed this decision and found in favour of the carrier. It was accepted that condensation was a natural characteristic of coffee cargoes. Once the carrier had made out a prima facie case for the inherent vice exception to apply, the burden shifted to cargo interests to prove breach of the Article III rule 2 obligation to properly and carefully care for the cargo.

The matter ultimately came before the Supreme Court.

The Supreme Court decision

The Supreme Court unanimously allowed the appeal and found in favour of the cargo interests.

In doing so, it provided authoritative guidance on how the Rules allocate the burden of proof and confirmed that those Rules do not displace fundamental principles of bailment. Where cargo is delivered in a damaged condition, the carrier, as bailee, is required to explain what happened to the cargo while it was in its care.

The Supreme Court held that cargo interests must first establish a prima facie case by proving that the cargo was shipped in apparent good order and condition and was discharged in a damaged state. That threshold was satisfied in Volcafe.

Once a prima facie case regarding the shipment condition is made out, the burden shifts to the carrier to establish, on the balance of probabilities, either that it exercised reasonable care for the cargo as required by Article III Rule 2, or that the loss or damage resulted from one of the exceptions set out in Article IV Rule 2.

Importantly, the Court confirmed that the carrier bears both the evidential and legal burden of establishing that it took reasonable care of the cargo. It is not sufficient merely to show that the damage is consistent with a recognised exception.

The Supreme Court rejected the carrier’s argument that the natural tendency of coffee beans to suffer condensation was sufficient to establish inherent vice. ‘Inherent vice’, the Court held, refers to characteristics of the cargo that cause deterioration without any want of care by the carrier. Where reasonable precautions or steps could have prevented or mitigated the damage, the defence will not be available.

On the facts of Volcafe, the carrier had not demonstrated that it took reasonable steps (such as appropriate ventilation or container management) to protect the cargo. As a result, it was unable to rely on the inherent vice defence.

Practical impact and subsequent developments

Since Volcafe, courts and tribunals have generally adopted a more disciplined and evidence led approach to inherent vice and other Article IV Rule 2 defences.

The emphasis has shifted firmly to whether the carrier can demonstrate the exercise of reasonable care throughout the period of carriage, rather than relying on the inherent characteristics or vulnerabilities of the cargo as a sufficient explanation for the loss or damage.

That approach was endorsed by the Commercial Court in JB Cocoa SDN BHD & Ors -v- Maersk Line AS [2023] EWHC 2203 (Comm). In that case, which concerned moisture and mould damage to containerised cocoa beans following delay and extended exposure to risk, the Court applied Volcafe and assessed the inherent vice defence by reference to whether the carrier could demonstrate, on the evidence, that reasonable care had been exercised during the carrier’s period of responsibility.

Evidence and documentation

A clear practical consequence of Volcafe is the importance of contemporaneous evidence. Carriers seeking to discharge their Article III Rule 2 burden should be able to demonstrate, for example:

• proper container selection and inspection

• consideration of appropriate ventilation measures

• voyage planning having regard to expected climatic conditions

• compliance with relevant industry guidance or carriage recommendations.

Absent such evidence, reliance on inherent vice is unlikely to succeed. Equally, from cargo interests’ perspective, gaps or inconsistencies in such records often provide the focus of challenge by a shipowner.

Volcafe in today’s geopolitical climate

When the Supreme Court handed down its judgment in 2018, the global trading environment, while not without friction, was materially more stable than it is today. Since then, the carriage of goods by sea has increasingly taken place against a backdrop of heightened geopolitical risk, supply‑chain disruption and regulatory scrutiny.

Events such as the disruption to Red Sea transits since late 2023, the expansion of sanctions regimes affecting trade with Russia, Iran and other jurisdictions, and growing sensitivity around key maritime chokepoints have placed carriers under operational and commercial pressures that were less acute at the time of the judgment. These developments have had a direct impact on how the Volcafe burden of proof operates in practice.

One of the most visible consequences has been large‑scale rerouting of vessels away from high‑risk areas, most notably the diversion of traffic around the Cape of Good Hope in response to security concerns in the Red Sea and, more recently, heightened sensitivities surrounding the Strait of Hormuz. Such diversions have increased voyage durations, exposed cargoes to different climatic conditions and extended the periods for which cargo remains in containerised carriage.

Against that background, arguments based on inherent vice have become more frequent. However, pursuant to Volcafe, that increased risk does not equate to reduced responsibility. Where a voyage is longer, riskier or more complex due to geopolitical conditions, the expectation that carriers will be able to demonstrate the exercise of reasonable care remains unchanged.

If anything, modern trading conditions may require carriers to take even greater account of route‑specific risks when planning ventilation, container selection, cargo monitoring and record‑keeping. The decision in Volcafe therefore continues to resonate strongly in an operating environment characterised by disruption, delay and uncertainty.

Conclusion

Several years on, Volcafe remains a leading authority and continues to influence the outcome of cargo claims involving inherent vice and cargo vulnerability more broadly.

For carriers, it underlines the need for robust systems, procedures and record‑keeping capable of demonstrating compliance with Article III Rule 2. For cargo interests and insurers, it provides clarity as to the allocation of proof and reinforces the centrality of the carrier’s duty of care.

If you’re dealing with any issues arising out of cargo claims, our Shipping team can advise on risk, evidence and next steps. Contact us to find out more about how we can help.