Can a general indemnity be implied in a voyage charter when a clean B/L is issued for goods which were infact loaded in a pre-damaged condition but the damage was not apparent to the master?
In The Tai Prize [2019] cargo of soyabeans was found damaged upon arrival. Cargo was loaded in a pre-damaged condition. B/L was presented as clean on-board and signed on master's behalf. The owner was directed by the Chinese court to pay $1m to cargo receiver. Time charterer (TC) had to reimburse the owner 50% of these costs, and TC then looked towards voyage charterer for recovery of $0.5m.
Arbitrators decided against voyage charterers. They were now appealing.
Interpreting Art.3 r.3 of Hague rules, the court pointed out that there is a difference between information provided by shipper on B/L wrg (a) to identification of goods, nos. of packages etc. which the master has to accept at face value; and (b) representation as to apparent condition of cargo which is exclusively an assessment by the master. As a matter of law, B/L was not inaccurate as master could not reasonably have determined the damaged condition of cargo. No indemity could be implied in VC especially when the drafters of Hague rules chose not to expressly provide for such a provision. A win for VC.
Note: This decision was appealed. In 2021, the higher court dismissed the appeal. Blog link here - https://www.m-info.org/post/shipped-in-apparent-good-order-and-condition-apparent-to-whom
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