A UK court has ruled that Brazilian bulker operator Alianca Navegacao e Logistica failed to properly ventilate a grain shipment that arrived damaged in South Africa in a key case over cargo care

The former Hamburg Sud company, which has since been sold to China Navigation Co, had sued Swiss agriculture company Ameropa in the High Court seeking demurrage and associated expenses totalling more than $858,000 over extensive delays in a bulker journey.

Alianca, the disponent owner of the 56,000-dwt Santa Isabella (built 2006), had chartered the ship to Ameropa in 2016 when the ship was carrying 44,000 tonnes of white corn.

Barrister Andrew Henshaw QC, sitting as a High Court judge, found the cargo to have suffered extensive damage on arrival at the ports of Durban and Richards Bay, after a 39-day voyage from Topolobampo, Mexico.

"Although this is a demurrage claim for a relatively modest amount of money, it raises certain significant issues regarding the duties of shipowners as to (a) choice of voyage route and (b) cargo care including the ventilation of corn and other hygroscopic cargoes," Henshaw wrote in his judgment following the trial.

Ameropa argued that the damage and delays were caused by the vessel taking the Cape Horn route rather than the Panama Canal route, a failure to ventilate the cargo, a failure to disinfest areas outside of the cargo holds following loading at Topolobampo or the failure to travel to Durban fast enough.

But Alianca said the delays at Durban and Richards Bay resulted from the inability to ventilate the cargo during the first 12 days of the voyage due to fumigation restrictions. It also claimed that weather and sea conditions prevented ventilation for the majority of the journey to Durban via Cape Horn, which was the usual route and permitted under the contract.

The company's solicitors denied any failure properly to ventilate when it was safe, or any failure to disinfest, saying damage and delays were no fault of its own.

Slower speed

Henshaw said that on 1 June 2016, Alianca sent voyage instructions to the master, which included instructions to proceed at "eco speed" of about 12 knots, which is less than the 13.3 knots referred to in the charter contract.

He added: "It is not, however, possible to attribute any particular degree of damage or delay to this breach of contract. Probably most relevantly, it is not possible to say that, but for the breach, the cargo would have arrived at Durban with any lesser degree of damage than the six to 12 inches of dry crust that I have found to be the likely outcome given proper ventilation during the actual voyage."

The judge said it is common ground that the cause of the damage in this case was "ship's sweat", which refers to condensation that forms directly on a vessel's structure when the air within a hold, made warm and moist by the cargo, comes into contact with cold surfaces as it moves into cooler climates.

Weevil infestation

Following arrival at Durban, the cargo was found to have an infestation of weevils, requiring fumigation.

Insect populations requiring further fumigation were detected on 13 August, 23 September and later in hold three at Richards Bay.

Discharge at Richards Bay was delayed because of this reinfestation, as time was lost while fumigation took place.

Ameropa argued that the repeated reinfestations were the result of significant adult insect populations in cargo debris on deck, which entered the holds and thrived in the moist, warm atmosphere produced by the choice of route and failure to ventilate.

"I consider it unlikely that the initial fumigation at the load port was ineffective," Henshaw said.

The load port fumigation used three times the recommended dose, and there is no suggestion of any defect in the fumigation process.

Henshaw ruled that Alianca was not in breach of the charter contract by taking the Cape Horn route to Durban.

"Cape Horn route was a usual and reasonable route for the purposes of identifying the contractual route, and so did not amount to a deviation," he said.

He also found the vessel did not proceed to Durban in accordance with its warranted speed, though it was not possible to identify any particular element of damage or loss caused by that breach.

Cargo not properly ventilated

"The cargo was not properly and carefully ventilated in accordance with a sound system, in breach of Alianca's duties properly to care for the cargo," he added.

"That breach was the cause of damage to the cargo, which but for the breach would on balance of probabilities have arrived with damage limited to six to 12 inches of dried crust on the top of each stow."

That in turn was the cause of the long delays in discharging at Durban.

"Alianca was also in breach of its duties properly to care for the cargo by failing properly to disinfest the vessel's topsides, that being on the balance of probabilities the likely cause of the insect infestations encountered at Durban and Richards Bay,"

Henshaw said that on the balance of probabilities, if it was not for Alianca's breaches, the discharge process at Durban would have been completed within 8.5 days, which is less than four days beyond the laytime allowed in the contract. And the Richards Bay discharge process would have been completed within the allowable laytime.