Burden of proof remains with ship owner in proving terminal operator liability

20 december 2019 | Blog

The loading and unloading of cargo from ships is a key element in the transport chain. Such operations are carried out by a terminal operator (also known as a ‘stevedore’) which employs large cranes to carry out the loading/unloading. This equipment is sometimes managed from a remote control room. During these operations, damage to the ship can sometimes occur. This raises the question of if - and on what grounds - a terminal operator can be successfully held liable for such damage. On this issue, a recent decision  by the Rotterdam District Court upheld the standard of liability established in Dutch case law.

Lack of contractual framework

Generally, terminal operators conclude service agreements only with large shipping lines, with these agreements covering among other things the terminal operator’s liability. However, when it comes to individual ship owners and barge owners, in the majority of cases there is no contractual relationship. As a result, claims for compensation arising from damage sustained during terminal handling operations have a non-contractual basis, and are based on wrongful act (Article 6:162 and 6:170 of the Dutch Civil Code). The relevant question is whether the terminal operator has violated the standard of due care. The Dutch Supreme Court previously defined this standard of care for terminal operators in 1953. 

Nicolaos Pateras case

The Dutch Supreme Court ruled on the subject of stevedore liability in 1953 in a case involving damage to the vessel ‘Nicolaos Pateras’ (HR 6 March 1953, NJ 1953/791). In its decision, the Supreme Court held that a ship owner which voluntarily submits a ship for standard mechanical unloading is considered to be aware of and familiar with the presence of a certain danger. Thus, the ship owner is deemed to have agreed to the possibility that damage to the vessel may occur during operations, provided the stevedore has exercised a reasonable level of due care. The mere fact that damage has occurred during operations does not constitute a wrongful act by the stevedore. 

In the last decade, Dutch Courts have again started to apply the Nicolaos Pateras test in several cases involving terminal operator liability. The outcome of these cases has been varied. Debate has generally focused on the evidence submitted to support allegations that the terminal operator did not exercise reasonable care. After assessing the evidence provided by the ship owner, the Court has subsequently either awarded or rejected the claim. 

Recent Rotterdam Court case

Recently, the Rotterdam District Court  confirmed the standing case law after a vessel operator brought legal proceedings against a terminal operator. A grab crane was operated by an employee of the terminal operator during the vessel’s discharge operations. Soon after discharge was completed, it was noted there was damage to the vessel’s hold. The vessel operator claimed that the damage must have been caused by the crane grab touching the floor of the hold.

The Rotterdam District Court held – in line with the aforementioned Dutch case law – that the simple fact that damage had occurred was insufficient to constitute a wrongful act by the terminal operator. Since the discharge involved the usual mechanical unloading operations, the crane operator would only be deemed to be at fault if it had not exercised reasonable care. The burden of proof in this situation is on the vessel operator. In making its decision, the Rotterdam Court explicitly referred to the Nicolaos Pateras case.

In this case, the vessel operator failed to sufficiently substantiate its claim that the damage had been caused by the grab crane. For this reason, the Court rejected the claim.

Evidence of (a lack of) reasonable care

Remarkably, in the Rotterdam Court case the actual circumstances were never fully established: it was not even clear that the damage had actually occurred during unloading. As mentioned, in such an event, a terminal operator would in general not be liable. In most other cases, however, it would at least be certain that the damage occurred during loading or unloading operations. As previously stated, the terminal operator is then only liable for damage to a vessel if the ship owner demonstrates it did not exercise reasonable care. In showing a lack of reasonable care, the ship owner must provide evidence, for example by means of survey reports or witness statements. The terminal operator may have to provide counter-evidence.

Thus, the question of whether a terminal operator is liable for damage to a vessel greatly depends on the individual facts and circumstances of the case, together with the available evidence.

For further information on this topic, please contact Barbara Wilbrink, lawyer within our Transport & Trade team.

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