We were recently involved in a case of containerised refrigerated cargo (peas) suddenly affected by a total blackout of the carrying ship, followed by a considerable delay, which ended up in a total loss of the subject cargo. It transpires that the blackout was caused by a fire on board, leaving all refrigerated containers with a power outage. Due to the impossibility of restoring the power supply within a reasonable time frame some containers had to be trans-shipped or discharged at a port of refuge, adding some considerable delays into the already ill-fated voyage (in some cases the cargo was delayed beyond 10 days from its original ETA). A significant part of the refrigerated cargo was either partially or totally lost. 

The resulting legal dispute was based on a “fire defence” in an attempt to absolve carriers' from liability. Furthermore, as usual, Bills of Lading ruled out any liability for delay. During negotiations, it was further claimed that the trans-shipment process was conducted promptly and with utmost due diligence.

In general, a “fire defence” excludes carriers' liability unless the fire was caused by the actual fault or privity of the carrier and / or by a failure to comply with the standard duty of delivering a seaworthy ship, placing cargo interests in the burdensome duty of collecting the evidence to disregard any such defences. Leveraged by our local presence, we were able to send on board a team of experts whilst the ship was conducting repairs in Panama. It was concluded that the cause of the fire was an unexpected ignition of fuel released from a high-pressure line which, according to standard safety requirements, should have been properly maintained and inspected. Additionally, relying on local legislation at the port of discharge (at least those mentioned in the relevant Bills of Lading), we were able to force the carrier to disclose additional evidence relating to the incident. The carrier was unable to rely on their standard defence, therefore being forced to take a more favourable position in relation to case settlement.

The case was finally settled in agreement in the range of 25-30% of the overall amounts claimed.

This case shows that “fire defence” can be successfully challenged and highlights the importance of local knowledge.