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Cargo of coffee damaged by condensation & 'inherent vice' defence under Hague rules

A highly debated area - 'burden of proof in cargo claims', provided with much needed clarity last month by the UK Supreme Ct. in Volcafe v. CSAV [2018]. In the process, def. of inherent vice (for purpose of carriage and not marine insurance) was also clarified.

Cargo of coffee beans packed in a container was damaged by condensation. Cargo claimants contended that carrier had not effected stowage properly as they had failed to line the container walls with sufficient paper to meet the threat of condensation. Carrier relied on the inherent vice exclusion (Art.IV.2.m) under the Hague rules to disclaim liability. So what does the carrier have to do to bring itself under this exclusion?

The Court held that carrier has to show that damage/loss was not caused by breach of Art.III(2), i.e. disprove negligence, or rely on one of the defences under Art.IV(2). If the carrier wants to benefit from the exceptions under Art.IV(2) then the carrier has to show that the cause of the damage was that relevant excepted peril. To benefit form inherent vice exception, carrier had to show that it took reasonable care or that any steps that could reasonably have been taken would have failed. In the process it disapproved two old judicial precedents – one 124 yrs old and the other 50 yrs.

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