(www.MaritimeCyprus.com) When Maersk accepted an apparently routine booking to carry containers loaded with calcium hypochlorite from Jebel Ali to Jeddah in 2015, it must have thought it knew what the job entailed. The chemical — widely used to disinfect swimming pools, drinking water and effluent discharges into rivers — is classified as a class 5.1 dangerous good in the pages of the UN Manual of Tests and Criteria. It was correctly labelled. And after all, shifting nasty stuff with a propensity to oxidise from A to B is an everyday task for a major liner outfit and normally undertaken without mishap.
The case arose from an explosion and fire aboard the MAERSK SEOUL in July 2015. More than a decade later, the shipper was held liable for losses exceeding USD 13 million.
The judgment is particularly noteworthy because the cargo had not simply been misdeclared or shipped without the carrier knowing that it was dangerous. The carrier knew that it was carrying calcium hypochlorite, a Class 5.1 dangerous good. The problem was the manner in which the cargo had been packed and stuffed into the containers.
What happened?
Sree Rayalaseema Hi-Strength Hypo Limited (Sree), an Indian chemical manufacturer, shipped a number of containers of calcium hypochlorite with Maersk. Three of those containers were loaded aboard the MAERSK SEOUL at Jebel Ali.
On 19 July 2015, shortly after the vessel departed Jebel Ali, an explosion and fire occurred in the forward part of the vessel.
Calcium hypochlorite is a self-heating substance. In ordinary circumstances, heat generated by its decomposition can dissipate into the surrounding environment. If that heat cannot escape sufficiently, however, increasing temperatures can accelerate the decomposition process until it becomes self-sustaining, resulting in violent decomposition and the ignition of surrounding combustible material.
The evidence pointed strongly towards Sree's cargo. Members of the crew reported a chlorine smell and observed debris and white material in the vicinity of the affected containers. More significantly, another consignment of calcium hypochlorite shipped by Sree at around the same time was subsequently discharged and cross-stuffed at Jebel Ali. During that operation, a further violent decomposition and fire occurred.
The Court accepted the expert evidence that the fire aboard the MAERSK SEOUL had been caused by the violent decomposition of calcium hypochlorite in one or both of Sree's containers.
The importance of how dangerous goods are packed
The central problem was the manner in which the calcium hypochlorite had been packed.
The applicable IMDG Code provisions required packages within containers to permit adequate air circulation throughout the cargo. Instead, the cartons containing the calcium hypochlorite had effectively been packed together as a block, restricting both air circulation and the dissipation of heat.
The expert evidence was that compliance with the IMDG Code requirement would have greatly reduced the risk of a runaway reaction and, more likely than not, would have prevented the casualty.
That finding is important. Dangerous goods obligations are not confined to correctly identifying and declaring the nature of the cargo. Depending on the cargo concerned, compliance with the applicable packing, stowage and segregation requirements may itself be critical to whether the cargo can safely withstand an ocean voyage.
The shipper's liability
The contracts of carriage incorporated Safmarine's standard terms. The Court found that those terms had been sufficiently brought to Sree's attention notwithstanding that Maersk could not produce a complete set of booking confirmations and final bills of lading for every shipment.
Those terms contained several provisions which proved significant.
In particular, Sree warranted that dangerous goods would be packed adequately to withstand the risks of carriage and in compliance with applicable laws and regulations. By failing to pack the calcium hypochlorite in accordance with the IMDG Code, Sree breached that warranty and became liable to indemnify Maersk for the resulting losses.
Sree had also warranted that its goods would not cause loss or damage to Maersk or other cargo. That warranty was similarly breached.
The Court went further and held that Sree was liable at common law. A shipper is under a duty to take reasonable care when presenting goods for carriage to ensure that they can be transported without causing physical damage to the property of others. Sree's failure properly to pack the calcium hypochlorite amounted to a breach of that duty.
The result was substantial. Maersk was entitled to recover payments made to the vessel's head owners and salvors, settlements with cargo interests and various other losses. The recoverable losses were quantified at approximately USD 13.18 million.
An interesting aspect of the judgment is that Maersk's own dangerous goods procedures were not beyond criticism. Its Dangerous Goods Team had not checked the relevant stuffing reports before shipment and the containers did not comply with aspects of Maersk's own acceptance policy. However, the Court found no evidence that this was the real or operative cause of the casualty.
A second dispute: where should the claim be heard?
The casualty also generated a lengthy jurisdictional dispute.
The Safmarine terms provided for the exclusive jurisdiction of the English High Court. Sree nevertheless commenced and pursued several proceedings before the Indian courts which were aimed, in substance, at preventing Maersk from pursuing its English claim.
The Commercial Court held that those proceedings constituted continuing breaches of the exclusive English jurisdiction agreement. It awarded Maersk its losses resulting from those breaches, including legal costs incurred in India and England, and granted a permanent anti-suit injunction together with mandatory relief requiring Sree to discontinue the Indian proceedings.
The message is straightforward: an exclusive jurisdiction clause is not merely procedural boilerplate. It is a contractual promise, and a party which deliberately litigates elsewhere may find itself liable not only to an injunction but also for the costs its counterparty incurs enforcing that promise.
Shipper Liability Under Bills of Lading and Common Law
The court found the shipper liable under Safmarine standard terms and English common law:
Breach of Express Warranty: Sree guaranteed cargo would be safely packed per IMDG Code regulations. Failing to do so constituted a direct breach.
Duty of Care: At common law, shippers owe a duty of reasonable care to prevent physical damage to maritime property.
Damages Awarded: Maersk recovered $13.18 million covering head owner indemnity, salvage claims, and third-party cargo settlements.
Though Maersk’s internal dangerous goods screening procedures were imperfect, the court ruled these operational gaps were not the legal cause of the casualty.
Enforcing Exclusive Jurisdiction Clauses and Anti-Suit Injunctions
Sree attempted to block claims by filing parallel litigation in India, breaching the contract’s English High Court exclusive jurisdiction clause.
The Commercial Court issued a permanent anti-suit injunction, ordering Sree to discontinue Indian proceedings and pay Maersk's full legal costs. Exclusive jurisdiction clauses act as enforceable contractual promises, not mere boilerplate terms.
Key Takeaways for Maritime Logistics
For Shippers: Hazmat declaration is insufficient. Strict adherence to IMDG Code physical packaging, stowage, and container stuffing guidelines is mandatory.
For Ocean Carriers: Maintain clear bill of lading terms, enforce dangerous goods acceptance procedures, and preserve third-party liability documentation following a maritime casualty.
For more details, you can access the court ruling by clicking below:
