A court has ruled that energy from waste specialist MVV Environment is not liable for an explosion in 2017 on board a ship carrying unprocessed incinerator bottom ash from its facility in Plymouth to the Netherlands.
The dispute centres on whether MVV should be liable for costs to the defendant, German shipping firm NTO Shipping, of €676,000.
The case took place on 7 May 2020
NTO Shipping claimed that because MVV was listed as the shipper on the Bill of Lading — a list of a ship’s cargo in the form of a receipt given by the master of the ship to the person consigning the goods — it should be liable.
However MVV says it should not have been listen as the shipper as it entered into a contract with the Dutch incinerator bottom ash (IBA) processing firm RockSolid, and the material was no longer its responsibility once it left the Plymouth EfW plant.
The contract signed in 2013 sees RockSolid organise transport of the unprocessed IBA (or UIBA) to the RockSolid plant in the Netherlands and for its treatment, recycling and disposal “in consideration of a monthly payment” made by MVV.
Tribunal
In October 2019, a tribunal decision by the London Maritime Arbitrators Association found MVV responsible for the incident in January 2017 as it was listed as the shipper of the material on the Bill.
Upon appeal at the Commercial Court at the Royal Courts of Justice in Fetter Lane, London, on 7 May 2020, Justice Mark Pelling said MVV should not have been consigned as the shipper, and the “tribunal’s conclusions to the contrary effect were wrong”.
Justice Pelling handed down his ruling on 4 June.
Welcomed
MVV was represented in this case by Simon Rainey QC of Quadrant Chambers and Thomas Steward of The 36 Group.
“The mere naming of a party as ‘Shipper’ on the face of the bill by a person with no actual or ostensible authority to do so creates no contractual effect”
Mr Rainey said: “This was a robust and welcome reaffirmation by the Commercial Court that, while possessing some special features as to negotiability, a bill of lading is a contract like any other. The mere naming of a party as ‘Shipper’ on the face of the bill by a person with no actual or ostensible authority to do so creates no contractual effect. There is no ‘special rule’ because of the status of a shipper under a bill of lading. Rigorous contractual analysis must still be applied.”
Contract
The case centres on contract between MVV and the Dutch IBA processing firm RockSolid BV, to process the 60,000 tonnes per annum of IBA generated at MVV’s EfW facility in Plymouth, which has an annual capacity of 245,000 tonnes.
According to the court documents, the contract between MVV and RoskSolid says that “risk and title in respect of IBA shall pass to the contractor [RockSolid] once [the UIBA] is loaded onto the contractor’s vehicle(s) at the EfW facility.”
Justice Mark Pelling said: “The claimant was not responsible in any way for transporting the material from its plant in Plymouth to Victoria Wharf, or for its storage at Victoria Wharf or for its shipment onto vessels for transport to the Netherlands or for its transport by ship from Victoria Wharf to RS’s plant in the Netherlands”.
Explosion
On 12 January 2017, the consignment of 2,333 tonnes of UIBA had been shipped on board the MV Nortrader, a vessel chartered by RockSolid at Victoria Wharf for carriage to the Netherlands.
An explosion occurred on board the vessel as a result of which her chief engineer was injured and in consequence the defendant [NTO Shipping} suffered losses of €676,561.46, €45,000 and US$840.
NTO Shipping claimed the losses from MVV “on the basis of an alleged contract of carriage to which the claimant was alleged to be a party evidenced by the Bill of Lading and commenced an arbitration on the basis that an arbitration agreement had been incorporated by reference into the Bill of Lading”.
MVV denied the claims on the basis that it was not the shipper and was not a party to the contract of carriage evidenced by the Bill of Lading, and had been wrongly named as such.
Dispute
Under the contract between MVV and RockSolid, UIB was shipped to RockSolid’s plant 33 times between 25 June 2015 and 12 January 2017.
The MVV Plymouth plant during construction in June 2014
The Bills of Lading for each of these shipments identified the shipper as being MVV, the court document says, rather than RockSolid, which was named the consignee.
Following the explosion an investigation by the Marine Accident Investigation Branch concluded that MVV had been wrongly identified in the relevant bill of lading as the shipper.
Ruling
Justice Pelling ruled that the ultimate issue that arises from the case is whether the claimant was party to the contract of carriage evidenced by the Bill of Lading.
“If it was not then it is common ground that it was not a party to an arbitration agreement with the defendant and the Tribunal had no jurisdiction”.
When delivering his decision, he said: “There is no, even arguable, basis for contending that the claimant had authorised RockSolid or Sanders Stevens to enter into a contract of carriage on its behalf in relation to any UIBA collected.
“It is entirely clear that exclusive responsibility for transportation of all UIBA from the claimant’s plant to Rock Solid’s plant in the Netherlands rested with RS.”
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Source: letsrecycle.com Waste Managment
