DATE DOWNLOADED: Sat Jun 10 06:36:18 2023

SOURCE: Content Downloaded from HeinOnline

Citations:
Please note: citations are provided as a general guideline. Users should consult their preferred
citation format's style manual for proper citation formatting.

Bluebook 21st ed.

Nick Margetson, Ground Breaking Development in the Division of the Burden of Proof
under English Law and the Hague Rules, 10 EJCCL 28 (2019).

ALWD 7th ed.

Nick Margetson, Ground Breaking Development in the Division of the Burden of Proof
under English Law and the Hague Rules, 10 EJCCL 28 (2019).

APA 7th ed.

Margetson, N. (2019). Ground breaking development in the division of the burden of
proof under english law and the hague rules. European Journal of Commercial Contract
Law, 10(2/3), 28-34.

Chicago 17th ed.

Nick Margetson, "Ground Breaking Development in the Division of the Burden of Proof
under English Law and the Hague Rules," European Journal of Commercial Contract Law
10, no. 2/3 (March 2019): 28-34

McGill Guide 9th ed.

Nick Margetson, "Ground Breaking Development in the Division of the Burden of Proof
under English Law and the Hague Rules" (2019) 10:2/3 EJCCL 28.

AGLC 4th ed.

Nick Margetson, 'Ground Breaking Development in the Division of the Burden of Proof
under English Law and the Hague Rules' (2019) 10(2/3) European Journal of Commercial
Contract Law 28

MLA 9th ed.

Margetson, Nick. "Ground Breaking Development in the Division of the Burden of Proof
under English Law and the Hague Rules." European Journal of Commercial Contract Law,
vol. 10, no. 2/3, March 2019, pp. 28-34. HeinOnline.

OSCOLA 4th ed.

Nick Margetson, 'Ground Breaking Development in the Division of the Burden of Proof
under English Law and the Hague Rules' (2019) 10 EJCCL 28 Please
note: citations are provided as a general guideline. Users should consult their
preferred citation format's style manual for proper citation formatting.

-- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and
Conditions of the license agreement available at
https://heinonline.org/HOL/License
-- The search text of this PDF is generated from uncorrected OCR text.
-- To obtain permission to use this article beyond the scope of your license, please use:
Copyright Information
 Nick Margetson* CASE NOTE

Ground breaking development in the division

of the burden of proof under English law and
the Hague Rules
Volcafe Ltd and others (Appellants/cargo interests) v Compania Sud Americana De Vapores SA
(Respondent/carrier)'

In its Judgment of 5 December2018 the Supreme Court

of the United Kingdom held that the burden of proof
under the Hague Rules should be allocatedin accordance
with the common law of bailment.
1. Introduction
When it comes to the question of which party has to
prove the existence or absence of the carrier's fault in
cargo claims under the Hague and Hague Visby Rules
there is no international uniformity and, until the judg-
ment of the Supreme Court of 5 December 2018 in the
Volcafe case which is the subject of this publication, there
was also no uniformity under English law.
The Hague Rules, which date from 1924, were amended
by the Protocols of 23 February 1968 and 21 December
1979. The thus amended Rules are known as 'The Hague
Visby Rules'. Both conventions exist side by side. Obvi-
ously the two conventions contain differences. However,
for the problem discussed in this article the relevant
provisions are paragraphs 1 and 2 of Articles III and IV
of the Hague Rules and the Hague Visby Rules. Because
these provisions are the same in the Hague Rules and
Hague Visby Rules I will use the abbreviation H(V)R to
indicate that I mean the Hague Rules as well as the Hague
Visby Rules.
The formal titles of the Hague Rules 2 and Hague Visby
Rules3 make clear that the conventions were not intended
as comprehensive instruments governing all aspects of
contracts of carriage of goods by sea. Contrary to the
Rotterdam Rules, the H(V)R do not contain a general
rule for the allocation of the burden of proof in cargo
claims. Below I shall discuss the different views which,
until the Volcafe court of appeal judgment was handed
down on 10 November 2016, prevailed under English
law. After that I shall discuss the Volcafe judgment.
2. Duties of the carrier and his rights and
immunities under the H(V)R
Although the H(V)R do not contain a general rule regard-
ing the allocation of the burden of proof, they do contain
two specific rules. These are contained in Article IV(1)
and in Article IV(1)q H(V)R.
The duties of the carrier are contained in paragraphs 1
and 2 of article III of the H(V)R. Article 111(1) H(V)R
provides that before and at the beginning of the voyage
the carrier shall exercise due diligence to:
a. make the ship seaworthy;
b. properly man, equip and supply the ship;
c. make the holds, refrigerating and cool chambers,
and all other parts of the ship in which goods are
carried, fit and sage for their reception, carriage and
preservation.
In short, the duty to exercise due diligence for the seawor-
thiness and cargo worthiness of the ship.
The second obligation of the carrier is contained in article
111(2) H(V)R. That provision provides that, subject to
the provisions of article IV, the carrier shall properly and
carefully load, handle, stow, carry, keep, care for and
discharge the goods carried. This duty concerns the duty
of the carrier with regard to the transported cargo. Under
English law the words 'subject to the provisions of article
IV' have led to the view that the duty with regard to ex-
ercising due diligence to make the ship seaworthy (article
111(1) H(V)R) is an overriding obligation because it is not
made subject to the provisions of 4 and article 111(2)
4
H(V)R is not an overriding obligation.

DOI 10.7590/187714618X15471960235068 1877-1467 2018 EuropeanJournal of Commercial Contract Law

N.J. Margetson (PhD, LLM, BSc) is a partner at Margetson Lawyers (Rotterdam). He is also an editor of this journal and a guest lecturer
at the University of Amsterdam.
A part of this publication is an adaptation of the Dutch language publication: N.J. Margetson, 'Belangrijke ontwikkeling met betrekking
tot de bewijslastverdeling onder Hague (Visby) Rules en Engels recht', NTHR 2017, p. 50-59.
1. Volcafe Ltd and others (Appellants) v Compania Sud Americana De Vapores SA (Respondent), [2018] UKSC 61.
2. The International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading, Brussels, 1924.
3. The International Convention for the Unification of Certain Rules of Law Relating to Bills of Lading. Brussels, 1924, as amended by
the Visby Protocol, 1968.
4. Maxine Footwear Co. Ltd v. Canadian Government Merchant Marine Ltd. (The Maurienne), [1959] 2 Lloyd's Rep. 105. See for an ex-
tensive discussion of the overriding obligations discussion N.J. Margetson, The system of liability of articles III and IV of the Hague
(Visby) Rules, Zutphen: Uitgeverij Paris 2008 (hereafter 'Margetson 2008'), chapter 4.

28 Europeanjournalof Commercial Contract Law 2018-2/3

 Ground breaking development in the division of the burden of proof under English law and the Hague Rules

Exceptions
Besides the duties contained in article 111(1) and 2 the
H(V)R provide the carrier with a list of so-called 'excep-
tions' which he can invoke in order to escape liability for
loss of or damage to the cargo. These exceptions are
contained in article IV(2). The most important exceptions
are the following:
The carrier is not liable for loss or damage caused by:
a. act, neglect, or default of the master, mariner, pilot
or the servants of the carrier in the navigation or in
the management of the ship [also known as a'naut-
ical fault', NJM]
b. fire, unless caused by the actual fault or privity of
the carrier [it is important to note that the proviso
adds for an extra possible step in the shifting burden
of proof, NJM]
c. perils, dangers and accidents of the sea or other
navigable waters [also known as a 'peril of the sea',
NJM]
q. any other cause arising without the actual fault and
privity of the carrier, or without the fault or neglect
of the agents or servants of the carrier, but the bur-
den ofproofshall be on the person claiming the be-
nefit of this exception to show that neitherthe actual
fault orprivityof the carriernor the fault or neglect
of the agents or servants of the carriercontributed
to the loss or damage (emphasis added. Note the
clear allocation of the burden of proof in the empha-
sised part, NJM).
The exception which is relevant in this case is the inherent
vice exception contained in article IV(2) m. That excep-
tion provides that the carrier is not liable for wastage in
bulk or weight or any other loss or damage arising from
inherent defect, quality or vice of the goods.
Besides these exceptions there is also the provision of
article IV(1) which, depending on the applicable national
law, is either considered as an allocation of the burden
of proof or as an additional exception which the carrier
can invoke in order to escape liability.
3. The allocation of the burden of proof in
article IV(1)
This paragraph provides that the carrier is not responsible
for loss or damage as a result of unseaworthiness unless
the unseaworthiness was due to the carrier's failure to
fulfil his duty following from article 111(1). Article IV(1)
provides that whenever loss or damage has resulted from
unseaworthiness the burden of proving the exercise of
due diligence shall be on the carrier or any person
claiming exemption under article IV(1).
In most jurisdictions article IV(1) is considered to be an
exception besides the exceptions of article IV(2). In that
view article IV(1) is the exception for loss or damage
caused by unseaworthiness for which the carrier is not
responsible, i.e. unseaworthiness which was not a result
of his failure to comply with article 111(1). However,
under English law article IV(1) is not treated as an excep-
tion but as an allocation of the burden of proof which
lays the burden of proving compliance with article 11(1)
H(V)R upon the carrier in cases wherein the loss or
damage was caused by unseaworthiness. The English
point of view is probably a result of the fact that under
English law actual unseaworthiness occurring after the
beginning of the voyage does not qualify as unseaworthi-
ness because the carrier is only obliged to exercise due
diligence before and at the beginning of the voyage. If
unseaworthiness arises after the beginning of the voyage
and causes cargo damage then that damage is not a result
of unseaworthiness but of an exception such as e.g. a
peril of the sea (article IV(2) c) for which the carrier is
not liable.6
Although it can well be argued that the last words of ar-
ticle IV(1): '..., claiming exemption under this article',
clearly indicate that the provision is meant as an addition-
al exception, the history of the provision indicates that
the framers of the Hague Rules intended article IV(1) as
an allocation of the burden of proof. It was intended to
end the problem introduced by the Isis judgement of the
U.S. Supreme Court regarding the application of the
Harter Act. In this judgement the U.S. Supreme Court
held that, under the Harter Act, before the carrier may
invoke an exception he must prove that he exercised due
diligence to make the ship seaworthy, even if there is no
causal connection between any unseaworthiness and the
damage. Therefore, under the Harter Act, proof of due
diligence to make the ship seaworthy is, as it were, a
condition precedent to the invocation of an exception.
Article IV(1) was included in the Hague Rules to make

5. Leesh River Tea Company, Ltd., and others v. British India Steam Navigation Company, Ltd. (The Chyebassa), [1966] 1 Lloyd's Rep.
450, 457 affirmed by the Court of Appeal, [1966] 2 Lloyd's Rep. 193. See also Margetson 2008, no. 226.
6. M.A. Clarke, Aspects of the Hague Rules, 's-Gravenhage: Martinus Nijhoff 1976 (hereafter Clarke 1976), p. 155. Clarke writes: 'The
only event of that name [unseaworthiness] having legal effect at common law is unseaworthiness before or at the time of sailing.', See
also McNair, J in Leesh River Tea Company Ltd., and others v. British India Steam Navigation Company Ltd. (The Chyebassa), [1966]
1 Lloyd's Rep. 450, 454 who said 'If you get seawater coming into a ship which was initially seaworthy, it does not come in as a result
of unseaworthiness, but as a result of perils of the sea.' See also Margetson 2008, no. 223.

Europeanjournal of Commercial Contract Law 2018-2/3 29

Ground breaking development in the division of the burden of proof under English law and the Hague Rules

clear that in principle, 7 under the Hague Rules, the carrier
no longer has to prove that he exercised due diligence to
make the ship seaworthy before he is allowed to invoke
an exception. In other words, due diligence to make the
ship seaworthy is not an element to be proved by the
carrier regardless of the exception he invokes.
or whether the plaintive had to rebut the defendants'
peril of the sea defence by proving that the peril of the
sea was occasioned by the defendants' negligent naviga-
tion so that the perils of the sea defence must fail.
Lord Escher said:

4. The allocation of the burden of proof in
article IV(2)q H(V)R
As was mentioned above, the q-exception also contains
a specific allocation of the burden of proof. To invoke
this provision successfully the carrier must prove the
cause 9 of the damage and also that the cause was neither
a result of his actual fault or privity nor of the fault or
neglect of his servants and agents. This allocation of the
burden of proof to the carrier follows from the words of
the q-exception.10
'When you come to the exceptions, among others, there
is that one, perils of the sea. There are no words which
say "perils of the sea not caused by negligence of the
captain or crew." You have got to read these words in
by a necessary inference. How can you read them in?
They can only be read in, in my opinion, as an exception
upon the exceptions. You must read in, "Except the loss
is by perils of the sea, unless or except that loss is the
result of the negligence of the servants of the owner."'1
(emphasis added, NJM)

5. Points of view regarding the allocation of the
burden of proof under English law until the
Volcafe judgment of 5 December 2018
Under English law two existing points of view concerning
the allocation of the burden of proof exist side by side
and are applied in cases concerning cargo claims under
the H(V)R. One point of view is based on The Glendar-
roch rule and the other allocates the burden of proof in
accordance with the common law of bailment. What the
carrier has to prove in order to be able to rely on an ex-
ception will depend on the applied point of view.
5.1. The Glendarrochrule
The Glendarroch rule was formulated by the Court of
Appeal in its judgement of 8 and 9 February 1894.11 The
facts leading up to that case can be summarised as follows:
The Glendarrochstranded on St. Patrick's Causeway in
Cardigan Bay resulting in sea water ruining certain sacks
of cement which were being carried under a bill of lading.
The bill of lading provided the carrier with an exception
for perils of the sea but contained no exception for negli-
gence. The claimants brought an action against the defen-
dants for non-delivery of the goods. The defendants
claimed exemption from liability on the ground that the
loss was occasioned by perils of the sea. In first instance
Sir F.H. Jeune ruled that, in order to excuse themselves
for the damage to the goods, it lay on the defendants to
show, not only a peril of the sea,12 but a peril of the sea
not caused by their negligence. On appeal the question
to be answered was whether the defendants had to prove
the absence of their negligence besides a peril of the sea
With regard to the burden of proof Lord Escher said:
'..., I think that according to the ordinary course of
practice each party would have to prove the part of the
matter which lies upon him (...) The plaintiffs would
have to prove the contract and the non-delivery (...) The
defendants' answer is: Yes; but the case was brought
within the exception - within its ordinary meaning (...)
Then the plaintiffs have a right to say there are exception-
al circumstances, viz. that the damage was brought about
by the negligence of the defendants' servants, and its
seems to me that is for the plaintiffs to make out that
second exception.'14 (emphasis added, NJM)
So, according to this judgment, negligence allowing the
peril of the sea to occur, forms an exception to the perils
of the sea exception. In order to defend against the defen-
dants' successfulprimafacieperils of the sea defence, the
claimants have to prove that the peril of the sea was the
result of negligence.
The other rule that exists and is applied under English
law is the allocation of the burden of proof which follows
from the common law of bailment.
5.2. The allocation of the burden ofproofbased on the
common law of bailment
Under English law a contract of carriage is also a contract
of bailment. The word bailment is derived from the old
French word 'bailer' meaning 'to give'. There are various
definitions of bailment one of which is that of Blackstone:

7. It will depend on the circumstances of the case and the exception on which the carrier is relying if the carrier has to prove that he exercised
due diligence to make the ship seaworthy. See § 6, example 3 (perils of the sea).
8. See e.g. Damodar Bulk Carriers, 903 F.2d, 675, 684. See also Margetson 2008, no. 220-233.
9. It is obvious that proof of the q-exception includes proof of the cause of damage. How else will the carrier be able to prove that he is
not liable if the cause of damage is unknown? That means that in case of an unknown cause of damagethe carrier remains liable. See T.J.
Schoenbaum, Admiralty and Maritime Law, Fourth Edition, St. Paul: Thomson West 2004, p. 635. See also Quaker Oats Co. v. M/V
Torvanger, 734 F.2d 238.
10. Regarding the burden of proof the q-exception provides: '..., but the burden of proof shall be on the person claiming the benefit of this
exception to show that neither the actual fault or privity of the carrier nor the fault or neglect of the agents or servants of the carrier
contributed to the loss or damage, ....
11. The Glendarroch,[1894] p. 226.
12. The question is of course 'what is a peril of the sea?'. This is discussed below (see par. 7, Example 3).
13. The Glendarroch,[1894] p. 226 and 231.
14. The Glendarroch,[1894] p. 226 and 231.

30 Europeanjournalof Commercial Contract Law 2018-2/3

 Ground breaking development in the division of the burden of proof under English law and the Hague Rules

why he is not liable for the damage. Wright goes on to

'Bailment, from the French bailler,to deliver, is a delivery
of goods in trust, upon a contract express or implied, that
the trust shall be faithfully executed on the part of the
bailee.
Blackstone gives a number of examples of contracts of
bailment of which I shall quote four so as to illustrate
various contracts of bailment:
- '[If cloth] be delivered, or (in our legal dialect)
bailed, to a tailor to make a suit of clothes, he has it
upon an implied contract to render it again when
made, and that in a workmanly manner;
- If money or goods be delivered to a common carrier,
to convey from Oxford to London, he is under a
contract in law to pay, or carry, them to the person
appointed;
- If a horse, or other goods, be delivered to an inn-
keeper or his servants, he is bound to keep them
safely, and restore them when his guest leaves the
house;
- If a pawnbroker receives plate or jewels as a pledge,
or security, for the repayment of money lent thereon
at a day certain, he has them upon an express con-
tract or condition to restore them, if the pledger
performs his part by redeeming them in due time.'
Under contracts of bailment the burden of proof is allo-
cated differently than it is under The Glendarroch rule.
This is seen in, for example, the CanadianHighlander
case (KBD)." In that case a part of the cargo (tin plates)
was damaged by rainwater during work to the ship while
she was in dry dock. The rain could enter the hold be-
cause the protective measures taken against rain had
probably been inadequate. However, in first instance,
the precise cause of the damage remained unknown. After
a lengthy discussion of the facts of the case Mr Justice
Wright said about the cause of the damage:
discuss the q-exception and the allocation of the burden
of proof contained therein which is that the carrier invok-
ing the q-exception has to prove the absence of his fault
or the fault of his servants or agents. Wright said:
'The words of the paragraph last cited [of the q-exception,
NJM] refer to the carrier as claiming the benefit of the
exception, and I think impliedly regards each of the other
exceptions the same onus is on the carrier: he must claim
the benefit of the exception, and that is because he has to
relieve himself of the prima facie breach of contract in
not delivering the goods in condition as received, from
the ship. I do not think that the terms of article III put
the preliminary onus on the goods-owner to give affirm-
ative evidence that the carrier was negligent. It is enough
if the goods-owner proves either that the goods were not
delivered or were delivered damaged.
The carrier is a bailee and it is for him to show that he
took reasonable care of the goods while in his custody
(which includes the custody of his servants on his behalf)
and bring himself if there be loss or damage, within the
specified immunities. It is, I think, the general rule appli-
cable in English law to the position of bailee that the de-
fendant (the bailee) is bound to restore the subject of the
bailment in the same condition as that in which he re-
ceived it, and it is for the defendant to explain or offer
valid excuse for not doing so. It is for him to prove that
reasonable care has been exercised.' 19 (emphasis added,
NJM)
Wright is of the opinion that the allocation of the burden
of proof contained in the q-exception applies to all excep-
tions.20 The shipper does not have to prove the failure of
the carrier to comply with his duties. The carrier has to
prove that he is not liable as if he were relying on the q-
* 21
exception.

'I therefore am fully justified in coming to the conclusion
that no adequate explanation has been given by either
side to account for the damage.' 17
One thing was however clear according to Wright: the
cargo was damaged by rainwater and was therefore a
result of inadequate care for the cargo in the sense of ar-
ticle 111(2) of COGSA 1924 (the English codification of
the Hague Rules in those days)." Wright further held
that the bailee (i.e. the carrier) was obliged to deliver the
goods in the same condition in which he had received
them. If the bailee/carrier fails to do so he must prove
5.3. H(V)R - Interim conclusion regardingthe division
of the burden of proof until the Volcafejudgment
of 5 December2018
Under English law the burden of proof was either allo-
cated in accordance with the Glendarroch rule or in ac-
cordance with the common law of bailment. It has been
said that the Glendarrochrule creates considerable diffi-
culties for cargo claimants in respect of matters peculiarly

15. William Blackstone, Commentaries on the Laws of England, A Facsimile of the First Edition of 1765-1769, Volume II Of the Rights of
Things (1766), Chicago & London: The University of Chicago Press, 1979 (hereafter Blackstone 1766), p. 452. A comparable definition
is found in Wharton's Law Lexicon, 14th edition, third impression London: Stevens and Sons, Limited/Sweet and Maxwell, Limited:
1949.
16. Gosse Millard Ltd. v. Canadian Government Merchant Marine Ltd. (The CanadianHighlander), (1927) 28 L1.L.L.Rep. 88 (KBD).
17. Gosse Millard Ltd. v Canadian Government Merchant Marine Ltd. (The CanadianHighlander), (1927) 28 L1.L.L.Rep. 88, 101 and 102
(KBD).
18. Gosse Millard Ltd. V. Canadian Government Merchant Marine Ltd. (The CanadianHighlander), (1927) 28 L1.L.L.Rep. 88, 102 (KBD).
19. Gosse Millard Ltd. v. Canadian Government Merchant Marine Ltd. (The CanadianHighlander), (1927) 28 L1.L.L.Rep. 88, 103 (KBD).
20. See The CanadianHighlander(1927), 28 L1.L.L.Rep. 88, 103. This view is also supported by the Dutch author Royer: S. Royer, Hoof-
dzaken der vervoerdersaansprakelijkheidin het zeerecht, Zwolle: W.E.J. Tjeenk Willink: 1959, p. 183. See for critical commentary on
this view: Margetson 2008, nr. 490.
21. As will be seen below, this point of view was confirmed by the Supreme Court in the Volcafe case which is the subject of this publication.

Europeanjournal of Commercial Contract Law 2018-2/3 31

Ground breaking development in the division of the burden of proof under English law and the Hague Rules
within the knowledge of the carrier.22 Also it has been
said that 'it is not easy to see why these rather special
English rules [the Glendarrochprinciples, NJM], especial-
ly if one adds that which makes unseaworthiness an
overriding obligation, should be visited upon an interna-
tional convention.'23 The same however has been said
about the application of the English bailment principles
*24
to an international convention.
Scrutton is of the opinion that the burden of proof should
be allocated in accordance with The Glendarrochrule.25
Initially the authors of Carver agreed with Wright's view
but later authors took a different point of view. The
present authors of Carver do not express an opinion re-
garding the question which point of view is correct.26
6. Judgment of the Court of Appeal in the Volcafe
case 2
CS27
In this case the court of appeal addressed the problem of
the two principles under English law regarding the alloc-
ation of the burden of proof.
The case concerned damage caused by condensation in
20 containers containing coffee beans which had been
loaded between January and April 2012 and which had
been shipped to North Germany in nine shipments. The
relatively warm coffee beans caused moisture in warm
air to rise from the stow. On contact with the cold roof
of the container the air condensed and fell on to bags at
the top of the cargo, and also to run down the sides of
the container wetting bags on the outside of the stow.
One of the questions which had to be answered in first
instance and on appeal was whether the carrier had to
prove the absence of his negligence or whether the cargo
interests had to prove the existence of the carrier's negli-
gence.
In first instance the judge, David Donaldson QC, held
that the burden of proof had to be allocated in accordance
with the res ipsa loquitur28 principle. This means that if
goods had been loaded in good condition and were dis-
charged in a damage condition then breach of article 111(2)
can be inferred by the court. Therefore the carrier has
the burden of negating such a breach.29
Before stuffing, the bare corrugated steel of the containers
were lined by the stevedores with Kraft paper. The
primary question was whether or to what extent that was
properly effected and adequate to meet the threat of
condensation, and, if not, whether the carrier was liable
for any consequent damage. After having analysed the
22. Carver 2011, nr. 9-243.
23. Carver 2011, nr. 9-242. The Torenia, [1983] 2 Lloyd's Rep. 210, 219.
24. Margetson 2008, nr. 513. See also the discussion hereinbelow.
25. Scrutton 2015, Article 123.
26. Carver 2011, nr. 9-243.
27. Court of Appeal (Civil Division), 10 November 2016, [2016] EWCA Civ 1103. This judgment also contains a good discussion of the
inherent vice defence (article IV(2) m H(V)R).
28. This can be translated as 'the thing speaks for itself'.
29. Volcafe e.a. versus CSAV, [2015] EWHC 516 (Comm), ro. 17.
30. Volcafe e.a. versus CSAV, [2015] EWHC 516 (Comm), ro. 15.
31. Volcafe e.a. versus CSAV, [2015] EWHC 516 (Comm), ro. 50.
32. Par. 50 of the appeal judgment.
32
facts, Donaldson concluded that the carrier had failed to
show that no amount of Kraft paper would have preven-
ted the wetting. Furthermore he held that even if the
carrier had succeeded in such proof it would not avail
the carrier because it is obliged to carry the goods in ac-
cordance with article 111(2). Under English law that means
'in accordance with a sound system'.30 Donaldson held
that the carrier had failed to establish that it adopted a
sound system. 1 The result was that the carrier was held
to be liable for the damage.
Even though the case concerned the relatively small
amount of USD 62.500 the carrier appealed.
In first instance Donaldson had not discussed the Glen-
darroch and the bailment principles. These were only
discussed on appeal. In first instance and on appeal the
carrier had invoked the inherent vice defence contained
in article IV(2)(m). After an extensive analysis of the
various views on the allocation of the burden of proof
Mr Justice Flaux held:
'In my judgment, the correct analysis (...) is that once
the carrier has shown a prima facie case for the application
of the exception of inherent vice in article IV rule 2 (in),
the burden then shifts to the cargo claimant to establish
negligence on the part of the carrier,such as will negative
the operation of the exception. This analysis is consistent
with the weight of the authorities, which apply the prin-
ciples enunciated in the Glendarroch, even where the
Hague Rules apply to the contract of carriage.'3 2 (emphas-
is added, NJM)
In doing so the court of appeal chose for the application
of the Glendarroch rule. Regarding the argument that
English law should not be applied to the allocation of the
burden of proof in an international convention Flaux
held in par. 50:
'I also consider that it is in accordance with the principle
that he who alleges must prove. That may be a principle
of the common law, but it is one which accords with fair-
ness and, although the Hague Rules are to be construed
against the background that they are an internationally
adopted convention, I do not consider that there is any-
thing in the Rules themselves which points to a different
construction than that, ... ' (emphasis added, NJM)
Regarding the proof of the existence or absence of the
carrier's negligence Flaux held:
Europeanjournalof Commercial Contract Law 2018-2/3
 Ground breaking development in the division of the burden of proof under English law and the Hague Rules

'...,in relation to exceptions such as Article IV rule 2(m)
(or for that matter other exceptions such as rule 2(c)), the
carrierdoes not need to disprove negligence to rely upon
the exception. On the contrary, the fact that, in the case
of the "catchall" exception in rule 2 (q), it provides ex-
pressly that the burden of proof is on the carrier to dis-
prove, inter alia, fault or neglect, is a strong pointer to
the correct analysis being that, in the case of the other
exceptions, including rule 2(m), the application of the
exception is not dependent upon the carrier disproving
negligence.' (emphasis added, NJM)
Thus court of appeal held that the Glendarrochprinciple
prevails over the bailment principle. That means that the
carrier need not prove the absence of his negligence be-
sides proving the existence of an excepted peril in order
to escape liability.
7. Judgment of the Supreme Court
The cargo interests, Volcafe and others, appealed against
the judgment of the court of appeal. The Supreme Court
handed down judgment on 5 December 2018. It reversed
the judgment of the court of appeal and restored the order
of the deputy judge.
The judgment was written by Lord Sumption with Lord
Reed, Lord Wilson, Lord Hodge and Lord Kitchin
agreeing.
The cargo owners' primary case was that in breach of
their duties as bailees the carrier failed to deliver the car-
goes in the same good order and condition as that recor-
ded on the bill of lading. Alternatively, they pleaded that
in breach of article 111(2) of the Hague Rules they had
failed properly and carefully to load, handle, stow, carry
keep, care for and discharge the cargoes. They pleaded
that the carrrier failed to use adequate or sufficient Kraft
paper to protect the cargoes from condensation.
Lord Sumption first discusses bailment at common law.
He describes two fundamental principles of bailment.
The first principle is that the bailee is not an insurer. His
duty is limited to taking reasonable care of the goods.
The second principle is that although the obligation of
the bailee is thus a qualified obligation to take reasonable
care, at common law he bears the legal burden of proving
the absence of negligence. He need not show exactly how
the injury occurred, but he must show either that he took
reasonable care of the goods or that any want of reason-
able care did not cause the loss or damage sustained.
After his discussion of bailment at common law, Lord
Sumption discusses the relevant provisions of the Hague
Rules amongst which the obligations of the carrier under
article 111(2) and the inherent vice exception contained
in article IV(2)m.
Lord Sumption first discusses the division of the burden
of proof under article 111(2) and then he discussed the
division of the burden of proof under article IV(2)m.
7.1. Burden ofproof article 111(2)
The carrier pleaded that the cargo interests had the burden
of proving a breach of article 111(2) because:
i. de Hague Rules constitute a complete code govern-
ing the care of the cargo;
ii. an international convention such as the Hague Rules
should not be construed in the light of particular
features of English law or any other domestic system
of law;
iii. article 111(2) of the Hague Rules, by imposing an
obligation to take reasonable care of the cargo, dis-
places the English law rule about the burden of
proof, because as a general rule he who asserts must
prove.
Lord Sumption held that, in his judgment, each of these
steps in the argument is fallacious. Regarding the first
step he pointed out that, apart from the division of the
burden of proof in article IV(1) and article IV(2)q the
Hague Rules do not deal with questions of evidence or
the mode of proving a breach of the prescribed standard
or the application of an exception. These matters are for
the applicable law of the forum. Regarding the second
step of the carrier's argument he held that the principle
that the custodian of goods has a legal responsibility to
justify their loss or redelivery in damaged condition is
common to civil jurisdictions as well. Therefore the
second step of the carrier's argument has no bearing on
this case.34 Lord Sumption held that the carrier's third
proposition is, in his view, based on a misconception.
The carrier argued that the reason why at common law
the bailee had the burden of disproving negligence was
that at common law a bailee had a strict obligation to re-
deliver the goods in the same condition as when received.
The position, he submitted, was different where the obli-
gation was a qualified obligation to take reasonable care,
as it is in article III(2)."
Lord Sumption repeated that the common law obligation
of a bailee is not strict, save in the somewhat theoretical
case of common carriers. 6 His obligation is to take rea-
sonable care. The common law has always treated that

33. Par. 50 of the appeal judgment.

34. Lord Sumption refers to French, Scottish and French law.
35. The carrier uses the expression 'qualified obligation to take reasonable care'. Probably this is a reference to the words 'Subject to the
provisions of article IV' at the beginning of article 111(2) H(V)R. In the Travaux Pr6paratoires it says in this respect: 'That [art 3 lid 2
Hague Rules, NJM] is an absolute obligation on the carrier during the voyage, and it is only qualified by the exceptions in Article IV.'
See Margetson 2008, nr. 122.
36. Lord Sumption writes the following about common carriers: 'The characteristic feature of a common carrier was that he held himself
out as accepting for carriage the goods of all comers on a given route, subject to capacity limits. As such, he was strictly liable at common
law for loss of or damage to the cargo subject only to exceptions for acts of God and the Queen's enemies. The absence of negligence
was irrelevant. But although the position of common carriers is commonly referred to by way of background in the case law, as it was

Europeanjournal of Commercial Contract Law 2018-2/3 33

Ground breaking development in the division of the burden of proof under English law and the Hague Rules
as consistent with a rule imposing on him the burden of
disproving negligence. In the same way, the imposition
of a corresponding duty of care on the carrier by article
111(2) is consistent with his bearing the burden of disprov-
ing negligence.
Lord Sumption points out that it is apparent from the
scheme of the Hague rules that they assume that the car-
rier has the burden of disproving negligence. This is be-
cause of the relationship between articles III and IV. Ar-
ticle 111(2) is expressly subject to the provisions of article
IV. A number of the exceptions in article IV cover negli-
gence or omissions of the carrier which would otherwise
constitute breach of article 111(2). He mentions article
IV(1) which covers loss or damage caused by unseawor-
thiness which is not a result of the carrier's failure to ex-
ercise due diligence as is required by article 111(1) and
article IV(2) a (the nautical fault exception). Lord Sump-
tion goes on to say that it is common ground that the
carrier has the burden of proving facts which bring him
within an exception. It would be incoherent for the law
to impose the burden of proving the same facts on the
carrier for the purposes of article IV but on the cargo
owner for the purposes of article 111(2). Furthermore he
holds that a contract of carriage by sea is a species of
bailment for reward on terms. For these reasons Lord
Sumption holds that in principle37 where cargo was
shipped in apparent good order and condition but is dis-
charged damaged, the carrier bears the burden of proving
that that was not due to its breach of the obligation in
article 111(2) to take reasonable care.
7.2. Burden ofproof article IV(2) m
Lord Sumption repeats that although the q-exception is
the only exception containing a division of the burden
of proof, it is established law that the carrier bears the
burden of bringing himself within an exception. This was
not disputed by the carrier. However the carrier pleaded
that once he has proven that the cargo suffered from an
inherent vice, the cargo interests must prove that it was
only because of the carrier's negligence that the inherent
vice resulted in damage.
Lord Sumption discusses three nineteenth century judg-
ments3 8 concerning damage caused by a peril of the seas.
In those cases it was held that the absence of negligence
forms part of the perils of the seas exception. Therefore,
in order to prove a peril of the seas, the carrier must also
prove the absence of his negligence. He goes on to discuss
the Glendarroch case. He points out that in that case a
distinction is made between the absence of negligence
form part of the exception and presence of negligence
constituting an exception to the exception. He finds such
a distinction unsatisfactory. In par. 33 of his judgment
he holds:
in the judgments below, it is no longer a useful paradigm for the common law liability of a shipowner.' (see par. 8 of the Supreme Court's
judgment in the Volcafe case).
37. Lord Sumption says 'in principle' because case law may have introduced a different rule. After a discussion of the authorities he concludes
that no other rule follows from the case law.
38. Notara v Herderson (1872) LR 7 QB 225, The Xantho (1887) 12 App Cas 503 en Hamilton, Fraser& Cov andorf& Co (1887) 12 App
Cas 518.
34
'The "GLENDARROCH" has stood for a long time.
But it has rarely featured in the reasoning of subsequent
case law, and the basis on which it was decided is technic-
al, confusing, immaterial to the commercial purpose of
the exception and out of place in the context of the Hague
Rules. The decision may have been justifiable in the more
formal conditions of pleading and trial practice in the
1890s, or as applied to the notional bill of lading terms
which the Court of Appeal was considering. But as the
source of a generalrule governing the burden ofproof, it
should no longer, in my view, be regardedas good law.
I consider that the carrierhas the legalburden of disprov-
ing negligence for the purpose of invoking an exception
under article IV 2, just as he has for the purpose of article
II. 2.' (emhasis added NJM)
This judgment has ended the uncertainty regarding the
division of the burden of proof. The Glendarrochcase is
no longer relevant for the discussion regarding the divi-
sion of the burden of proof. A carrier has to prove the
absence of his negligence as well as the facts bringing him
within an exception of article IV.
8. Conclusions
This case makes clear that under English law and the
H(V)R cargo interests bringing a claim for loss or damage
now only have to prove that the cargo was shipped in
apparent good order and condition and was discharged
damaged. They need not prove that loss or damage was
a result of the carrier's failure to perform his obligation
under article 111(2). Indeed, the carrier has the burden of
proving that he complied with his obligations under arti-
cle 111(2). Furthermore, if the carrier wishes to rely on
an exception contained in article IV, he bears the burden
of proving the facts which will bring him within an excep-
tion and the absence of his negligence.
This judgment is not only relevant for the H(V)R but
also for the common law of bailment in general. It em-
phasises that under common law the bailee is not an in-
surer. His duty is limited to taking reasonable care of the
goods.
Europeanjournalof Commercial Contract Law 2018-2/3