Standard Oil Co of New York v Clan Line of Steamers Ltd (Owners of SS ‘Clan Gordon’): HL 23 Nov 1923

The owners of a line of steamers agreed to supply a vessel for the carriage of goods from New York to China. The charter-party provided that the contract should be subject to all the exemptions contained in the Harter Act of the United States of 1893, clause 3 of which provides ‘That if the owner of any vessel transporting merchandise or property to or from any port in the United States of America shall exercise due diligence to make the said vessel in all respects seaworthy, . . neither the vessel, her owner or owners, agents, or charterers shall become or be held responsible for damage or loss resulting from faults or errors in navigation or in the management of the said vessel.’ The bills of lading issued in conformity with that Act provided that the following exemptions from liability should apply:-‘Perils of the sea . . or any latent defect in hull, machinery, or appurtenances . . or other accidents of navigation of whatsoever kind (even where occasioned by the negligence, default, or error in judgment of the pilot, master, mariners, or other servants of the shipowner, not resulting, however, in any case from want of due diligence by the owners of the ship. . . ‘
The ‘Clan Gordon,’ the vessel supplied, was a ‘turret’ steamer, a type of vessel in regard to which the builders had, consequent on a disaster to a vessel of that class, circulated to owners of such vessels loading instructions which contained, inter alia, the following direction:-‘This vessel is not intended to load down to her marks with a homogeneous cargo without water ballast.’ This information was not supplied to the master of the ‘Clan Gordon,’ who had a wide experience in the command of ships, and of ‘turret’ ships in particular. When she left New York the ‘Clan Gordon,’ which was loaded with a homogeneous cargo, had two of her water-ballast tanks full and was down to her marks. Two days out the master, thinking his ship would trim and sail better without water ballast, ordered the tanks to be pumped out. When they were nearly empty the ship, in fine weather and in a calm sea, turned turtle on the application of the port-helm owing to the loss of stability due to the withdrawal of the water in the ballast tanks. In an action of damages by the owners of the cargo against the owners of the ship, held ( rev. the judgment of the First Division, diss. Lord Sands) that the ‘Clan Gordon’ was not, having regard to her structure as a turret vessel and to her loading, seaworthy without having two out of her six ballast tanks filled to the extent of containing 290 tons of water; that this fact had not been communicated to the master by the owners who were aware of it; that it was the duty of the owners to have brought to his notice the loading instructions issued by the builders regarding the necessity for water ballast, and to have informed him that the vessel was only conditionally seaworthy; that in neglecting to do so they had failed to use due diligence to make the vessel seaworthy; and that accordingly they were liable for the loss. Held further, that the owners were not entitled to the limitation of liability provided for by section 503 of the Merchant Shipping Act 1894, the loss not having taken place without fault or privity on their part.

Earl of Birkenhead, Viscount Haldane, Lord Atkinson, and Lord Parmoor
[1923] UKHL 15, 61 SLR 15


Updated: 22 January 2022; Ref: scu.633269