England: Supreme Court (UK) decides on inherent vice defence
In a controversial case, Volcafe Ltd and other v Compania Sud Americana de Vapores SA (“CSAV”)  EWCA Civ 1103 (“Volcafe”), the issue of what approach the English Courts should make to a defence of inherent vice will be decided shortly by the Supreme Court of England and Wales. As well as clarifying fundemental legal principles applying in cargo claims they will, in particular look at the burden of proof required to discharge the carriers' obligations under Articles IV.2 and III.2 of the Hague Rules. The court will decide precisely what must be proven to establish the defence of inherent vice and, in effect, have to choose between the current leading authority (the "Barcore") which suggests that the defence is only available when the cargo is not capable of withstanding the contractual voyage ie the voyage under the conditions of care which the carrier was contractually obliged to provide. This has long been the classic definition, i.e. if the carrier can show on balance, the cargo deteriorated in conditions by its own inability to bear the ordinary transit in a ship, then it could shift the burden of proof back to the Claimant.
However, in Volcafe the Court of Appeal held that in order to discharge the burden of proving that inherent vice defence applies, the carrier is only required to prove that the moisture which caused the damage originated within the goods in order to bring itself within the defence. This is illustrated in their Judgment which states:
"The damage to the cargoes was due to condensation and that the source of the condensation was the coffee beans themselves…." 
This, of course, is a different position to the cargo not being able to withstand the contractual voyage and both hull and cargo underwriters will await the Supreme Court Judgment with considerable interest.
Partner, Ashfords LLP
Search ADVOC News