Dr Fawzi A Ismail, the claimant charterer, chartered the Ciechocinek to carry potatoes from Egypt to England. The vessel had a carrying capacity of 1,400 tons. However, the master and chief officer of the vessel believed that only 1,000 tons of potatoes, ventilated by 20 m³ of dunnage, should be loaded. On the day of loading in Alexandria, Dr Ismail was not present, but had authorised his brother, Mr Ismail, to give instructions on his behalf. Despite the advice of the master and chief officer, Mr Ismail insisted on loading 1,400 tons of potatoes. He also claimed that no dunnage was necessary, as the potatoes were packed in a new kind of bag that rendered dunnage unnecessary. The master was skeptical, but Mr Ismail promised to provide a surveyor's certificate stating that dunnage was unnecessary and a guarantee against any consequences of stowing the cargo in this manner. When discharging the cargo, it was discovered that many of the potatoes were rotten. As a result, Dr Ismail claimed damages amounting to GBP 63,000. The arbitrators held that the carrier was liable for improper stowage and awarded Dr Ismail two-thirds of the damage. In the High Court, Kerr J affirmed the award. The carrier appealed to the Court of Appeal.

Held: Appeal allowed.

The charterparty incorporated the following provisions of the Hague Rules: art 3.2, which states that '[s]ubject to the provisions of article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried'; and art 4 which states '[n]either the carrier nor the ship shall be responsible for loss or damage arising or resulting from … (i) Act or omission of the shipper or owner of the goods, his agent or representative'.

Additionally, cl 49 of the charterparty stipulated that '[d]unnaging and stowage instructions given by the charterers to be carefully followed, but to be executed under the supervision of the master and he is to remain responsible for proper stowage and dunnaging'.

Article 3 of the Hague Rules did not apply to the case. The Court referred to Pyrene Co Ltd v Scindia Navigation Co Ltd [1954] 2 QB 402 (CMI2100), which stated that art 3 does not require the shipowner to personally carry out all the loading and stowing. It simply means that whatever loading or stowing the shipowner is obligated to do under the contract, must be done properly and carefully.

Clause 49 did not apply to the case. The Court interpreted cl 49 as follows: the first part imposed on the charterer the obligation to load and stow the cargo at its expense, and allowed it to provide dunnage and stowage instructions to the master. The second part meant that the master had the overriding power to supervise the stowage. The master was responsible for the stowage of the cargo to ensure the safety of the ship and its ability to withstand the normal incidents of the voyage. However, the master could assume that the goods were fit to withstand the normal incidents of the voyage, unless they were improperly packed or ventilated. If the goods were not in a suitable condition to withstand the voyage, the master would be excused from responsibility for any damages. Mr Ismail had taken responsibility on himself by assuring the master that the potatoes were packed in appropriate bags that did not require dunnage and that 1,400 tons could be loaded.

Alternatively, the master and the ship could rely on art 4.2.i of the Hague Rules, because the damage resulted from Mr Ismail's act or omission as a representative of the cargo owner.