On March 10, 2021, the Court of Appeal of England and Wales found in the Begun v Maran case that the claim for damages brought by the widow of a shipbreaking worker killed while working on an oil tanker in a shipyard in Bangladesh against shipping company Maran was not bound to fail as Maran UK may had owed a duty of care to the deceased worker. Considering that most oil tankers are broken up in Bangladesh, this may have important consequences across the shipping industry.
The ship’s sale
In 2017, the oil tanker owned and operated by entities within the Angelicoussis Shipping Group was sold for demolition by Maran UK, one of its subsidiaries. In accordance with standard practice, the sell was not directly to the shipbreakers but to a demolition cash buyer. The ship was sold “as is” in Singapore with only a small amount of fuel oil left in its tanks to Hsejar Martime Inc for a price over $16 million (§6-9).
The claimant argued that the high price and the small amount of oil left meant that Maran UK would have known that the ship would be broken up in Bangladesh (§10). This is of particular importance, considering the well-known fact that in Bangladesh vessels are demolished by workers in hazardous conditions (§12). Therefore, the claimant asserted that Maran UK, because it had autonomous control of the sale and knew that as a result of the sale the ship would be broken up in Bangladesh in highly dangerous conditions, had a duty of care (§14).
The existence of a duty of care
The usual rule is that there is no liability in tort for the harm caused by the intervention of third parties, i.e., A will not be liable for harm done to C caused by a third party B. However, the exception arises where A is responsible for or has created the danger which B has then exploited and that has caused harm to C (§51).
According to the claimant, Maran UK falls under this exception. The plaintiff argued that the defendant made things worse, i.e., creating the danger by deciding that the ship was to be broken in Bangladesh where the working conditions are notoriously unsafe (§62). While acknowledging the obstacles the claimant will face at trial, the Court nevertheless considered that “this way of putting the claim is arguable, and not fanciful” (§63).
Further, when asked by the defendant how it could or should have done to avoid the risks to the deceased, the Court referred to the answer provided by the claimant’s expert evidence, “namely, that the Appellant could, and should, have insisted on the sale to a so-called ‘green’ yard, where proper working practices were in place” (§67). The Court added this could have been achieved by the use of provisions within the contract of sale as it was well within the reasonable control of Maran UK (§68).
Importantly, the Court noted that all parties involved in the sale of the ship knew that the clause contained in the contract imposing an obligation on the buyer to confirm that it would only sell to a yard that would perform the demolition “in accordance with good health and safety working practices” would be entirely ignored. “That appears to be part of the unhappy reality of the shipbreaking business: everyone turns a blind eye to what they know will actually happen. A seller in the position of the Appellant would have no interest in ensuring the performance of clause 22 as it stands, and a buyer in the position of Hsejar could therefore be in breach of that provision without any sanction. Even if it was in breach of clause 22, it would argue that the seller had suffered no loss as a result. However, if the payment arrangements had been different, then both buyer and seller would have had a very real interest in ensuring that provisions like clause 22 were more than words on a piece of paper” (§69).
Finally, acknowledging that claims based on a duty of care, in circumstances where the damage has been caused by a third party, are currently at the forefront of the development of the law of negligence, the Court found that it would be inappropriate to strike out the claim based on the alleged duty of care on assumptions, in the absence of any findings of fact (§71). Therefore, proceedings can continue.
Potential consequences
This ruling may have important consequences for shipping companies as it acknowledges that liability may not automatically cease when the ship is sold to an intermediary for demolition. Sellers may have to ensure that demolition occurs in safe working conditions.
To be continued.