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Law and Sea.
Freight and Cargo Contamination

Arrival of the goods is a condition precedent to the shipowners’ right to freight. This rule, however, has one qualification. Freight will not be payable if on delivery of the goods they appear to be damaged and this damage is so severe as to transform the goods into a different type of goods altogether. In such case there is, in effect, a total loss of the cargo, and, therefore, no freight is payable.
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Inert Gas, Contamination of Cargo
Last updated: 06-Oct-2014

The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd v FR8 Singaporte Pte Ltd [2008] EWHC 2480 (Comm) per Steel J at paras 24-25:

24. In The Iron Gippsland [1994] 1 Lloyd’s Rep. 335 it was held by Carruthers J in the Supreme Court of New South Wales in a contamination claim of like kind to the present that the defence under Article IV r. 2(a) of the Hague-Visby Rules was not available:

It is true that inert gas systems were installed on tankers fundamentally for the protection of the vessel. However, the purpose of the inert gas system is primarily to manage the cargo, not only for the protection of the cargo but for the ultimate protection of the vessel from adverse consequences associated with that cargo. Thus, essentially the inert gas system is concerned with the management of the cargo and, in my view, damage occasioned to cargo by mismanagement of the inert gas system cannot be categorized as neglect or fault in the management of the ship. Consistently with the principles enunciated in The Tenos, I must hold that the subject damage was not occasioned by an act of neglect or default in the management of the ship but rather in the management of the cargo.

25. Whether or not it is appropriate to start from the proposition that ‘the purpose of the inert gas system was primarily to manage the cargo’, I have no doubt that failure to operate (or maintain) properly those parts of the IGS available for the purpose of avoiding contamination of cargo ‘cannot be categorised as neglect or default in the management of the ship.’


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