Folio 1997 No 1765
BAILII Citation Number: [2001] EWHC 536 (Comm)
IN THE HIGH COURT OF JUSTICE

QUEEN’S BENCH DIVISION

COMMERCIAL COURT
Date: 16 May 2001
Before:

The Hon. Mr. Justice Aikens

B E T W E E N:
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Seashore Marine SA
Claimant

-and-

(1) The Phoenix Assurance Plc
(2) The Indemnity Marine Assurance Company Limited
(3) The Commercial Union Assurance Company Plc
(4) The Tokio Marine & Fire Insurance Company (UK) Limited
(5) Sphere Drake Insurance Plc
(On its own behalf and on behalf of all Underwriters
set out in Schedule 1 attached to the Writ)
(6) Navigators Insurance Company
(On its own behalf and on behalf of all Underwriters
set out in Schedule 2 attached to the Writ)
(7) Unione Mediterranea Di Sicurta Spa
(On its own behalf and on behalf of all Underwriters
Set out in Schedule 3 attached to the Writ)
(8) Allianz Via Assurances Nord Et Le Monde Iard
(On its own behalf and on behalf of all Underwriters
set out in Schedule 4 attached to the Writ)
Defendants
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Stephen Hofmeyr QC and Stephen Kenny instructed by Hill Taylor Dickinson appeared on behalf of the Claimant

Michael Thomas QC and David Foxton instructed by Ince & Co appeared on behalf of the Defendants.

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Judgment

Mr Justice Aikens:

A.	Synopsis of the Case

1.	The Claimant is the former owning company of the Ro – Ro/Container vessel “VERGINA” (“the vessel”).  She was managed by Good Faith Shipping Company SA.  The claim is brought against the insurers and underwriters under four policies of marine insurance on the hull and machinery of the vessel for the period 11 June 1993 to 12 May 1994.  The policies were all subject to the terms of the Institute Time Clauses (Hulls) dated 1.10.83 (“ITC”).

2.	The claim is for damages for failing to hold the Claimant harmless for its liability to pay salvage as a result of an incident on 19 February 1994 off the coast of West Africa.  The vessel was on a voyage from Abidjan to Europe laden with a cargo of containers.  She developed a list to starboard of 23° and the crew abandoned ship.  The crew were picked up by the “MT Seaford”, who stood by for some time.  The vessel was then salved by the “Happiness II”, on which a “salvage team”, organised by the managers of that vessel, had been placed.  On 13 February 1994 “Happiness II” was joined by the professional salvage tug “Leopard”, operated by the salvage contractors Alexander G Tsavliris & Sons (“Tsavliris”).  Salvage contracts on Lloyd’s Open Form 1990 (“LOF 1990”) were concluded with each of these three salvors. 

3.	The salvage operations continued until 17 February 1994.  The vessel then continued her voyage to Lisbon with five of the salvage team on board.  The vessel hove to off Las Palmas on 20 February 1994 for preliminary surveys to be performed.  The vessel arrived at Lisbon on 23 February 1994, where further surveys were carried out and the crew was interviewed. 

4.	The Claimant now claims from each of the Defendants its proportion of the salvage liabilities that the Claimant has had to pay.  The salvage claim of the “Seaford” was settled by the Claimant for $34,000 plus costs.  That of the “Happiness II” was also eventually settled (in respect of the Claimant’s liability) for £185,908.62 plus costs.  The claim of Tsavliris went to arbitration and then to the Lloyd’s Appeal Arbitrator.  He awarded Tsavliris £446,027.51, inclusive of interest up to 20 October 1996; interest at a daily rate of £106.92 thereafter and costs. 

5.	The claim is made under Clauses 11.1 and 11.4 of the ITC.  The Claimant contends that the salvage liabilities were incurred in connection with the avoidance of a loss of the vessel by insured perils.  The Claimant says that if the vessel had not been salved then she would have been lost by either “perils of the seas” or negligence of “Master Officers [or] Crew…”.

6.	The Claimant’s case is that the list developed as a result of the negligence of the Chief Engineer in operating the vessel’s ballast system during the evening of 10 February 1994.  Alternatively it is said that the Master was negligent in permitting the Chief Engineer to operate the ballast system without the supervision of the Chief Officer or in not stopping the Chief Engineer when it became clear that his operation of the ballast system was causing the list to increase.   The Claimant contends that once the list of the vessel had increased to over 10° water entered No 3 to hold through one or more open or defective scupper valves. Therefore, the Claimant submits, the result of that ingress would have been that the vessel would have been proximately lost by “perils of the seas” or crew negligence, but for the salvage operations. 

7.	The Defendants contend that the salvage agreements were entered into to avert a loss which would not have been proximately caused by an insured peril.  The Defendants accept that if there had been no salvage operations then the vessel would eventually have capsized. But the Defendants deny that the crew operated the vessel’s ballast system negligently.  They also deny that this was the proximate cause of the list or that it would have been a proximate cause of the loss that would have occurred if there had been no salvage operations.  Further, they deny that the vessel would have been lost (proximately) by “perils of the seas”.  Therefore, they submit, as there would have been no loss by an insured peril, but for the salvage operations, the Claimant cannot recover under Clause II of the ITC.

8.	The Defendants do not advance any positive case as to the cause of the list or what would have been the cause of the loss of the vessel had there been no salvage operations. The Defendants raised some subsidiary points on quantum, although most of these had been resolved by the end of the trial.

9.	The trial took place between 5 and 12 February 2001.  The Claimant called two witnesses of fact, the Chief Officer, Mr Angelides and the leader of the “salvage team” placed on board the “Happiness II”, Captain John Filipis.  The Claimant also relied upon signed witness statements from various other factual witnesses.  The Defendants called no factual witnesses. The Claimant called two experts.  The first was Mr Joshua Levy, a naval architect and marine engineer.  The second was Captain Bliault, a Master Mariner.  The Defendants called Mr Ken Abel, the well-known marine engineer and consultant.

B.	The Background Facts
10.	The Vessel:	The “Vergina” was a combined container/ro – ro vessel of 26,409 GRT.  She had been built in France in 1977 and then “jumboised” in Korea in 1986.  That process involved the addition of a new midships section some 40 metres long.  The new section consisted of 48 new frames, which were inserted at frame 98.  The new mid-section included Holds Nos 3 and 4 and the tanks between them and either side of them.  These are described below.

11.	In her lengthened state, the vessel was 204 metres in length and 26.5 metres in beam.  She had five cargo holds forward of the bridge.  The most forward hold, No 1, was divided into three compartments; one above deck C (an “upper ‘tweendeck”); one between C and B (a “lower ‘tweendeck”); and the third, a hold, between decks B and A.  Abaft of No 1 hold, the vessel had three decks. The uppermost was open to the weather, but was fitted with steel plate bulwarks to port and starboard.  That was called deck C.  Containers were carried on it. The next deck, which was the main and watertight deck, was called deck B.  It was extended from the superstructure (aft) to the bulkhead at the after end of the No 1 hold.  This deck was also known as the “Ro – Ro deck” and was without any bulkheads dividing the space into separate compartments. There was access to the main deck for Ro – Ro cargo via a stern ramp and door on the starboard quarter.  Below the main deck were holds 2, 3, 4 and 5, which were separated from one another by transverse tanks.  Each of the holds 2, 3, 4 and 5 were fitted with non-watertight ‘tween decks (deck A).

12.	Hatchways at the upper deck, main deck and ‘tween deck of No 1 hold were each provided with hydraulically operated folding steel covers.  The main deck and ‘tween deck openings to Holds Nos 2, 3, 4 and 5 were also provided with hydraulically operated folding steel covers. These covers fitted into coaming recesses so that when the covers were closed the top plating of the covers fitted flush with the main deck plating. Thus any water that flowed onto the main deck would flow into and collect in the coaming recesses. In order to allow that water to flow overboard, the coaming recesses were provided with an arrangement of drain pipes which led to manifolds at each side of the after end of each of Holds Nos 2, 3, 4 and 5, situated in the upper side tanks and I describe below.  Outboard of each manifold there was a single overboard discharge pipeline leading to the side shell plating openings.  In each discharge there was a screw-down non-return valve.  Those valves were operated by hand wheels at upper deck level with extended spindles from the upper deck hand wheels down to the valves themselves.  The discharge outlets of these scupper valves were themselves about 1.5 metres below main deck level or 1 to 1.5 metres above the waterline.
 
13.	The upper deck hatchways providing access to Holds Nos 2, 3, 4 and 5 were each provided with portable steel pontoons. 

14.	Tanks and Double bottoms:		The vessel was double-hulled below the upper deck and from the aft bulkhead of No 1 hold to the forward engine room bulkhead, which abutted Hold No 5.  This meant that there were tanks either side of Holds Nos 2, 3, 4 and 5.  They were divided horizontally in way of decks A and B.  Above deck B (the main deck) the compartments were dry void spaces. Between deck B and deck A (the ‘tween deck in those holds) the tanks were called the “upper side tanks”.  Below deck B to the double bottom the tanks were called the “lower side tanks”.  The double bottom (“DB”) tanks contained the hold bilge wells and the vessel had a duct keel with manhole access from holds No 2 and 5 and a door in the Engine Room.

15.	Between Holds Nos 2 and 3, 3 and 4 and 4 and 5 there were a number of tanks.  Between deck B (main deck) and the ‘tween deck level there were the so-called “stabiliser tanks”.  The stabiliser tanks between (respectively) Holds 2 and 3 and Holds 4 and 5 extended as far as the ship’s side.  The stabiliser tanks between Holds 3 and 4 only extended to the inner skin.  The stabiliser tanks did not have any internal divisions or baffles. All the stabiliser tanks were intended to be fresh water ballast tanks.  However, as the vessel habitually carried containers on deck, the stabiliser tanks, which had a relatively high centre of gravity, were kept empty. But the DB tanks and the lower wing tanks were habitually filled with fresh water ballast in order to increase the ship’s stability.

16.	The water ballast tanks either side of Holds Nos 2 to 5 and the transverse stabiliser tanks were each fitted with air pipes that rose to vinel type vent heads, which were sited above deck B (the main deck) within the void spaces that were on each side of those holds.  The vinel vent heads were fitted with outlet pipes leading horizontally outwards to the shell plating.  There the openings were at about 0.5 metres above main deck level, or 3 to 3.5 metres above the waterline.  It was agreed that if the vessel took on a list of about 13.5° (with the draft she had on sailing from Abidjan) then the vinel vent outlet pipes would become submerged.  It was the Claimant’s case that in those circumstances water would have been able to enter any empty spaces served by the associated ventilation pipe.

17.	The vessel also had other tanks which are important in this case.  Beneath Hold No 1 was a Fuel Oil (“F.O.”) tank, called tank 51.  There were also three F.O. tanks (numbered 9 and 10) beneath the stabiliser tank between Holds 4 and 5.  F.O. tank 9 was in the centre and there were two tanks No 10 either side of No 9.  Daily movements of F.O. would be made from tank 51 to tank 19, which was situated on the starboard side of the Engine Room, immediately aft of the bulkhead with No 5 hold, at ‘tween deck level.  There was a similar tank (No 18) on the port side at the same position.  At the same position as tank 19, but at DB level was the Diesel Oil (“D.O.”) overflow tank.  In the Engine Room on the port side abaft tank No 18 were the D.O. storage and settling tanks. 

18.	When the vessel was enlarged the new tanks were each given a number with the prefix “N”.  However the ship’s crew used an alternative numbering system which identified the tanks by reference to the nearest hold of the ship.  That numbering system was adopted in most of the factual and expert evidence at the trial and I shall use it in this judgment.  Appended to this judgment is a diagram showing the tank layout of the vessel. 

19.	The Ballast Pumping System:	The ballast pump and its controls were situated in the engine room.  The suction valve and the delivery valve either side of the ballast pump were also operated locally in the engine room.  The sea suction valve and the overboard discharge valves were situated in the engine room and could be operated there or from the ballast control console in the ballast control room.  That room was situated in the accommodation aft. 

20.	The entry and exit of water ballast to tanks was controlled by pneumatic valves and actuators, situated in the duct keel.  They operated on a compressed air supply from the engine room.  At the after end of the ballast system pipework (in the engine room) there were ballast suction valves and ballast delivery valves, port and starboard.  All of these valves could be operated by activating electrical switches on the ballast control console in the ballast control room, which controlled the pneumatic valve operating system. 

21.	The ballast control console had been installed when the vessel was originally built.  When the vessel was extended in 1986 a further section of console was added to the existing console to deal with the ballast tanks in the new mid-section of the vessel, ie. those either side of Hold Nos 3 (including between Holds Nos 3 and 4).  Each of the two consoles had the same type of electrical switches. Both the switches for operating the crossover valves (port and starboard, suction and discharge) and the individual tank valves had to be turned through 90° to operate them.  But for the crossover valve switches, the operator also had to depress the switches when turning them.  Whilst the valve was being moved from either the open or closed position a light would burn, to indicate that the switch and the valve were not in the same position.  But the light would go out as soon as the valve was fully in either the open or closed position.  The light did not remain on once the valve was in the open or closed position.

22.	Steps required to deballast/ballast a tank:		First the ballast pump (in the engine room) had to be started.  Secondly the ballast pump suction valve had to be activated in the engine room.  Thirdly, the port and starboard ballast discharge valves had to be operated from the ballast control room.  Fourthly the valve pressure side of the ballast pump in the engine room had to be opened.  Fifthly the overboard valve must be opened; either manually or by remote control in the engine room.  Lastly, the tank valve to the tank from which ballast was to be discharged must be opened.  That was done by turning the appropriate knob on the ballast control console as I have described above.

23.	The suction line in the mid stabiliser tank, between Holds 3 and 4, was situated on the port side of the tank.  This created problems when the vessel developed a list to starboard and the crew attempted to discharge water that was in the mid stabiliser tank.

24.	A similar process was used to ballast a tank, substituting the appropriate valves and movements.

25.	Operation of the vessel up to leaving Abidjan on 7 February 1994.	The Claimant had bought the vessel in 1993.  She was sent to be refitted and repaired at Piraeus in the autumn of 1993.  She was then chartered for voyages between Europe and South Africa via West Africa. 

26.	During the first day of the trial an issue arose as to whether the Claimant could and should rely on evidence about work done on the vessel’s ballast system at Piraeus.  The Claimant wishes to do so in order to counter a suggestion by the Defendant that a possible cause of the vessel’s list was that valves or other parts in the ballast system were defective.  I was asked to rule on what the Claimant had to plead and prove and what limits there were on the case that the Defendants could put forward in the light of their limited pleadings.  I ruled that as the Defendants had not pleaded any positive case, the Claimant did not have to plead or prove a negative; ie. that there was no defect in the ballast system.  I also ruled that documents relating to the state of the ballast system before the round voyage started from Europe could only be used to a very limited extent by either side.  The furthest that the Defendants could use the documents was to suggest that there might be a defect in the ballast system, in an attempt to undermine the Claimant’s positive case. The furthest that the Claimant could use the documents was to rebut that suggestion.

27.	The vessel left Piraeus on 24 December 1993 and proceeded to La Spezia as her first loadport.  When the vessel left Piraeus her stabiliser tanks were full but they were pumped out before the vessel got to La Spezia and were reported to be dry.  After La Spezia the vessel sailed to Barcelona to load more cargo.  Captain Filipis accompanied the vessel as far as Barcelona.  On leaving Barcelona on 31 December 1993, the vessel sailed for Abidjan, arriving there on 9 January 1994.  The vessel then sailed to various South African ports and returned to Abidjan on 5 February 1994.  Loading of cargo there was completed by 0445 hours on 7 February 1994.  Upon completion of loading the vessel had a trim of 0.41 metres by the head and a GM of 0.34 metres.

28.	The pilot came on board at about 0600 hours on 7 February 1994 and demanded that the bow trim of the vessel be removed for the passage down the canal from Abidjan to the open sea.  To achieve this 200 tons of water ballast was pumped out of the No 2 double bottom tanks port and starboard.  The pilot returned at 1800 hours. 

29.	It is agreed that upon departure of the vessel from Abidjan, she had adequate stability.  But from that point on the facts are contentious and I will deal with them further below.

C.	The ITC Terms relied on and the burden of proof argument
30.	The relevant ITC terms in the policies that the Claimant relies on are as follows:
“6.	PERILS
6.1	This insurance covers the loss of or damage to the subject – matter insured caused by
6.1.1	perils of the seas……
……
6.2	This insurance covers loss of or damage to the subject – matter insured caused by
6.2.3	negligence of Master Officers Crew or Pilots
……
provided that such loss or damage has not resulted from want of due diligence by the Assured, Owners or Managers”

“11.	GENERAL AVERAGE AND SALVAGE

11.1	This insurance covers the Vessel’s proportion of salvage, salvage charges and/or general average……

……

11.4	No claim under this Clause 11 shall in any case be allowed where the loss was not incurred to avoid or in connection with the avoidance of a peril insured against”.

31.	It was agreed that the word “salvage” in Clause 11.1 includes contractual remuneration that is recoverable by a salvor under an LOF 1990 salvage agreement.  It was also agreed that the words “the loss” in Clause 11.4 must mean the liability of the insured for the types of payments that are identified in Clause 11.1.

32.	However there was an issue between the parties on the proper construction of Clauses 11.1 and 11.4 of the ITC.  Mr Hofmeyr QC, for the Claimant, contended that once the assured had proved that the insured vessel had incurred salvage, then the assured was, in the first instance, entitled to recover the sum paid.  It was then up to the insurers to prove that “the loss” was “not incurred to avoid or in connection with the avoidance of a peril insured against”.    Mr Hofmeyr contended that as the Defendant insurers had not advanced any positive cases that the salvage liabilities claimed in this case were “not incurred to avoid or in connection with the avoidance of a peril insured against”, then once the salvage liabilities had been proved, the Claimant must succeed in this action.

32.	I cannot accept this argument.  In my view Clause 11.4 is an integral part of the definition of the cover granted by Clause 11.  There is no express wording to suggest that Clause 11.4 is intended to be an exception to the general cover given in Clause 11.1.  There is no reason why it should be implied that Clause 11.4 was to be an exception, which underwriters would have to prove.  On the contrary, the general rule of insurance is that the insured must prove a proximate link between the loss that the insured has incurred and at least one of the perils that are covered under the insurance policy.  Here the “perils” include loss or damage to the vessel by perils of the seas and loss or damage to the vessel by negligence of the Master Officers and Crew of the vessel.  Clause 11 enlarges the cover provided by the policy so as to entitle the insured to an indemnity for certain types of payments made to avoid a loss or damage to the subject matter insured.  But, in my view and in accordance with general principle, Clause 11 requires that the insured proves that the “loss” for which an indemnity is sought was proximately linked to the avoidance of one of the “perils” covered by the policy wording in Clause 6.

34.	Accordingly, in my view a Claimant assured has to prove the following in order to recover under Clause 11.1 and 11.4 of the ITC wording: (i) payment or the liability to pay salvage, salvage charges or general average; and (ii) that such liability or payment was incurred to avoid loss or damage to the vessel by one of the matters set out in the sub-clauses of Clause 6.1 and 6.2 of the ITC; or (iii) that such liability or payment was incurred “in connection with” the avoidance of loss or damage to the vessel by one of the matters set out in those sub-clauses. 

35.	In the present case there is no dispute (save in minor respects) that the Claimant assured was liable to make the salvage payments.  Therefore it is up to the claimant to prove, on a balance of probabilities, that: (i) the liability to the salvage was incurred to avoid or in connection with the avoidance of the loss of the “Vergina”; (ii) the loss of the vessel, if it had occurred, would have been proximately caused by one or both of the two particular insured perils relied on by the Claimant, ie. “perils of the seas” or “negligence of the Master or [Chief Engineering] Officer”.

D.	The parties’ case on the facts and the Issues to be decided

36.	The Claimant’s pleaded case:	The Claimant pleaded that (i) the vessel’s ballast system was operated negligently by the crew and developed a starboard list of 23°; (ii) later, after water was discovered in the stabiliser transverse tanks, the crew abandoned ship (iii) the salvage agreements to provide the salvage services (referred to above) were concluded “for the purpose of averting a loss which would have been recoverable under the contract of insurance, namely the loss of or damage to the vessel caused by perils of the seas and/or negligence of the officers and/or crew of the vessel”.

37.	The Defendants sought Further and Better Particulars of the allegation that the ballast system had been operated negligently by the crew, so causing the list to starboard.  The answer given was that the vessel left Abidjan with plenty of stability; the Chief Engineer became concerned about the stability of the ship; he did not have sufficient knowledge to operate the ballast system but did so negligently “in a way to cause an imbalance of ballast water between the port and starboard side ballast tanks”.  The Claimant pleaded that this was done between 1700 hours on 10 February and 0030 hours on 11 February 1994.  The claimant asked the Court to infer that the Chief Engineer wholly deballasted No 3 DB tank, port; partly deballasted No 4 DB tank port and introduced water into the centre stabiliser tank.  No further particulars were given of what exactly the Chief Engineer did with the ballast system to remove or add ballast water as alleged. 

38.	At the trial this case was expanded and modified.  The Claimant’s case, as finally advance, was: (i) the vessel was stable but with a 1° starboard list up to the afternoon of 10 February 1994; (ii) the list increased initially because of a F.O. transfer to the settling tank or by the Chief Engineer deliberately or inadvertently pumping ballast into No 2 or 3 starboard upper wing tank; (iii) the Chief Engineer deliberately or inadvertently pumped water into the centre stabiliser tank and out of the No 3 DB tank port; (iv) he may also have pumped some water out of No 4 DB tank port and into No 2 and 3 starboard upper wing tanks; (v) the actions of the Chief Engineer were negligent and they resulted in an increase of the starboard list to more than 10.5°; (vi) once the vessel reached that degree of starboard list then water got into the No 3 hold via an open scupper valve which was either faulty or stuck in the open position; (vii) once the ship’s list increased beyond 13.6° further water entered the Nos 2 and 3 starboard upper wing tanks through submerged air vent pipe vinel valves;(viii) the starboard list then increased to 23.5°, which was the state of the vessel when the salvors began their work; (ix) if the salvors had not been engaged the vessel would have capsized in just over 4 days’ time; (x) the salvage liability was incurred to avoid a loss that would have been proximately caused by the negligence of the Chief Engineer in operating the ballast system, alternatively by the negligence of the Master in allowing the Chief Engineer to operate the system or continue to do so, when the latter lacked the necessary experience; (xi) alternatively the salvage liability was incurred to avoid a loss that would have been proximately caused by the fortuitous incursion of seawater into the vessel via the defective scupper valve; (xii) in the further alternative the salvage liability was incurred to avoid a loss that would have been proximately caused by both the list (whatever caused that) and the entry of seawater through the defective scupper valves.  The Claimant relied upon the principle that there can be two proximate causes of a loss and that it is sufficient that one proximate cause is an insured peril under the policy terms: The Miss Jay Jay.

39.	The Defendants’ case: 	The Defendants submit that: (i) the Claimant must show (on a balance of probabilities) that if the salvage agreements had not been concluded and the salvage not performed then the vessel would have been lost (or damaged) by one or more insured perils identified in the ITC Clause 6; (ii) the only proximate cause of the loss (had it occurred) would have been the list of the vessel; (iii) the Claimant cannot adduce direct evidence to show that the list was caused by the negligent acts of the Chief Engineer in operating the ballast system; (iv) nor can the Court infer, on a balance of probabilities, that the cause of the list was the negligent actions by the Chief Engineer; (v) if the only proximate cause of the loss of the vessel (had it occurred) would have been the list, then as the Claimant cannot prove that the list was caused by the negligent acts of the Chief Engineer, so it cannot prove the precondition of recovering under Clause 11.1 and 11.4 of the ITC; (vi) therefore the claim must fail. 

40.	The Defendants accepted that the vessel was stable on leaving Abidjan.  They also accepted that if the salvage services had not been rendered, then the vessel would have capsized in about 4 days.  Therefore, at least by inference, they accepted that the salvage liabilities were incurred by the Claimant to avoid, or in connection with the avoidance of the loss of the vessel.  Thus the main issue at the trial was whether the vessel would have been lost as a result of one of the insured perils relied on: ie. negligence of the crew or perils of the seas. Because the Defendants did not plead any positive case on the cause of the list or what would have been the cause of the loss of the vessel, they could only attack the Claimant’s case in an attempt to weaken or demolish it.  This attack was mounted at almost every point.  Occasionally when making his final submissions, Mr Thomas QC for the Defendants appeared to be advancing a positive case that the cause of the vessel’s list was the defective condition of the vessel’s ballast system and the valves in particular.  However he accepted that, ultimately, he could only suggest that and other “possibilities” for the list as a means of undermining the Claimant’s own case: ie. crew negligence.

41.	The Issues on the Facts:	In the light of the above, I think that the following issues of fact have to be resolved in order to decide whether the Claimant has proved its case and so can succeed in principle on its claim under Clause 11.1 and 11.4 of the ITC.  I emphasise once again that, in the absence of a positive case from the Defendants, the principal issue is whether the Claimant has proved its case:

(1)	Is it proved that the vessel did not have any stability problems between leaving Abidjan and 10 February 1994?
(2)	When and how did the vessel’s list increase during 10 February 1994 and to about 2030 hours?
(3)	What conclusions can be drawn (if any) about the timing and the cause of the increase in the vessel’s list after about 2030 hours on 10 February 1994?
(4)	What would have been the cause of the vessel capsizing, but for the salvage operations?

E.	Findings on the Cause of the List

42.	Assessment of the Evidence generally:	Only two witnesses of fact gave oral evidence and both were called by the Claimant.  The Defendants submitted that the Chief Officer, Mr Anagyros Angelides, was not frank and honest, but was disingenuous and, in parts of his evidence, untruthful.  I found that he was generally trying to assist the Court, but he found it very difficult to recall events of seven years previously. This inability lead to defensiveness and evasiveness on occasions.  As far as Captain Filipis was concerned, he too was trying to assist the Court, but also found it difficult to remember the details of events so long ago.  He had very little independent recollection of events and had to rely on his statements and documents. 

43.	Mr Angelides gave a contemporaneous statement which was taken on 24 February and 3 March 1994.  Captain Filipis’ statement was taken on 28 September 1994.  My approach has been to see if those contemporaneous statements are demonstrated to be unreliable by cross examination of both men at the trial or statements of other witnesses or other documentary material. 

44.	In general there were no challenges to the accuracy of the contemporary documents.  However the Defendants did criticise the fact that some documents were missing or that there was no contemporaneous record of some actions by the crew.  Both sides criticised parts of the contemporaneous statements of various members of the crew as being either inaccurate or incomplete.  In a case which came to trial so long after the events I have often had to try to reconcile these inconsistent statements without any particular help from the oral evidence.  Again my approach has been to see how the oral evidence of Mr Angelides and Captain Filipis throws light on those statements, rather than taking their oral evidence as the chief source of the facts. 
Issue One:	Has the Claimant proved that the vessel did not have any stability problems between leaving Abidjan and 10 February 1994?

45.	The Claimant’s case is that there were no stability problems.  It is submitted by the Claimant that there is no evidence to lead to a conclusion that there were stability problems.  The Defendants tried to cast some doubt on this view, whilst being unable to assert a positive case.  The Defendants relied on a statement of Captain Artemios Dracoutos, the Master of the “Seaford” (made in the Salvage Arbitration proceedings) that Captain Dimitrious Vassiliou of the “Vergina” had told him that the vessel had a stability problem and had sailed from Abidjan with a 6° to 8° list to starboard.  This indirect evidence could not be tested as Captain Dracoutos was not called and Captain Vassiliou could not be called because he had died before the trial.  The Defendants also relied upon evidence of the replacement Chief Engineer Ntokouzis that there was an 8° list to port after dropping the pilot on leaving Abidjan and also evidence of the Radio Officer and the Cook concerning a list on leaving Abidjan. That evidence was untested.  In my view it probably refers to a list when the vessel altered course after dropping the pilot and before the forward DB tanks had been refilled.

46.	Against this there is overwhelming evidence that the vessel was stable, but had a small, ie. 1° to 2°, list during this period.  The Master’s own statement says that was the list.  That is confirmed by the Chief Officer’s statement, which he reiterated in oral evidence.  There is further confirmation from the contemporaneous statements of the second and third officers and second and third engineers. 

47.	The Defendants relied upon three further pieces of evidence.  First, the rough engine room log entries, which shoed that the ballast pump had been used during this period.  It was put to Mr Angelides that this indicated that tanks had to be pressed up or emptied during this period.  Mr Angelides did not record any use of the ballast pump in his contemporaneous statement.  In cross examination he said that was because he was not asked about it at the time.

48.	Secondly they rely on the Master’s evidence that the Chief Engineer stated to him on 9 February that he was concerned about the vessel’s stability.  Although the Master did not share these concerns, he ordered that the ballast valves should be opened up to allow gravitation filling of the lower tanks from the No 5 upper wing tanks to ensure the lower tanks were pressed up.  Then the upper tanks were topped up with sea water.  The Master’s evidence, which I accept, was that this had no appreciable effect on the vessel’s stability.

49.	The Defendants say that the fact that some topping up was needed indicates the possibility that there was a problem with the ballast system’s valves.  The third piece of evidence they rely upon is that of the Chief Officer that he was instructed by the Master to take two sets of ballast tank soundings on 9 February 1994.  Two sets of soundings are recorded in the Chief Officer’s Soundings Book. However, both sets of soundings show that the vessel was ballasted as she had been after the No 2 DB tanks had been refilled after navigating the canal leaving Abidjan. This indicates that there was no substantial problem with the ballast system valves. 

50.	It was suggested to the Chief Officer in cross examination that one of the set of soundings recorded for 9 February was undertaken in fact on 10 February.  Mr Angelides would not agree to that suggestion.  In their final submissions the Defendants appear to accept that two sets of soundings were conducted on 9 February. 

51.	I am satisfied that there were ballast transfers between 7 and 10 February 1994.  But there is no evidence to show that these transfers were from the No 3 DB tanks or from the centre stabiliser tank.  It is likely that they were routine transfers between the vessel’s heeling tanks, the upper wing tanks Nos 4 and 5, port and starboard. These were made necessary by the transfer of F.O. and other fluids. 

Issue Two:  When and how did the Vessel’s list increase during 10 February 1994 up to about 2030 hours?

52.	The Master’s evidence was that before 0830 hours on 10 February the Chief Officer and the Bosum inspected the holds and the three stabiliser tanks as usual. They reported routinely that everything was satisfactory.  I accept this and the fact that it must mean that the holds and the transverse stabiliser tanks were dry at that time.  That would confirm that there were no problems with stability caused by leakage through the ballast valve system.

53.	The Chief Engineer’s own statement, given on 24 February 1994, was that the vessel’s list was between 1° and 3° from the time of leaving Abidjan until before lunchtime on 10 February.  His contemporaneous statement does not say that he expressed concern about the vessel’s stability up until 10 February.

54.	The Chief Officer’s evidence was that the list began to increase from 2° to about 5° after the noon meal.  The Claimant’s principal case is that this increase was probably caused by a transfer of F.O. into the F.O. settling tank (No 19) in the engine room.  However, transfers were usually done twice a day and only about 20 tons at a time was usually transferred.  Such a transfer would not produce a list of 5°.  It would take a 40 ton transfer to do so.  But there was no direct evidence to suggest that such a large F.O. transfer had been made or why it should have been made.

55.	I would accept that a 20 ton transfer probably was made (from around 1300 hours) and that this would have increased the starboard list to about 3°.  That does not explain the further increased in list during the afternoon of 10 February reported by the crew. 

56.	The other explanation that is still advanced by the Claimant is that the Chief Engineer negligently pumped water into one or both of the starboard Nos 2 and 3 upper wing tanks.  In order to investigate that allegation it is necessary to consider the evidence on how the Chief Engineer became involved at all with the ballast system on 10 February 1994 and what he did.

57.	The Master’s evidence was that when he was on the bridge at about 1400 hours the Chief Engineer came to him and expressed anxiety about the ship’s stability.  The Chief Engineer requested that the DB tanks be pressed up, using the ballast pump, to ensure that they were full.  The Master’s evidence was that he did not wish to do this but the Chief Engineer was so insistent that he agreed to the plan.

58.	The Chief Engineer does not give the same version of events in his contemporaneous statement.  He says that it was the Master who approached him after lunch, told him that there was water in the stabiliser tank and requested the Chief Engineer to go to the ballast control room.  He says that at this time the list was 8 to 10° to starboard.

59.	There is no corroboration for the Chief Engineer’s reported statement of the Master that there was water in the stabiliser tank.  The Master could only have learned that fact from a sounding, but there is no record of such a sounding.  Nor is there any such statement from the Master.  Therefore I reject the Chief Engineer’s version of events and I accept that of the Master.  His version is also consistent with what happened next, at which time there was no immediate attempt to remove water from the stabiliser tank. 

60.	It is clear that the two men went to the ballast control room and the Chief Officer met them there.  The Chief Officer was told of the plans to press up all the ballast tanks and he was asked to check the soundings as that was being done.  The Chief Officer detailed other members of the crew to do this, under the direction of the Bosun.

61.	The Chief Engineer took charge of operations in the ballast control room.  It is unclear why this was permitted, given that ship’s stability is normally the preserve of the Chief Officer rather than the engineers. The evidence is that prior to the afternoon of 10 February, only the Chief Officer had operated the ballast system.  There is no evidence that the Chief Engineer had any previous experience in running the ballast system on board the vessel, but I accept that the actual operation of the system should have been within the grasp of anyone with engineering knowledge.  The Master’s evidence is that “for the sake of certainty” the Chief Officer showed the Chief Engineer the operations of the ballast system.  But the Chief Officer did not remain in the ballast control room whilst the pressing up operation was performed.

62.	The Chief Engineer began the exercise of pressing up the lower ballast tanks at some time during the late afternoon.  The precise time of this exercise is impossible to identify.  The result of the exercise was that each ballast tank was recorded as full.  But the Chief Engineer was not satisfied and wished to repeat the exercise, with the Chief Officer watching the tanks overflow as they were pressed up. 

63.	The Chief Engineer also wanted to check individually the tightness of the ballast system valves to each tank.  Quite how this could be done remains obscure.  In cross examination, Captain Bliault accepted that individual valves could not be tested in this way, because the valves to the tanks are all in one line.  Therefore any test using suction against closed valves would show that either all the valves were tight or that one of tem in the line was leaking.  It would not be possible by this method to identify which particular valve was leaking.

64.	It is the evidence of the Chief Officer that after the second pressing up exercise, at some time between 1700 hours and 2000 hours, he took another asset of soundings.  Those indicated that the DB tanks and lower side tanks were full.  He said that he also checked the stabiliser tank visually and it was dry.  He also stated that he checked the holds and they were dry.

65.	The Defendants challenged this evidence of taking soundings, saying that: (i) there is no contemporaneous record of it; (ii) the results attested to are inconsistent with the other evidence of an increasing list; and (iii) it is inconsistent with evidence that there was water in the stabiliser tank from midday on 10 February 1994.

66.	Point (i) is correct, but is not a strong argument.  There was a great deal going on in these last hours before the vessel was abandoned at 0030 hours on 11 February.  I am not surprised that there was no official record or that any unofficial record has been lost.  Point (ii) is correct, but the evidence of the precise amount of the list varies considerably, both as to its amount and its timing.  So the inconsistency is not surprising.  Point (iii) depends on the Chief Engineer’s evidence for the position at lunchtime.  I have rejected that evidence.  Mr Fraser Coombes, the reefer engineer, gave evidence in a statement that the Master had told him that between 1700 and 1730 hours the crew were filling the centre stabiliser tank.  But this is not reliable, being untested double hearsay.  It is contrary to the tested evidence of the Chief Officer and also that of the Chief Engineer himself, who says that the Master instructed him to pump water out of the centre stabiliser tank.

67.	I have concluded that the Chief Officer did perform the soundings and inspections at about 2000 hours and made the findings of which he gave evidence.  Captain Bliault states that if all the DB tanks and the lower side tanks were full by the time the Chief Officer did his second round of soundings, then the only way to account for the increase in the vessel’s list is that the Chief Engineer pumped water into either or both the No 2 and 3 starboard upper wing tanks during the pressing up/valve tightness exercise.  But Captain Bliault can only advance this as a possibility and in my view there is no evidence to turn that possibility into a probability.  I also note that the Chief Officer did not report that water had got into those tanks at any stage before the vessel was abandoned. 

68.	Furthermore, the Claimant asks the Court to find that when the salvors and crew returned to the vessel on 14 February 1994, the Nos 2 and 3 upper wing tanks were empty.  But if the Chief Engineer had filled them to some extent during the evening of 10 February, then that water would either have had to stay there or he would have had to empty them later in the evening of 10 February.  There is no evidence of the latter action.

69.	So I find that it is not proved that the Chief Engineer did put water into the Nos 2 and 3 upper wing tanks.  As I am not satisfied that the Claimant has proved either of the two suggested reasons for the increase in the list from 1 to 2° to 5 to 8°, the cause of the initial increase in the list to 5 or 8° therefore remains uncertain.

Issue Three:  what caused the increase in the list after 2030 hours on 10 February 1994?
70.	The Master’s evidence is that at about 2030 hours when he was on the bridge he noticed that the list was about 8° to starboard.  He says that shortly before this the Second Engineer had stated that he had been to the ballast control room and “corrected” the Chief Engineer’s operation of the ballast valves.  There is no elaboration of the nature of this “correction”.  The Second Engineer does not mention it in his statement as recorded by Mr Mallin of Hill Taylor Dickinson, solicitors for the Claimant.  The Master’s record of what he was told by the Second Engineer is not, by itself, sufficiently weighty evidence on which to base a finding that the Chief Engineer had negligently operated the ballast system in some way.

71.	Shortly after 2030 hours the Master sent the Chief Officer to investigate the list again.  At about 2100 hours the Chief Officer discovered that there was water in the centre stabiliser tank.  He said that the water did not extend across the tank to the port side.  Mr Thomas QC accepted that there would have been water in the centre stabiliser tank by that time.  He submitted that water would have been present in that tank at an earlier, but unspecified time.  However the evidence of the Chief Officer was that when he had made his visual examination earlier at about 2200 hours, he removed the manhole covers on each side of the tank and shone a torch into the tank.  His evidence was that the centre stabiliser tank was dry at that time.  Mr Thomas challenged this evidence, but the Chief Officer confirmed it.  I am satisfied that the centre stabiliser tank was dry at the time of the first visual inspection around 2000 hours on 10 February.

72.	The Claimant submits that the water observed at 2100 hours could only have got into the centre stabiliser tank through the ballast system.  That must be correct.  Mr Hofmeyr submits that this ingress could only have occurred as a result of the operation of the ballast control system by the Chief Engineer at some time after 2000 hours on 10 February because there was no other feasible means by which the water could get there.  Mr Abel (the Defendants’ expert) accepted that a competent person would not put water into the centre stabiliser tank intentionally as it would endanger the vessel.  He also accepted that, in the circumstances, to put water in that tank inadvertently would be negligent, for the same reason.

73.	The Defendants submit that the operation of the ballast system console was so simple that it is inconceivable that the Chief Engineer should have made a mistake so as to admit water to the centre stabiliser tank after 2000 hours.  I accept that this may be so when circumstances are normal and a person is acting rationally.  However by 2000 hours there was a worrying list to the vessel and the Chief Engineer had been so concerned about the list that he had insisted on taking over control from the Chief Officer and the Master.  His subsequent acts show how agitated he was, if not panic striken.

74.	I infer, on a balance of probabilities, that water was pumped into the centre stabiliser tank at some stage after 2000 hours as a result of the acts of the Chief Engineer in the ballast control room.  I make this inference on the basis of the following facts: (i) the Chief Engineer was the only person operating the ballast control system at the time; (ii) no one suggests that water had deliberately been put into the centre tank during the voyage until this time; (iii) the centre stabiliser tank was found to be dry at 2000 hours, so its ballast valves had remained tight up until that time; (iv) if the vessel had a list of about 8°, then the centre stabiliser tank could contain about 102.5 tonnes of unpumpable water on the starboard side.   That is consistent with the observation of the Chief Officer; (v) Captain Bliault’s calculation was that it would take about 5 minutes to adjust the valves and about 17 minutes to pump 100 tonnes of water into the centre stabiliser tank, therefore the pumping could have been done after 2000 hours and before the Chief Officer’s second inspection at 2100 hours; (vi) lastly, there is the makeweight evidence of the Master, reporting the Second Engineer, that he had “corrected” an action of the Chief Engineer in the operation of the ballast system.

75.	After the Chief Officer’s inspection at 2100 hours he immediately reported to the Master that there was water in the centre stabiliser tank.  The Master ordered the Chief Engineer to pump out the centre stabiliser tank. The Chief Engineer attempted to do this at first with the ballast pump.  The attempt to pump out may have been partially successful, but because of the list this could not be completed by the ballast suction, which was on the port side.  Therefore a portable submersible pump was placed in the stabiliser tank to pump it out.  However it seems that it took between one and two hours to rig this up.

76.	By 22000 hours the vessel’s list had increased to 12° to starboard.  It is the Claimant’s case that during the period 2100 to 2200 hours, the Chief Engineer pumped ballast water out of the No 3 DB port.  Again there is no direct evidence for this.  I am invited to infer this from the facts that: (i) all the DB tanks were found to be full when sounded by the Chief Officer at 2000 hours; (ii) the vessel’s list increased even when attempts were made to pump water out of the centre stabiliser tank; (iii) the Chief Engineer was the only person operating the ballast control console during the period 2000 hours to 2200 hours; (iv) during that time he was attempting to empty the centre stabiliser tank, whose controls are next to those for the No 3 DB port tank; (v) when soundings were made on 14 February by the salvors and the Chief Officer, the No 3 DB port was found empty.  

77.	The Defendants submit that it is even less likely that the Chief Engineer would compound his first mistake (filling the centre stabiliser tank) with the mistake of emptying the No 3 port DB tank.  They submit that this allegation is based only upon speculation.  And they point out that in order to pump water into the centre stabiliser tank and then pump it out of the No 3 DB port, it is necessary to reverse the ballast/deballasting valves for the pumping exercise.  They submitted that it was highly unlikely that this would be done in the time available.

78.	As to the four points listed above, I have already found that points (i) and (ii) were the case.  On point (iii), there is no evidence that any other officer operated the ballast control console after 2100 hours, whereas there is evidence that the Chief Engineer continued to stay in the ballast control room during this time and that he was the only person to operate the ballast valves.

79.	On point (iv) it is common ground that during the period 2100 to 2200 hours the Chief Engineer was attempting to do various things with the centre stabiliser tank.  It is unclear whether he was trying to deballast it or press it up.  The Master states that the Chief Engineer told him that he must pump ballast into the stabiliser tank to top it up and reduce free surface.  He said that this resulted in an argument between the two men.  The Chief Engineer does not refer to this matter in his statement.  Nor does the Chief Officer.  The general tenor of this evidence was that he believed that the Chief Engineer was trying to deballast the centre stabiliser tank during this period.

80.	On point (v) the Claimant submits that the evidence supports a conclusion that the No 3 DB port was found empty or largely empty by the Chief Officer and salvors on 14 February 1994.  The Defendants point out that there is no written record of any sounding on 14 February.  They also rely upon two telexes sent by the Master of the “Leopard” to Tsavliris in Greece, recording soundings in the ballast tanks.  The first telex (of 14 February) apparently reports on starboard side soundings, but the Defendants accepted that they must be port side soundings.  The telex states that the sounding pipes were absent for the Nos 3 and 4 DB tanks. The Defendants say that this, together with the difficulty of taking accurate soundings with the vessel then listing at 28°, suggests strongly that no soundings of No 3 DB tank were made that day.  The telex of 15 February appears to muddle port and starboard. 

81.	I have concluded that I should accept the evidence of the Chief Officer and Captain Filipis that the sounding of No 3 DB was done on 14 February and that it was found to be empty.  This is corroborated by one piece of contemporary documentary evidence: a telex from Tsavliris in Greece to the Master of the “Leopard” timed at 1722 hours on 14 February.  It is clear that this was sent in reply to the telex of 1547 hours, because it refers to “yr tlx dd 14.02.94 regarding soundings readings”.  The reply telex instructs the Master of the “Leopard” to try the following actions on port tanks: “remove vent head of DB Nr 3 port; fill up DB Nr 3 port…Caution: please stop ballast actions when list reaches 15 degr then report soundings on all tanks (port and strd)”.  In my view that suggests strongly that Tsvaliris had sufficient information to know that No 3 DB port was empty (or at least substantially so) and that it was necessary to fill it up to assist in reducing the list. 

82.	I also accept the evidence of Chief Officer, as set out in his contemporaneous statement that the state of the vessel’s tanks on taking soundings on 14 February was as follows: (i) the centre stabiliser tank was almost full on the starboard side, but because of the list (then 28°) it was below the ballast suction on the port side; (ii) No 4 DB was slightly slack; (iii) all the other port lower side tanks and DB tanks were full; (iv) Nos 2 and 3 port upper wing tanks were empty; (v) all the starboard side ballast tanks were full.  This state of affairs is consistent with a list of 23° when the crew abandoned ship, according to Mr Levy’s calculations, which were not challenged on this point.  

83.	Having concluded that the No 3 DB port tank was empty when the Chief Officer took soundings on 14 February, it must follow that this was the state of that tank when the vessel was abandoned.  This is because the Chief Engineer’s own account is that when he left the ballast control room he put all the ballast valves in the closed position and stopped the ballast pump.  Therefore the position on the evidence that I have accepted is that: (i) the No 3 DB tank (together with all the other DB tanks) was full at 2000 hours; (ii) between that time and the abandonment of the vessel at 0030 hours on 11 February the only person who operated the vessel’s ballast system was the Chief Engineer; (iii) he was attempting to empty (or perhaps at some stage press up) the centre stabiliser tank; (iv) the switches for that tank are adjacent to those for the No 3 DB tank port on the console; (v) at the time the vessel was abandoned the No 3 DB port had been emptied of ballast water.  I find, on a balance of probabilities, that the No 3 port DB tank was emptied as a result of the deliberate or accidental actions of the Chief Engineer. 

84.	Mr Abel’s evidence was that a deliberate action by the Chief Engineer to empty No 3 DB port would be a very dangerous thing to do.  He believed that it would be very very unlikely for an operator of the ballast console to open the valve for the No 3 DB port rather than the centre stabiliser tank.  I am prepared to accept both opinions.  But in the circumstances on board this vessel after 2100 hours, I have concluded that it cannot be assumed that the Chief Engineer was acting rationally.  In this regard I accept the Master’s evidence in his statement that the Chief Engineer wanted to fill the centre stabiliser tank at about 2200 hours; later the Chief Engineer attempted to seek advice from other ships by using the VHF to call them; and when the Master gave the order (at about 2330 hours) to prepare the boats in case it was necessary to abandon ship, the Chief Engineer jumped into a life raft before the order to abandon ship was actually given.

85.	There is no dispute that at about 2200 hours the Master obtained permission to put seawater ballast into the No 9 fuel tank.  The evidence of both the Master and the Chief Officer is that after that exercise had been organised, the Chief Officer was ordered to inspect the holds.  This was at about 2300 hours.  The Chief Officer performed a visual inspection of all the lower holds.  Nos 1, 2, 4 and 5 were reported as dry.  The Chief Officer’s evidence was that he went into the No 3 hold and saw water had accumulated at the forward end.  He could not see how the water was getting into the hold; it was not coming from the bilge well.  The Chief Officer reported this to the Master and orders were given to pump out the bilge and then the hold itself.  At the same time the Chief Officer reported that there was some water on the Ro-Ro deck.

86.	The Claimant’s technical case is that the water found in the No 3 hold had entered through an open scupper valve which was either faulty or stuck in the open position.  The Claimant says that water could get in through an open scupper valve once the vessel had assumed a list of about 10°.  Therefore the ingress of seawater into the No 3 hold was the result of the list, not an initial cause of it.  However, the Claimant submits that once water entered the No 3 hold, that would contribute to the list, albeit to a small extent only, but it would also lead to the eventual capsize of the vessel.  Mr Abel does not deal with this issue in his report.  He was asked whether he had considered it at all; he said he had but he did not elaborate on this.

87.	The Master’s statement says that he forgot to order the closure of the screw down valves on the “overside drains” from the Ro-Ro deck hatch cover gutters.  He also says that he access hatches from the Ro-Ro deck to the holds were open and he had forgotten that fact also.  This would explain the entry of seawater into both spaces as observed by the Chief Officer when he inspected the holds at about 2300 hours. 

88.	It was agreed that, given the vessel’s loads on this voyage, the vinel vents fitted to the ballast tanks and situated in the void spaces above the main deck level would become submerged on the starboard side when the vessel was at a list of about 13.6°.  It is Captain Bliault’s evidence that once this happened, water would have entered the Nos 2 and 3 starboard side upper wing tanks through those valves and that would have increased further the vessel’s list.  Captain Bliault was not challenged on that opinion in cross examination.

89.	However, Mr Abel said in evidence that he thought it unlikely that water would get into those tanks via the air vent vinel valves because he thought that would mean there was quite a considerable quantity of water on the Ro – Ro deck.  I am not sure how relevant that comment was, because the air vent pipes went horizontally overboard once they had passed the vinel valves.  They did not vent vertically through the Ro – Ro deck.  However, even if his comment is relevant, it is clear on the evidence that there was water on the starboard side of the Ro – Ro deck.  The Master reports that the observed this when he returned to the vessel on 11 February.  Therefore I find that water could have got into the Nos 2 and 3 starboard side upper wing tanks and had done so via the vinel vent pipes. 

F.	What would have been the cause of the vessel capsizing but for the salvage operations?

90.	As I have already noted, it is accepted by the Defendants that the vessel would have capsized in about 4 days, but for the intervention of the salvage teams.  I have concluded that the actions the Chief Engineer in the operation of the ballast control system during the period after 2000 hours on 10 February resulted in an increase in the list of the vessel beyond 10°.  I have specifically concluded that his actions resulted in water being pumped into the centre stabiliser tank and out of the No 3 DB tank port.  His actions were either deliberate or unintentional.  In either case it was accepted by Mr Abel that they would be negligent in the circumstances that prevailed in the evening of 10 February 1994.  I therefore next have to consider whether the actions of the Chief Engineer would have been a proximate cause of the vessel capsizing, but for the intervention of the salvage teams.

91.	It was the Defendants’ case that, as a matter of law, whatever actions caused the vessel’s list never lost their “grip” on the vessel, so that the particular cause(s) of the list would have been the proximate cause(s) of the loss of the vessel, had it occurred.  I have concluded that the actions of the Chief Engineer in operating the ballast system were the main, if not the only, cause of the list increasing to more than 10°, at which point water would enter the open scuppers valve.  I have also concluded that the actions of the Chief Engineer were negligent.  It must follow on those findings that the Claimant has proved that, but for the salvage operations, the vessel would have been lost by negligence of the Master, Officers and Crew within Clause 6.2.3 of the ITC.  Therefore the Claimant must succeed in principle in its claim under Clause 11.1 and 11.4 of the ITC.  The salvage liability was incurred in order to avoid the loss of the vessel by an insured peril, that is “negligence of Master,Officers and Crew” within Clause 6.2.3 of the ITC. 

92.	The Claimant’s “alternative” cases: As I have already noted, the Claimant had two subsidiary ways of putting its claim.  First it said that the Master had been negligent in allowing the Chief Engineer to work the ballast system because he had no knowledge or experience to do so competently.  Secondly, that in any event the Court should hold that one proximate cause of the loss of the vessel (had it capsized) would have been the incursion of seawater through the open scupper valve and that event constituted a “peril of the seas”.

93.	Master’s Negligence:	 On the first of those arguments I agree with the Defendants’ submission that any negligence of the Master in allowing the Chief Engineer to operate the ballast system could not have been causative of the loss (had it occurred) unless the Chief Engineer himself had acted negligently.  So the is argument adds nothing to the primary case. 

94.	Loss by “peril of the seas”:	The second argument raises different issues, which are both legal and factual.  On the law the position is that if, as a matter of fact, a Court finds that there are two proximate causes of a loss, then provided that one of those proximate causes falls within a peril covered by a policy of marine insurance and the other is not excluded by the policy terms, the Claimant will be entitled to recover under the policy.  However, in order to recover, the court must conclud on the facts that the cause that is covered by a policy peril constituted a proximate cause of the loss:  JJ Lloyd Instruments Ltd v Northern Star Insurance Co Ltd: The “Miss Jay Jay”.

95.	Thus, in this case, the Claimant must satisfy me that the ingress of seawater via the open scupper valve would have been a proximate cause of the loss of the vessel, but for the intervention of the salvors. 

96.	But if I was satisfied on that, then the Defendants say there is a further difficulty in the way of the Claimant.  The Defendants submit that the ingress of seawater would not have been a “peril of the seas” within Clause 6 of the ITC.  It was simply “the inevitable action of the wind and waves” rather than a fortuitous accident or casualty of the seas. Therefore, in accordance with Rule 7 for the Construction of a Policy, it cannot come within the expression “perils of the seas”.  The Defendants submit that the passage of water through a hole has never been held to be a“ peril of the seas”.

97.	Would entry of seawater into the open scupper valve have been a proximate cause of the capsizing if there had been no intervention by the salvage team?

Mr Levy performed calculations which showed that the vessel would have capsized as a result of an increase of floodwater in hold No 3.  Once the floodwater amounted to about 2500 tons, the angle of heel would have increased until the vessel capsized at 31° with 3500 tons of floodwater.  Therefore the entry of seawater into the No 3 hold via the defective scupper valve would have been necessary for the vessel to capsize.

98.	So would the entry of seawater into the No 3 hold via the open scupper valve have been a “proximate” cause of the loss, but for the intervention of the salvors?  In my view it would have been.  The effect of Mr Levy’s unchallenged expert evidence and calculations is that the entry of water into No 3 hold would have led to the capsize and without it there would have been no capsize.  As the sequence of events would have been: (i) the list, leading to (ii) the incursion of seawater via the open scupper valve into No 3 hold, leading inevitably to (iii) the capsize; and as I am satisfied that without (ii) then (iii) would not have occurred, that must make the incursion of seawater through the open scupper valve a “proximate” cause of the loss, had it occurred. 

99.	That does not mean that the list would have ceased to be a “proximate” cause of the loss.  That would only be so if the incursion of seawater had obliterated the effect of the list.  But it is clear that the effect of the list would have continued to act on the casualty, so that eh two factors would have been equally operative causes of the eventual capsize had it occurred.

100.	Was the entry of seawater a “peril of the seas”? 
	The reasons why seawater entered through an open scupper valve were: (i) it was either defective or had been accidentally left open; (ii) the vessel had developed a list of over 10°, (iii) the reason for the list was that, for whatever reason, the vessel’s ballast arrangements were not as they were intended to be; they were abnormal.  Therefore, in my view the entry of seawater was a fortuitous accident because it resulted from a state of affairs that was accidental, unintended and not inevitable.  The occurrence was not something that was inevitable when the vessel left Abidjan or even on the morning of 10 February 1994.

101.	This case is easily distinguishable from the first of the two cases relied upon by the Defendants.  In the Sassoon case the Privy Council upheld the trial judge’s finding that the sole cause of the damage to the opium cargo was the weakness of the wooden hulk in which it had been stored.  Lord Mersey, giving their Lordships’ advice, stated that, as this was the case, it would be “an abuse of language to describe this as a loss due to perils of the seas”.

102.	In the second case relied on, Mountain v Whittle, the House of Lords upheld the concurrent findings of fact of the trial judge and the Court of Appeal. They held that the unusual size of a breast wave created during the tow of the insured house boat caused water to flood into the vessel.  Because the wave was exceptional, the incursion of seawater was fortuitous and so constituted “perils of the seas”.

103.	Accordingly, I have concluded that the incursion of seawater into the No 3 hold via an open scupper valve was a fortuitous accident in the circumstances of this case.  It was a peril that was peculiar to the seas and so constituted “perils of the seas” within the terms of Clause 6.1 of the ITC.

104.	Therefore the Claimant would be entitled to succeed on its claim on the basis that the salvage liability was incurred in order to avoid the loss of the vessel by an insured peril, ie. “perils of the seas”.

G.	Quantum Issues
105.	By the end of the trial there were few remaining issues on quantum.  Thus:

(1)	The Defendants accepted that the Claimant had paid the owners of the “Seaford” the sum of US$ 34,000;

(2)	The Defendants accepted that the whole of the Salvage Award in favour of the owners of the “Happiness II”, which was agreed as a compromise between the parties, was recoverable by the Claimant;

(3)	The Defendants accepted that the amount paid to Tsavliris was recoverable by the Claimant.  However there may be some outstanding issues on interest which remain to be resolved.

106.	The only issue that was not agreed related to the costs liabilities that the Claimant incurred in the salvage proceedings and its own costs in defending those proceedings.  If those cannot be agreed then they will have to be referred to the Admiralty Registrar for assessment. 

H.	Conclusions
107.	My conclusions are as follows:

(1)	The salvage liabilities paid by the Claimant were incurred to avoid the loss of the vessel.

(2)	The salvage liabilities constitute a “loss” within the meaning of Clause 11.4 of the ITC.

(3)	If the vessel had not be salved, then she would have capsized and been lost.  There would have been two “proximate” causes of that loss of the vessel.  They would have been: (i) the increase in the vessel’s list caused by the negligent acts of the Chief Engineer in operating the switches on the ballast control console during the evening of 10 February 1994, resulting in ballast water being introduced into the centre stabiliser tank and being emptied from the No 3 port DB tank; and (ii) the fortuitous incursion of seawater into the No 3 hold via an open scupper valve after the vessel had achieved a starboard list of about 10°, which would have constituted “perils of the seas” within Clause 6.1.1 of the ITC.

(4)	Accordingly the vessel would have been lost (but for the salvage operations) by a “peril insured against” within the meaning of Clause 11.4 of the ITC.  In the context of that clause the phrase “peril insured against” refers to the perils set out in Clause 6 of the ITC.  Those include the loss of the insured vessel by (i) “Negligence of Master Officers [and] Crew…” (Clause 6.2.3); and (ii) “perils of the seas…” (Clauses 6.1.1).

(5)	In principle the Claimant is entitled to recover all the salvage liabilities claimed.

108.	I am very grateful to counsel, their solicitors and the experts for all the help they have given me in this case.