On 13 March 2025, the Arbitrazh Court of the Republic of Sakha (Yakutia), Russia, considered the case between ZAO “Khatanga Commercial Sea Port” (claimant) and AO “Sakhaenergo” (respondent) related to the transportation of coal.
The claimant demanded about 150 million Roubles from the respondent (payment of freight and interest), and the respondent - on the counterclaim - 227 million Roubles - for the shortage of cargo and a penalty for late delivery of cargo.
The case also involved the insurance companies Soglasie and Rosgosstrakh and the cargo acceptance agent – AO “Energotransnab” as third parties.
Facts of the case:
In 2023, the parties entered into a comprehensive services agreement for the delivery of coal (approximately 20,000 tons). The cost of services was determined to be 317 million Roubles.
The claimant was to deliver coal at the request of the respondent.
During transportation, a coal fire was detected on the vessel, and part of the cargo was thrown overboard in order to save the vessel, cargo and crew.
The claimant delivered about 19,000 tons to the respondent. However, during unloading and accepting the coal, the respondent discovered signs of spontaneous combustion.
The respondent accepted only about 10,000 tons of coal.
The claimant's position:
Coal is a dangerous cargo. Spontaneous combustion occurred due to the natural properties of the cargo and the risks of the maritime enterprise.
The carrier took all necessary measures to preserve the cargo.
The delay in delivery of the cargo was due to the deterioration of the ice conditions and administrative restrictions along the route from the Northern Sea Route.
The respondent's position:
The claimant delayed delivery of the cargo for 47 days. In addition, the safety of the cargo was compromised, the cargo arrived at the port with signs of fire.
The delay in delivery of the cargo was due to the fault of the claimant. There were no extraordinary events along the route. The claimant should have foreseen the risks inherent in this route, which occur annually.
The court's decision:
The court concluded that there was no causal relationship between the actions of the claimant (the carrier) and the damage to the cargo. The court considered that the claimant took all possible actions to preserve the cargo, and that the claimant was not liable for the risk of coal fire.
The court determined that the claimant was entitled to full freight. The courts recovered from the respondent 150 million Roubles (freight and interest for late payment of freight).
In the counterclaim, the court satisfied the respondent's claim against the claimant to recover a penalty for late delivery of the cargo in the amount of 14.6 million Roubles. The court explained that the claimant is responsible for meeting the delivery deadlines for the cargo and that the claimant should have foreseen the difficulties inherent in this route.
The court applied paragraph 2 of Article 151 Merchant Shipping Code RF, paragraph 6 of Article 4 of the International Convention of 1924 for the Unification of Certain Rules Relating to Bills of Lading and Part 4 of Article 86 of the Inland Waterway Code RF, according to which, if cargo loaded with the knowledge and consent of the carrier, which is flammable, explosive or dangerous by its nature, becomes dangerous for the ship, other cargo or people on board, the carrier has the right, depending on the circumstances, to unload, destroy or render harmless such cargo without compensation to the shipper for losses, with the exception of general average, if it occurs. In this case, the carrier has the right to freight in an amount proportional to the distance actually traveled by the ship with such cargo.
Source: case No. A58-1321/2024
Comments:
The case interviewed experts about the causes of spontaneous combustion of coal during its transportation. The experts considered that the factors that influenced the spontaneous combustion of coal did not depend on the carrier. In addition, the court drew attention to the fact that the respondent did not take measures to prevent the fire and measures to fight the fire during the acceptance of the coal. The responsibilities of each of the parties to the maritime enterprise include measures aimed at minimizing losses.
In such cases, the outcome of the case largely depends on the position of the experts on technical issues, because the judge is guided, first of all, by their conclusions. In this regard, it is very important to pay attention to the quality selection of experts and the preparation of questions for the experts, and it is also useful to ask the court to conduct a forensic examination and not limit yourself to questioning the experts of only one of the parties.
The claimant demanded about 150 million Roubles from the respondent (payment of freight and interest), and the respondent - on the counterclaim - 227 million Roubles - for the shortage of cargo and a penalty for late delivery of cargo.
The case also involved the insurance companies Soglasie and Rosgosstrakh and the cargo acceptance agent – AO “Energotransnab” as third parties.
Facts of the case:
In 2023, the parties entered into a comprehensive services agreement for the delivery of coal (approximately 20,000 tons). The cost of services was determined to be 317 million Roubles.
The claimant was to deliver coal at the request of the respondent.
During transportation, a coal fire was detected on the vessel, and part of the cargo was thrown overboard in order to save the vessel, cargo and crew.
The claimant delivered about 19,000 tons to the respondent. However, during unloading and accepting the coal, the respondent discovered signs of spontaneous combustion.
The respondent accepted only about 10,000 tons of coal.
The claimant's position:
Coal is a dangerous cargo. Spontaneous combustion occurred due to the natural properties of the cargo and the risks of the maritime enterprise.
The carrier took all necessary measures to preserve the cargo.
The delay in delivery of the cargo was due to the deterioration of the ice conditions and administrative restrictions along the route from the Northern Sea Route.
The respondent's position:
The claimant delayed delivery of the cargo for 47 days. In addition, the safety of the cargo was compromised, the cargo arrived at the port with signs of fire.
The delay in delivery of the cargo was due to the fault of the claimant. There were no extraordinary events along the route. The claimant should have foreseen the risks inherent in this route, which occur annually.
The court's decision:
The court concluded that there was no causal relationship between the actions of the claimant (the carrier) and the damage to the cargo. The court considered that the claimant took all possible actions to preserve the cargo, and that the claimant was not liable for the risk of coal fire.
The court determined that the claimant was entitled to full freight. The courts recovered from the respondent 150 million Roubles (freight and interest for late payment of freight).
In the counterclaim, the court satisfied the respondent's claim against the claimant to recover a penalty for late delivery of the cargo in the amount of 14.6 million Roubles. The court explained that the claimant is responsible for meeting the delivery deadlines for the cargo and that the claimant should have foreseen the difficulties inherent in this route.
The court applied paragraph 2 of Article 151 Merchant Shipping Code RF, paragraph 6 of Article 4 of the International Convention of 1924 for the Unification of Certain Rules Relating to Bills of Lading and Part 4 of Article 86 of the Inland Waterway Code RF, according to which, if cargo loaded with the knowledge and consent of the carrier, which is flammable, explosive or dangerous by its nature, becomes dangerous for the ship, other cargo or people on board, the carrier has the right, depending on the circumstances, to unload, destroy or render harmless such cargo without compensation to the shipper for losses, with the exception of general average, if it occurs. In this case, the carrier has the right to freight in an amount proportional to the distance actually traveled by the ship with such cargo.
Source: case No. A58-1321/2024
Comments:
The case interviewed experts about the causes of spontaneous combustion of coal during its transportation. The experts considered that the factors that influenced the spontaneous combustion of coal did not depend on the carrier. In addition, the court drew attention to the fact that the respondent did not take measures to prevent the fire and measures to fight the fire during the acceptance of the coal. The responsibilities of each of the parties to the maritime enterprise include measures aimed at minimizing losses.
In such cases, the outcome of the case largely depends on the position of the experts on technical issues, because the judge is guided, first of all, by their conclusions. In this regard, it is very important to pay attention to the quality selection of experts and the preparation of questions for the experts, and it is also useful to ask the court to conduct a forensic examination and not limit yourself to questioning the experts of only one of the parties.