BILL OF LADING

BILL OF LADING CLAUSES

Both to Blame Collision Clause

The Both to Blame Collision Clause is applicable when in case of collision the liability is determined according to the American legislation.

In every country, except in the United States, the settlement of liability in case of collision whereby both ships are in fault, is determined by the degree of blame of each vessel. This is the so called proportional responsibility . If for instance, vessel A is found guilty for 20%, the shippers of the goods from vessel B will only be able to claim 20% from the owners of vessel A. The shippers of the goods on vessel A cannot claim anything from the owner of vessel A because according to the provisions in the bill of lading - even according to the American legislation - he is not responsible for faults committed in the navigation of the ship (management of the ship).

As mentioned before, the rule of proportional responsibility applies to every country except to the United States of America. Instead of determining the degree of blame of each vessel according to the fault(s) they committed, the American courts hold each vessel responsible for 50% (both equally to blame) but, they give to the shipper of the carrying vessel A the right to claim 100% of their damage from the non-carrying vessel B, notwithstanding the fact that vessel B is to blame for 50% in the collision. The non-carrying vessel B has the right to reclaim from vessel A, 50% of the compensation paid to vessel A, so that she would have to intervene indirectly for 50% of the damage on its own cargo. The Both to Blame Collision Clause allows the carrying owner to claim this 50% from his shippers.

An example should clarify the above:

Vessel A is the carrying ship Both vessels intervene for 50%

Vessel B is the non-carrying ship To be blamed for collision

Damage to cargo in vessel A: $ 10.000

Damage to ship B $ 5.000

The owners of the goods in ship A cannot demand damages to ship owner A under the provisions of the bill of lading. Under the American legislation they can claim 100%, thus $ 10.000. Ship owner B recovers half from ship owner A thus, $ 5.000 for the goods plus half of the damage to ship B, viz. 50% of $ 5.000 thus in total $ 7.500.

Therefore, ship owner A has to pay $7.500 to ship owner B, of which A can recover $ 5.000 from the owner of the goods carried in ship A, namely that part paid to ship B that relates to the goods, on condition that the "Both to Blame Collision Clause" has been inserted in the bill of lading.

The "Both to Blame Collision Clause reads as follows:

"If the vessel comes into collision with another vessel as a result of the negligence of the other vessel and any act, negligence or default of the Master, Mariner, Pilot or the servants of the Carrier in the navigation or in the management of the vessel, the Merchant will indemnify the Carrier against all loss or liability to the other or non-carrying vessel or her Owner in so far as such loss or liability represents loss of or damage to or any claim whatsoever of the owner of the said goods paid or payable by the other or non-carrying vessel or her Owner to the owner of said cargo and set-off, or recouped or recovered by the other or non-carrying vessel or her Owner as part of his claim against the carrying vessel or Carrier. The foregoing provisions shall also apply where the Owner, operator or those in charge of any vessel or vessels or objects other than, or in addition to the colliding vessels or objects are at fault in respect of a collision or contact".

Remark: In the definition of the both to blame collision clause, the term "non-carrying vessel" should have been referred to as the "third party". This would eliminate any doubt on who the "non-carrying vessel" reaaly is.
With thanks to John Potter, ACII, Chartered Insurance Practitioner, for contributing to this definition.

See also:

- AUSTWHEATBILL - Clause on back of B/L;
- CONLINEBILL - Clause 13;
- COAL-OREVOYBILL - Clause 5;
- CONGENBILL - Clause 5;
- COMBICONBILL - Clause 23;
- POLCOALBILL - Clause 21;
- MULTIDOC 95- Clause 24;
- COMBICONWAYBILL - Clause 23;
- GENWAYBILL - Clause on back of B/L;
- LINEWAYBILL - Clause 23;
- INTANKWAYBILL - Clause 5;
- CONLINEBOOKING 2000 - Clause 13;
- Etc.

Ship owners whose ships call in American harbours need to insert the "Both to Blame Collision Clause" in their bills of lading, because they have to reckon with the possibility that in case of a collision with an American ship, no matter where, the owner of the American ship can, in case of legal action, seize one of the owner's ships the minute they call at an American harbour. The place where the collision occurred is hereby of no importance. After bail has been paid, usually very high, the seizure is cancelled.

For the sake of completeness, it should be noted that on the grounds of the "Running down clause" in the hull policy, the owner cannot claim any compensation on the goods that by a "both to blame" collision must be paid if the bill of lading has no "Both to Blame Collision Clause". In the "Running Down Clause", claims relating to the goods or the obligations relating to the goods of the insured vessel are totally excluded.

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