Duty of care owed by UK ship agent to Bangladeshi worker?

17 July 2020 by

Begum v. Maran (UK) Ltd [2020] EWHC 1846 (QB)

On 30 March 2018, whilst working on the demolition of an oil tanker on the beach at Chittagong, Bangladesh, Mr Mollah fell to his death.

There is powerful evidence that essentially manual ship breaking of this sort is extremely unsafe and carries environmental risk given the asbestos and heavy metals aboard: see e.g. the work of NGO Shipbreaking Platform here. It does not take much more than a glance at the photographs to appreciate the problem. Conditions were grim; Mr Mollah was working at least 70 hours a week for long pay. Some 200,000 workers are thought to work under these conditions.

But this litigation is happening in the UK Courts. Mr Mollah’s widow did not even know the name of her Bangladeshi employer and she did not sue the owner of the “yard” there – in practice, the beach.

Her claim is against a British company which had been involved with the vessel. Explaining “involved” is itself involved, so bear with me, as this is important.

The vessel had been registered to a Liberian company, CSME, part of the Angelicoussis shipping group. CSME was itself owned by Maran TS, a Cayman company. CSME appointed MTM (a Liberian company also in the group) as an independent contractor to operate the tanker. MTM in turn appointed the defendant UK company (also in the group) to provide agency and shipbroking services.

By 2017, the vessel had reached the end of its working life. The defendant was charged to sell it on behalf of CSME (owner) and MTM (contractor). The highest bidder was a Nevis-incorporated company, Hsejar, who paid over $16m for it. The vessel steamed to Singapore, and after title had passed to Hsejar, it made its last journey to Chittagong (now known as Chattogram).

Duty of Care

As we will see, the judge, Jay J, accepted that it is arguable that the defendant (D) owed Mr Mollah (C) a duty of care in tort. The defendant sought to strike the case out, and the judge refused to do so.

The starting point was evidence that D knew that the vessel would be broken up in Bangladesh. This was inferred from the price Hsejar paid for the vessel ($404 per tonne), a good deal more than the $255 which it would have commanded had it been broken up in the only other realistic candidate, a reputable yard in China. Of the 11million tonnes broken up in 2018, only some 80,000 tonnes went to China or Turkey.

Hence, it was not too difficult to show that it was foreseeable that the vessel would end up in Bangladesh, and if so that it would be broken up in unsafe and environmentally harmful conditions, which might impact on the workforce.

But all were agreed that foreseeability of the possibility of physical harm by itself does not establish a duty of care. You also need some degree of”proximity” between claimant and defendant. All law students will know how opaque that concept is. But, as often, Lord Hoffman has made the best shot at it, in such circumstances: “There must be proximity in the sense of a measure of control over and responsibility for the potentially dangerous situation“: Sutradhar, at [38]

Before looking at that a bit more, it is plain that the judge found the case difficult to analyse in terms of traditional acts versus omissions, another strong pointer towards or away from liability. You can see why. C said that D arranged for the sale of the vessel to a buyer who was virtually bound to send it to Bangladesh. The judge said this was an act, not an omission. But things were not over by then. The buyer conveyed the vessel to Bangladesh (an act), and the employer/yard took active steps to employ C on the vessel.

C put the case two ways.

(1) There was simple Donoghue v. Stevenson liability in respect of a known source of danger (the vessel) which D was selling on knowing it was going to be taken apart in unsafe circumstances.

(2) But if the true analysis was that this was a case of damage by third parties, the exceptions to the general rule limiting liabilities in those circumstances applied.

The judge was inclined against the first submission. It was not a “snail in the ginger beer” case because there were interventions of the new owners and of the employer/yard. But he was more in favour of the second, and in particular an exception where D “is responsible for a state of danger which may be exploited by a third party”.

His central conclusion is at [61]:

In other words, the discussion is drawn back to the issue of whether the defendant could be said to have created the relevant danger rather than merely to provide the opportunity for the yard/employer to expose the deceased to the risk. My overall conclusion is that it is artificial and overly restrictive to say that the danger was created solely by the acts and omissions of the yard/employer in Bangladesh, particularly when these third parties were not acting deliberately in the sense of intending to injure the deceased. It was a danger which inhered in this end-of-life vessel once it was broken up, unless appropriate safety measures were taken.

But the judge was far from dogmatic about this conclusion. As he added at [63]

There are arguments which cut both ways as to whether considerations of fairness, justice and reasonableness, the safeguarding of the environment and exploited workers in the developing world, and commercial practice, should operate in a case such as this to guide the court in placing it either within or without the creation of danger principle, in so doing possibly slightly stretching the boundaries of established norms. In my judgment, it would not be appropriate to resolve the balance of these arguments on a summary judgment application.

He also left open the Donoghue v. Stevenson argument, on similar grounds.

Unjust enrichment

This claim was roundly dismissed by the judge. C said that D had been enriched by the receipt of an enhanced purchase price because C would be working in a deplorable environment. This was at C’s expense via the set of related transactions. The problem with this is that D (as distinct from other group companies) made no money out of the sale. The enrichment, said the judge, was made by the yard/employer.

Limitation

This involved two questions (1) did English law apply, in which case any claim would have been issued well within the limitation period? (2) if not, what was the limitation period under Bangladeshi law?

The first involved looking at Rome II (Regulation (EC) 864/2007) , and Art.4 in particular.

The judge held without difficulty that the starting point was that the law of Bangladesh applied because the damage occurred there, and that there were no other circumstances which meant that the claim was manifestly more connected with the UK. But the more promising and interesting avenue was Art.7 of Rome II, where the person seeking compensation for environmental damage or damage consequential on such damage could sue on the basis of the law of the country where the event giving rising to the damage occurred. “Environmental damage” is defined as including “adverse change in a natural resource…” The judge decided at [83] that

“The proximate cause of the accident was the deceased’s fall from a height, but on a broader, purposive approach the accident resulted from a chain of events which led to the vessel being grounded at Chattogram, in consequence of which damage was no doubt caused at very least to the beach and tidal waters. Assuming (as I have found) that the claimant has a sustainable argument that the defendant committed a relevant tort, it is far from obvious that the present case is not caught by the spirit of Article 7. Moreover, the event giving rise to the damage was for these purposes the tortious event which occurred in this jurisdiction.

This is, tentatively put by the judge, a very interesting argument, and plainly a purposive approach is applicable to a European measure such as Rome II. Its importance for the claim is that this makes arguably the claim brought within the limitation period.

At [85], the judge deferred a further argument under Art.26 Rome II that there were reasons of public policy standing against the application of the one year Bangladeshi limitation period, even if the previous arguments by C failed.

As to the second argument, the judge confirmed that Bangladeshi law contained a non-extensible one year limitation period in fatal accidents cases such as this.

So the chief limitation issue for trial is whether the environmental damage provisions of Art.7 of Rome II mean that C can sue D under English law, with the possible public policy exception also arising under Art.26.

Conclusion

There are two really interesting things about this decision, from very contrasting legal traditions.

The first is the very English common law question of trying to fit a new set of facts into some potentially rather fossilised duty of care criteria.

The second is the European purposive exercise of trying to make sense of environmental damage in the context of Rome II. It is plain as a pikestaff that the beaching and dismantling of asbestos-ridden vessels in open air without any protective measures is environmentally damaging. The issue is the relation of that to the accident which befell the late Mr Mollah.

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