The Impact of CMA CGM Libra on the Allocation of Risk in a Maritime Adventure

Abstract

In this article, the author analyses the impact that the decision in the CMA CGM Libra case may have on the allocation of risk in a maritime adventure. With the adoption of the Hague Rules a century ago, a compromise was reached between the carrier’s interests and the cargo interests in relation to a carrier’s obligation to exercise due diligence to make the ship seaworthy and the defences available to the carrier, “error in navigation” being one of them. As the decision in CMA CGM Libra differs from the traditional understanding by the shipping industry of the division of responsibility under the Hague Rules and given that the decision extends the carrier’s seaworthiness obligation at the commencement of the voy-age, changing the previously understood position, the outcome of the case and the decision of the Supreme Court on this very important issue of allocation of risk between the carrier and the cargo interest were awaited with great interest by the entire shipping industry.