Over the course of the last several years, Gard has experienced an alarming increase in large claims arising from damage to soya beans shipped in bulk from Brazil to China. Shipowners and their Clubs have faced detentions and high demands for security resulting in Letters of Undertakings being issued in the millions of dollars. In these cases, the damage is most often caused by microbiological instability and resulting self-heating of the cargo. In our first video of a three-part series, we speak with cargo scientist, Dr. Tim Moss of Brookes Bell who explains the causes and effects of microbiological instability.
As Dr. Moss explains, soya beans, like all grain products, carry mould spores that grow under certain conditions. The safe storage time for the cargo decreases as the moisture content and the temperature of the beans at loading increases. According to the Proinde Practical Guidance, voyage times from Brazilian ports to Chinese ports range between 35 to 45 days. In contrast, voyage times to central European destinations are 14-20 days. As Dr. Moss explains, the same product that meets sale contract specifications would arrive without damage at European destinations but could well exceed safe storage times when arriving in China.
Where the cause of the damage is microbiological instability the loss should not be borne by the shipowner because the damage was inevitable and caused by an inherent property of the cargo itself. Although China is not a signatory to the Hague-Visby rules, the Chinese Maritime Code does recognize an inherent vice exception and follows the Hague-Visby principle that it is the burden of the carrier to show that he took reasonable care of the cargo. In our experience the Chinese Courts may find the burden of proof has not been met due to ventilation not being sufficiently recorded or properly performed despite expert evidence that the damage was inevitable due to microbiological instability. In contrast, English Courts and arbitration panels provided with the same or similar expert evidence, have sided with the carrier.
Our second video with Dr. Moss will focus on the causes of ship sweat, ventilation procedures and best practices for ventilation record keeping, in order to assist owners in defending claims. Our third and final video in the series will explore the commercial and legal landscape underpinning these soya bean claims.
For additional information and loss prevention advice, see our insights “An expert’s view on the carriage of soya bean cargoes from Brazil to China“ and “Heat damage in soya bean cargoes - the importance of inspections”.