Member Article

The underlying dispute relates to the MV «Cheshire»-incident in 2017, where a cargo of fertiliser was subject to a major decomposition incident. The fertiliser that was carried on the vessel was damaged, and the vessel was declared a total loss.

In February 2020, Oslo District Court ruled in favour of the cargo interests, holding the carriers  liable for the cargo loss (approx. USD 25 million) (TOSLO-2017-180657-1). The carriers have appealed the judgement.

As part of the appeal proceedings, the carriers have requested the delivery of 2000 kg fertiliser from the cargo producer to perform unilateral testing, without the presence of any representatives from the cargo-side. The Appeal Court ruled in favour of the shipowner, holding that Norwegian procedural law did not give the cargo interests any right to observe or be present during the contemplated testing of such evidence.

The cargo interests obtained leave to appeal the Appeal Court’s decision to the Norwegian Supreme Court.

Fertilisers are complex products, and the testing of fertilisers is subject to a detailed international legal framework under the UN (IMO) and the EU. The fertiliser producer therefore argued that it is necessary to closely observe any unconventional testing to have an opportunity to interpret the results of such testing.

The Supreme Court did in the decision 21 December 2020 agreed with the fertiliser producer’s appeal and overturned the Appeal Court’s decision. The Supreme Court clarified that Norwegian courts, while granting access to evidence, may be under an obligation to set conditions to safeguard both parties’ interests when granting access to evidence. In this respect, the Supreme Court recognized the cargo interests’ legitimate need for efficient contradiction by observing the contemplated tests.

The matter was thus referred back to the Appeal Court. The Supreme Court awarded the cargo interests full legal costs.

The matter was handled by Frithjof Herlofsen and Børge Alsvik.

(HR-2020-2469-A) (In Norwegian)