Mount Isa Mines Ltd v The Ship “Thor Commander”

Mount Isa Mines Ltd initiated legal action against MarShip, the owners of the ship Thor Commander, and Thorco Brazil, the charterer of the vessel, to recover damages and other costs arising from the Thor Commander's voyage from Angamos to Townsville in July 2013. The voyage was disrupted when the ship's main engine broke down, leading to extensive repairs and additional costs for the cargo owner. The central legal issue was whether MarShip exercised due diligence in making the vessel seaworthy, as required under the amended Hague Rules. Other issues included whether the charterparty or bill of lading constituted the contract of carriage, the effect of a substitution clause on the charterparty, and the implications of Thorco Brazil's failure to preserve evidence of the damaged machinery.

The court examined the terms of the charterparty, particularly clauses 2 and 10, and concluded that MarShip, as the original owners, remained liable for the vessel's seaworthiness. The substitution clause did not result in a novation of the charterparty, and thus MarShip could not escape liability by substituting the Thor Commander for the originally agreed vessel. The court also found that Thorco Brazil's failure to preserve evidence of the damaged machinery warranted adverse inferences. Regarding the cargo owner's entitlement to claim transhipment costs, the court held that Mount Isa could recover these costs as the shipowner breached the obligation to exercise due diligence. The court further determined that Mount Isa was entitled to a declaration that it had no liability to contribute to general average expenses, and ordered MarShip to pay damages for the general average bond and other costs incurred by Mount Isa.

In summary, the court ruled in favor of Mount Isa, ordering MarShip to pay damages for the general average bond, transhipment costs, and other expenses. The court dismissed MarShip's cross-claim and ordered MarShip to pay the costs of the proceedings. The court also granted Mount Isa a declaration that it had no liability to contribute to general average expenses, providing clarity and finality to the dispute.