UK: An Unremarkable Decision?

Last Updated: 17 January 2011
Article by John Flaherty and Leon Alexander

The Court of Appeal re-examines on deck shipment case Geofizika DD v MMB International Ltd (2010).

In April 2010, the Court of Appeal granted an appeal of a decision which at first glance may appear to be of limited application to freight forwarding agents, but upon closer inspection may have a wider impact on all insurance intermediaries.

In July 2009, Greenshields Cowie (freight forwarding agents) were found liable at first instance to MMB International (the seller) who had, in turn, been found liable to Geofizika (the consignee) for the loss of two specialised Land Rover ambulances. The ambulances washed overboard in December 2006, in the Bay of Biscay, en route to a drilling exploration site in Libya. They were delivered to the vessel unpacked, unprotected and uncontainerised. Unbeknownst to all involved, the carrier had stowed the vehicles on deck, notwithstanding a booking confirmation which stated:

"ALL VEHICLES WILL BE SHIPPED WITH ON DECK OPTION this will be remarked on your original bill of lading."

Because the carrier did not state on the bill of lading that the vehicles were carried on deck, the freight forwarder believed that the vehicles had been shipped under deck and warranted such to their cargo insurers. When it was discovered that the vehicles had been shipped on deck, the cargo insurers rejected the claim.

The buyer pursued the carrier, who paid a sum in excess of eight times the Hague-Visby limit of liability, roughly equivalent to the value of the lost vehicles. However, the buyer had further losses as they did not buy replacement ambulances, but rented them locally.

The buyer brought a claim against the seller for this balance on the basis that they failed to procure effective insurance in accordance with the terms of the CIP (Carriage and Insurance Paid) sale contract. The seller, in turn, brought a claim against the freight forwarder. Referring to a text book on sale of goods, in relation to the period of insurance for a policy presented under a letter of credit, the buyer claimed that a term had to be implied into the CIP sale contract that the contracts of carriage and insurance must "match".

The buyer argued that the standard liberty clause allowing deck carriage in the terms on the reverse of the bill of lading was what was referred to on the booking confirmation as the "remark" on the bill of lading. They further argued that the contract of carriage allowed shipment on deck and, in giving a warranty that the goods would be shipped under deck, the freight forwarder acted negligently as the insurance did not match the contract of carriage.

The judge at first instance agreed with the buyer and ordered the freight forwarder to pay damages.

The freight forwarder appealed on the basis that the reference to "remarking" in the booking confirmation did not refer to the standard liberty clause in the terms and conditions on the reverse of the bill of lading, but, instead, meant that the carrier was obliged to remark the front of the bill if he was going to carry on deck. If the carrier had done so, then on deck insurance would have been arranged. The freight forwarder also argued that the giving of the warranty was irrelevant and not causative of the loss, as under an Incoterms CIP contract, the buyer is only entitled to insurance on ICC (C) terms, which does not cover goods washed overboard in any event. The freight forwarder also argued that there was no implied term that the contracts of insurance and carriage "match".

The Court of Appeal agreed with the freight forwarder. They held that the booking confirmation was part of the contract and its terms obliged the carrier to notify the freight forwarder if they were going to stow the goods on deck by remarking the front of the bill of lading. If they had done so, appropriate insurance would have been arranged. Further, the CIP insurance requirements were express and, without agreement, there was no implied obligation to "match" the insurance with the contract of carriage. The Court of Appeal did find that the freight forwarder should have checked to see if the carrier had breached, or was intending to breach its contract by stowing on deck without remarking the bill of lading. However, they also held that this failure was not causative of any loss as the insurance contracted for would never have covered the claim in any event.

This decision is of importance for two reasons. First, under the original decision, freight forwarders and those that arrange insurance for CIP/CIF sales contracts had to ensure that the contract of insurance "matched" the contract of carriage. This effectively meant that, if the cargo insurers rejected the claim for any reason other than an act of the seller/buyer, the freight forwarder or insurance intermediary would, presumably, be liable for the loss. This responsibility would be very onerous, particularly given the modest fees generally charged by freight forwarders and the Court of Appeal has removed this exposure.

Second, the Court of Appeal held that the contract was for under deck shipment, unless the carrier remarked the bill of lading and, therefore, upon receiving the unremarked bills, the freight forwarders were justified in forming the view that the goods had not been carried on deck. However, it was also held that the freight forwarder was still negligent in warranting that the goods were carried under deck without checking this with the carrier. The Court found that, as a breach of warranty entitles an insurer to be discharged from liability even if the breach is not causative of the loss, freight forwarders and insurance intermediaries must take steps to ensure warranted facts are true, even where it could only not be true if the carrier or other third party had or intended to breach its contract.

In this situation the negligence did not cause any loss, but in other situations it could and, therefore, freight forwarders and all insurance intermediaries should be warned to take all steps possible to confirm the correct position before giving any warranties to insurers.

Barlow Lyde & Gilbert LLP acted for the successful freight forwarder in the Court of Appeal.

This article was first published in Maritime Risk International, October 2010.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.