In this week’s Weekly Law Review, I’ve chosen to look at Begum v Maran (UK) Ltd [2021] EWCA Civ 326. This is a fascinating case, which demonstrates how the law of negligence may develop to reflect changes in international environmental standards, which the judge described as a ‘rapidly-developing area of law.’ 

In a judgment handed down in March, the Court of Appeal refused to strike out a claim against an English company that arranged the sale of an oil tanker, by a widow whose husband was killed while breaking up the ship in Bangladesh.

Background

Maran (UK) Ltd (‘Maran’) acted as an agent and broker in arrangements for the sale and demolition of an oil tanker which had come to the end of its useful working life. This sort of ship must be carefully dismantled and recycled, due to physical and environmental risks, and this sort of work is only carried out in a few places.

In line with industry norms, the sale was arranged with a demolition cash buyer, not directly with the shipbreakers themselves. The purchase price was over $16 million, which was reportedly at the ‘high end’ of the likely range and the vessel was sold "as is" in Singapore, with only a modest amount of fuel oil left in its tanks – we’ll consider why this is important later.

Due to the size of the ship, the only realistic option for the tanker to be broken up in safe working conditions was for it to be sent to China. However, it was instead sent to a shipbreaking yard in Chattogram, Bangladesh, to be broken up on the beach.

For reasons of cost, hardly any oil tankers are demolished in China. Instead, they are taken to Bangladesh (or India and Pakistan), ‘beached’ (driven onto mud flats) and demolished by hand by workers, working from the top of the vessel downwards.

It was accepted that the working conditions at the Chattogram shipbreaking yard are dangerous. There are no heavy cranes or dock infrastructure of any kind: no scaffolding, cradles or safety harnesses. There is no emergency medical support and few health and safety controls. The judge reported that ‘shockingly high rates of death and serious injury’ persist.

Maran had no control over the shipyard and was not party to the sale, nor any subsequent sales. However, due to the location of the ship and the small amount of oil left in the tanker, it was assumed that the defendant knew that the ship would be broken up in Bangladesh, rather than one of the safer yards in China or Turkey, where safety standards were much better, but the job to done was more expensive.

The claimant’s husband was a Bangladeshi shipyard worker, killed after he fell while breaking up the ship.

High Court

The claimant, a Bangladeshi resident and national, chose not to sue the shipyard owners but to sue the former owners of the ship, who for the purposes of the case, were deemed to be Maran.

At the High Court, Begum sought to sue under English law for negligence and unjust enrichment, and in the alternative under Bangladeshi law. Begum claimed that Maran owed a duty of care to her late husband, based on their ‘autonomous control’ of the sale of the ship and its knowledge that, because of that sale, the vessel would be broken up in Bangladesh in highly dangerous working conditions.

The defendant applied to strike out the claim on the basis that no duty of care existed, or alternatively that the claim was statute barred under Bangladeshi law, under which a one-year statutory limitation period applies.

The High Court dismissed the application, but the judge gave permission to appeal regarding the existence of a duty of care, and the Court of Appeal gave Maran permission to appeal on the time bar issue.

Court of Appeal

With regards to the duty of care, Coulson LJ said: “I consider that the duty of care alleged in this case, although faced with formidable hurdles, cannot be dismissed as fanciful…” and so it was determined that the action could proceed to a full hearing, on the basis that Maran could have insisted that the ship be sent to a yard where there were safer working practices in place. However, the court acknowledged that this was an “unusual basis of claim” and that “claims based on a duty of care, in circumstances where the damage has been caused by a third party, are currently at the forefront of the development of the law of negligence.”

On the statute of limitations point, the court said that the one-year Bangladeshi limitation period should apply, dismissing Begum’s argument that, under Rome II Article 7, the three-year English limitation period should apply. However, the court considered that the one-year limitation period may be disapplied by virtue of Rome II Article 26 – i.e. that the time limit under Bangladeshi law caused “undue hardship” and so was incompatible with public policy. This point is to be remitted back to the Queen’s Bench Division for trial as a preliminary issue.

Comment

Should the limitation issue be overcome, and the case allowed to proceed to a full hearing, it will be extremely interesting to see how the law of negligence develops.

It appears that the court had a lot of sympathy for the claimant in this case. In LJ Beans words: “… the defendant obtained the highest possible price for the vessel and sought to wash their hands of responsibility for anything, however foreseeable… it would be a poor system of justice that gave her no remedy against this defendant.”

For a third party who brokered a sale to be held responsible for the death of a worker at site over which it had no control, would be a significant development in this area of law, with far-reaching implications. We should watch this space, with interest!

© Melissa Worth 2021