The English courts are continuing to show their willingness to hold defendant corporations liable for poor supply chain practices. This post focuses on a decision issued by the Court of Appeals for England and Wales on March 20, 2021, against Maran (UK) Limited’s (“Maran”) appeal of the trial court’s decision denying Maran’s application for reverse summary judgment. Maran, a UK based company, sold a shipping vessel to a demolition cash buyer to have its shipping vessel demolished. Maran knew that the vessel would go to a shipyard in Bangladesh, where shipbreaking practices are unsafe and environmentally harmful. Generally, Bangladeshi shipbreakers have no protective equipment and inadequate demolition tools.
The Plaintiff’s husband, MD Khalil Mollah, was a shipbreaker in Bangladesh who fell to his death while working on Maran’s ship. Mollah’s wife, Hamida Begum, filed a negligence claim in England against Maran for the death of her husband, arguing that if Mollah had the proper equipment, he may have lived.
The court’s ruling allows the Plaintiff, Hamida Begum, to proceed with her negligence claim against Maran. The claim alleges that Maran owed a duty of care to the Plaintiff’s husband. By selling its vessels while knowing the working conditions would be unsafe, Maran violated that duty. While the case is far from over, this ruling will have a lasting impact on the shipbreaking industry and negligence law.
This post focuses on the appellate court’s decision issued on March 20, 2021. It begins by providing background on the shipbreaking industry. It then identifies the parties in this case and their relation to one another. Next, it examines the appellate court’s finding that Maran’s application for reverse summary judgment should be denied and that Hamida Begum may have a viable negligence claim against Maran despite Maran not owning the shipyard where Mollah died. Finally, the post concludes by discussing this case’s potential impact on negligence law.
The Shipping and Shipbreaking Industry
While large shipping vessels are meant to last for years, all vessels eventually reach the end of their working lives. These vessels must then be dismantled, a process known as shipbreaking. While there are environmentally friendly shipbreaking facilities within Europe with safe working conditions for employees, that is not true globally. According to the International Labour Organization (“ILO”), shipbreaking causes heavy pollution due to large amounts of carcinogens and toxic substances, including asbestos, contained within the vessels. These toxic chemicals both endanger shipbreaking workers and cause serious environmental harm when done on the coastline by allowing chemicals to seep into the soil and be dumped into coastal waters. Despite these dangers, 90 percent of the world’s shipbreaking occurs in Bangladesh, China, India, Pakistan, and Turkey -- because the cost of shipbreaking there is much cheaper. In many of these countries, employees work in poor safety conditions and are not supplied with personal protective equipment. These factors contribute to the shipbreaking industry having high death rates and being one of the most dangerous occupations in the world.
The Parties
In 2013, Maran agreed to act as a broker for the relevant ship in this case (the “Ship”) and twenty-eight other shipping vessels. In 2017, the Ship reached its end of life and Maran sold it to a demolition cash buyer, which acts as a middleman between Maran and the shipbreakers. In August 2017, the Ship was sold for a little over $16 million in “as is” condition. Shortly after its sale, the Ship was beached at the Zuma Enterprise Yard (“Zuma Yard”) in Chattogram, Bangladesh.
The Zuma Yard is a shipbreaking yard with no docking infrastructure. This shipyard has no “cranes, scaffolding, cradles or harnesses. There is nothing to allow for rapid emergency response, and few occupational health and safety controls or inspections.” Additionally, in some of its court filings, Maran agrees that the Zuma Yard’s beaching practices for the purposes of ship demolition are inherently dangerous.
Mollah, the plaintiff’s husband, was a shipbreaker and worked on the shipbreaking yards of Chattogram for nine years before his passing. He fell to his death while working on the Ship in the Zuma Yard. Mollah is survived by his wife Hamida Begum, who is now suing Maran for the death of her husband, alleging that Maran was negligent. She claims that Maran owed a duty of care to her late husband and by knowingly selling its vessel to be demolished in a manner that endangered the lives of the shipbreakers, including Mollah, Maran violated its duty of care.
The Court’s Ruling and the Case for Negligence in Shipbreaking
The ruling in Hamida Begum v. Maran (UK) Limited that came down on March 10, 2021 was from the appellate court, reviewing the trial court’s decision to deny Maran’s motion for reverse summary judgment. Maran’s motion requested the trial court to find against Hamida Begum. Maran argued that Hamida Begum’s claims would certainly fail against it because the loss of her husband was caused by the conduct of a third party – Zuma Yard – and not Maran’s actions.
In July 2020, the trial court denied Maran’s motion in part and granted it in part. The trial court concluded that Hamida Begum “has a real prospect of succeeding in relation to her claim in negligence; that her claim in unjust enrichment is unsustainable; that the claimant has a real prospect of establishing that her claim is governed by English law (in respect only of this being a claim for environmental damage...); and that if Bangladeshi law were to apply to the claim in tort, it would be statute-barred.”
At the appellate level, Maran’s motion was again denied. The appellate court primarily relied on two pieces of evidence when coming to its ruling: the sale price of the Ship and the amount of fuel left in the Ship’s tanks. The court believed the sale price of just over $16 million was on the higher end of the Ship’s expected value, indicating that the demolition cash buyer would not use a safe demolition yard. Additionally, since the Ship was docked in Singapore, had a low amount of fuel in its tanks, and was sold “as is,” the Ship was almost certainly going to end up in a shipyard in Bangladesh, where shipyards use unsafe demolition practices. Finally, Maran could have ensured that the Ship was sent to a shipbreaking facility with safe working conditions and environmentally safe practices, but it did not do so. All of the evidence led the appellate court to agree with the trial court’s ruling that, as a matter of law, Hamida Begum could proceed with a negligence claim against Maran.
Implications Going Forward
While the court’s ruling this March is certainly an enormous victory for Hamida Begum and human rights advocates, there is still a lot that remains unclear. Both the appellate court and trial court agree that the issue of whether the laws of Bangladesh or England apply has yet to be decided, and that decision ultimately dictates whether Hamida Begum’s claims would be time-barred. Additionally, as the appellate court recognizes, “the most fast-developing areas of the law of negligence at present concerns the scope and extent of this and other exceptions to the general rule that there is no liability in tort for harm caused by the intervention of third parties.” As this area of law is still developing, it is unclear whether Maran will be found liable.
Still, the importance of this ruling should not be understated. Litigation is costly. The court’s ruling allows for negligence claims to proceed beyond an application for reverse summary judgment against defendant corporations whose actions do not directly harm the plaintiff. If nothing else, this ruling increases the likelihood that defendant corporations in the shipbreaking industry will settle, rather than litigating through the end of a trial. Ultimately, this could lead to better working conditions for shipbreakers, some form of justice for the victims of these unethical shipbreaking practices, and analogous rulings in industries where third-party intervention is often used to avoid liability.
Sameeul Haque is a Staff Attorney at Corporate Accountability Lab.
