1. Factual Background
On 11 November 2025, the Maritime and Commercial High Court rendered judgment in a dispute between a wind turbine manufacturer [V] and its cargo insurers [F] on the one side, and a contracting carrier on the other. The issue was whether the Carrier was liable for extensive fire damage to wind turbine components during discharge at Napier Port, New Zealand, on 18 December 2020. The claimants sought NZD 10,634,348.20 (approximately DKK 46.1 million), whereas the Carrier pleaded for dismissal.
Since 2012, the parties had been bound by a service contract regulating transport, storage, cargo handling and logistics. The contract obligated the Carrier to perform the services with “utmost care and diligence” and provided that the Carrier was liable for acts and omissions of subcontractors “as if [the subcontractors’] acts and omissions were its own”. At the same time, the contract contained a liability regime and a fire exception applicable during carriage by sea. The clause provided, inter alia:
“(…) the Service Provider shall also be exempted from liability for damage, loss and delay occurring while the Cargo is being carried at sea if and only if and to the extent the Service Provider proves that the damage, loss or delay was caused by (…)
(ii) fire unless caused by the actual fault or privity of the Service Provider;
(…) always provided that the Service Provider is unable to hold a subcontractor liable for such damage, loss or delay, and that the Service Provider proves either that the loss, damage or delay was not caused by unseaworthiness or that the Service Provider exercised due diligence to make the ship seaworthy before and at the beginning of the voyage.”
Thus, exemption from liability required that the Carrier could not hold a subcontractor liable for the damage. Under the service contract, Danish law applied.
2. Components, Transport and the Fire
The affected components (nacelles and rotor hubs) were manufactured in Tianjin, China for the Turitea II wind farm in New Zealand. The shipment was carried on the vessel Kota Bahagia, voyage-chartered by the Carrier from HongFa., which itself had chartered the vessel from Pacific International Lines.
During loading in Tianjin, lashing brackets were welded inside the cargo hold. During discharge in Napier, these brackets were to be cut off prior to lifting. This task was subcontracted locally to K R through the port agent.
Cutting work began on the evening of 17 December in Hold 4 and continued on 18 December in Hold 2. A fire was discovered at approximately 10:30 a.m. Twelve nacelles and eleven hubs were damaged.
Two independent investigations — Corporate Risks’ report (commissioned by the cargo insurers) and the New Zealand Transport Accident Investigation Commission (TAIC) — concluded that sparks/molten metal from the cutting work ignited wooden dunnage, after which the nacelles’ fibreglass structure caught fire. TAIC also noted that hot-work safety measures had not been fully implemented.
The claimants argued that the Carrier could not rely on the contractual fire exemption because:
- gross negligence had been committed by subcontractors during hot work;
- the vessel’s equipment and procedures were inadequate; and
- the Carrier, in their view, could have held subcontractors liable, thereby failing the precondition for exemption.
The Carrier argued, inter alia, that:
- the fire fell within the fire exception (consistent with section 276 of the Danish Maritime Act and the Hague-Visby Rules);
- there was no “actual fault or privity” attributable to the Carrier itself; and
- the Carrier could not pursue recourse against its contractual counterpart HongFa due to a Clause Paramount / Hague-Visby liability regime in the underlying contract.
3. Judgment and Reasoning
The Court found that the fire originated during the cutting operations because K R’s welding crew failed to observe basic hot-work precautions: the deck was not watered, no fire blankets were used, and no continuous fire watch was present. The fire was therefore attributable to gross negligence by the welding crew.
Under the service contract, the Carrier is generally liable for damage to cargo in its own or subcontractors’ custody. However, the contract also provides a specific exemption for fire during sea carriage, which applies unless the fire is caused by the actual fault or privity of the Service Provider. The Court interpreted this exemption in line with section 276(1)(2) of the Danish Maritime Act and Article IV, Rule 2(b) of the Hague-Visby Rules:
“The decisive question is whether the fault can be attributed to the Carrier itself (i.e., management level), not to subordinate staff or subcontractors for whom the Carrier would otherwise be vicariously liable under the general contractual rules.”
Since the Court found that the fire was not caused by any fault or neglect of the Carrier itself, but by the gross negligence of the welding crew (during discharge operations), the Carrier was not barred from invoking the fire exemption. The Court therefore rejected the claimants’ argument that the contractual identification clause implied that subcontractor negligence should be deemed the Carrier’s “own fault” for purposes of the fire exception.
Secondly, the Court held that the Carrier had demonstrated that it could not hold its subcontractor liable for the fire damage, which was a necessary condition for exemption. The Carrier had contracted with HongFa, and the parties’ recap of 31 August 2020 incorporated Gencon 94 with a Clause Paramount, subjecting recourse claims to the Hague/Hague-Visby regime, including the fire exception. According to the Court, the Carrier would therefore be unable to recover damages from HongFa.
On this basis, the Court held that the requirements for contractual exemption from liability were met, and the Carrier was acquitted. V and F were ordered to pay DKK 1 million in legal costs to the Carrier.
4. Comments on the Judgment
The judgment illustrates that a contractual identification clause — making a carrier liable for subcontractors — cannot automatically be interpreted to mean that a subcontractor’s negligence constitutes the carrier’s “own fault” where liability depends on proof of actual fault or privity by the carrier itself.
The judgment further shows that the Court accepted that the Carrier could not have successfully pursued recourse against a subcontractor because the Hague-Visby Rules were incorporated into the contract between the Carrier and the subcontractor. The recourse dispute would have been subject to arbitration. The evidentiary burden relating to whether such arbitration would likely have had a negative outcome for the Carrier was not stringent: the Court considered the existence of a Clause Paramount with a fire exception sufficient to meet this burden, even though no arbitration proceedings had actually been conducted.
