María Belén Espiñeira
ESPIÑEIRA Maritime Lawyers, Buenos Aires
mbe@espineiralawyers.com

Introduction

In recent years, Argentina’s maritime and land transport industries have faced extraordinary challenges that have significantly disrupted operations. These challenges include natural events such as the low water levels on the Paraná River, widespread strikes and lockouts led by powerful trade unions, and logistical issues stemming from armed robberies and truck hijackings. Together, these factors have created unprecedented difficulties for carriers, shippers, logistics operators, and underwriters alike.

This article explores whether such circumstances may constitute valid grounds for invoking a force majeure defence when carriers are unable to fulfil their contractual obligations. We have analysed judicial precedents, focusing on how Argentine courts interpret the force majeure defence. In doing so, we aim to highlight how jurisprudence has evolved regarding its admissibility, particularly in response to the industry’s dynamic nature and the impact of technological developments in access to real-time information and communications.

Current local phenomena in Argentina

Lower water levels on the Paraná River

The Paraná River is the second-most significant river in the Southern Hemisphere in terms of length and outflow. It plays a vital role in Argentina’s economy. Stretching for 3,400 km (approx. 2,110 miles), it reaches key river ports across five nations: Argentina, Bolivia, Brazil, Paraguay, and Uruguay. About 4,500 vessels navigate this waterway each year, making it the main route for exporting agricultural products from the region to the world.

The Paraná River has experienced historically low water levels. This has caused numerous logistical issues, including vessel groundings, changes in loading capacities, delays, and demurrage charges. In certain circumstances, local authorities have even declared this situation a force majeure event, and they have issued red alerts to navigators and the local community.

As this article will shortly examine, Argentine tribunals have analysed this phenomenon through the lens of the ‘Perils of the Sea’ defence in cases involving shipowners’ or carriers’ liability.

Strikes, stoppages, and lockouts

Labour disturbances, particularly strikes, stoppages, and lockouts organised by Argentine trade unions, have had a significant impact on contract performance within the transport industries. These disruptions often cause delays and interruptions in operations, further compounding logistical challenges. The question is whether and under what circumstances strikes and similar labour actions can be considered force majeure events. Argentine jurisprudence has addressed this issue and provided a restrictive interpretation of such defence.

Armed robberies by truck hijackers

In addition, truck hijacking and armed robbery are other major problems that affect land transport in Argentina. Traditionally, these events have been considered force majeure events or acts of violence committed by third parties, thereby relieving carriers of liability. However, recent judicial decisions have made it more difficult for carriers to invoke these defences, as courts now require them to demonstrate that they have taken preventive and deterrent measures to avoid such risks. In the following sections, we will examine specific cases illustrating the shift in the judicial criteria and its impact on the industry.

Judicial precedents

Perils of the sea defence: low water levels

One illustrative case is Fluvialco Navegación S.A. v. Transportes Fluviales Argenrío S.A.^[1] In this case, Fluvialco hired Argenrío for the towage of barges along the Paraná River. The barges were towed by the TB Argenrío I in convoy. During the voyage, the convoy was disassembled, and the barges went adrift. All the barges were recovered except one, which remained aground due to the low water levels for more than a month, resulting in delays and additional custody and release costs. As that barge was not delivered as agreed, Fluvialco sued Argenrío for breach of contract of towage. Argenrío invoked the exemption from liabilities provided for in the contract of carriage – which is applicable to the contract of towage – under Argentine law, pleading the perils of the sea defence (s 275(c), Law No. 20,094). They claimed that the event was unforeseeable and unavoidable.

The Judge of the Court of First Instance ruled in favour of Argenrío, accepting the defence. He considered that the barge could not be delivered because it went aground after part of the convoy touched the riverbed due to the low water levels. This event was deemed unforeseeable, unavoidable, and alien to the carrier, because the changes in the water level and the corresponding beaconing were carried out and notified to the shipping community by the maritime authority two weeks after the incident occurred.

However, the Court of Appeal overturned this decision, holding that, in river navigation, the perils of the sea cannot be considered unforeseeable events, in light of the publicly available information, the training and knowledge of the seamen, and the technological advancements.

The court further ruled that, for the perils of the sea defence to be admitted, the carrier must prove that the incident was unavoidable and alien to its negligence, by demonstrating that it had adopted all necessary measures to prevent and address any possible risk that may arise and could be considered foreseeable.

In this case, the Court of Appeal considered that the master was negligent during navigation because he did not perform the proper investigations before the commencement of the voyage, was not aware of the prevailing river conditions and, hence, overlooked the necessary information to adopt an appropriate manoeuvre to make the convoy of barges navigate in a safe manner and pass the area of low water level.

The court also assessed the manoeuvres adopted by other convoys in the same area, and by the tug Argenrío I a few kilometres away. The correct manoeuvre would have been to disassemble the convoy and to allow fewer barges to pass at a time.

In summary, the position adopted by Argentine tribunals in respect of the defence of perils of the sea in river navigation may the outlined as follows:

• The defence of perils of the sea does not need to meet the requirements set by the Civil Law for force majeure, and a more flexible criterion is adopted in respect of foreseeability.
• Judges have stated that, given the state of professional knowledge and training of the seamen, the sources of information, and the technology available, the perils of fluvial navigation constitute foreseeable risks.
• For the carrier to be exempted from liability under the contract of carriage due to an event of this nature, it must be demonstrated and proved that the peril was unavoidable and alien to the carrier or its servants’ fault.
• It must be conclusively established that all available preventive and safety measures to address the peril were adopted, and despite that, the incident still occurred.
• The burden of proof is harsh and falls on the carrier.
• As this defence is an exception to the carrier’s liability, its construction is strict; therefore, in case of doubt, the carrier will be held liable.

Strikes and lockouts

The judicial precedent Epson Argentina SRL c/ Cap y/o Arm y/o Prop BQ Monte Tamaro y otro s/ incumplimiento de contrato involved a carriage of four containers under one bill of lading.^[2] On their arrival in Buenos Aires, three containers were delivered, while the fourth was transhipped to another port and delivered 15 days later.

The claimant sued Hamburg Süd for breach of contract. Hamburg Süd Argentina alleged that the fourth container was not delivered because of a strike, invoking that defence under the Argentine Navigation Law No. 20,094 (s 275, para j).

The court rejected this defence, stating that the strike did not completely prevent operations, and that the carrier could have avoided the delay. The court held that, for a strike to qualify as force majeure, it must have a significant impact and duration. Minor work stoppages or delays do not suffice, and carriers are expected to take measures to minimise disruptions.

During the proceeding, it was established that the strike affected only two hours of the port operations per shift. Therefore, the Court of Appeal considered that the carrier did not demonstrate that the strike was unavoidable, because the fourth container could have been unloaded on the same day, two hours later, instead of being sent to a nearby port in a foreign country and reshipped, which resulted in it arriving 15 days later.

The Court of Appeal stated that the strike defence must be construed restrictively. Consequently, it was decided that the carrier was negligent in the fulfilment of their duties to carry, discharge and deliver the cargo in accordance with the terms of the contract of carriage, and, therefore, held them liable.

As in this case, other judicial precedents in the shipping industry have also stated that, for the defence of strike to be admitted, the strike must be of significant effect and duration, regardless of whether it is legitimate or illegitimate, general or partial. Besides, it must be alien to the carrier and their servants and agents. A simple suspension or unwillingness to work, or a decrease in rhythm of work has not been considered exemptions to liability.^[3]

Judges have also stated that, given the formal organisation of workers in unions and associations, the compulsory intervention of the state in labour disputes in general, and the existing communication between the parties involved through commissions, it is truly difficult to believe that the strike could be unforeseeable, unavoidable and unrelated to the carrier.^[4]

Armed robberies and truck hijackings

In land transport cases, armed robberies perpetrated by truck/lorry hijackers were once considered sufficient grounds for invoking force majeure. However, in recent rulings, this criterion has changed, and the courts have set stricter standards.

The liability regime for land transport is ruled by the Argentine Civil and Commercial Code, which provides that, in case of failure to deliver the goods in accordance with the contract, the carrier shall be liable, except in case of cargo inherence vice or force majeure (s 1286, CCC).

Judicial decisions currently tend to reject this type of event as a defence for non-delivery of the cargo, and predominantly, condemns carriers for breach of contract, the interpretation of this defence being very strict.

As explained in the first case about perils of the sea, Argentine judges have considered that, due to the frequency and modus operandi of this type of robbery, these incidents can no longer be considered unforeseeable. Furthermore, in light of the technological developments and currently available security measures designed to discourage the occurrence of these illicit acts, they can no longer be regarded as unavoidable. Courts now require carriers to prove they took appropriate preventive measures, such as using satellite tracking or security escorts. Failure to do so results in liability.

Consequently, for the carriers to be released from their liability for breach of the contract of carriage due to an armed robbery perpetrated against the cargo, the crux of the matter has turned to be a strict analysis of their diligence in adopting measures to prevent and discourage the occurrence of these illicit actions against that specific cargo. In other words, the dissuasive power of the measures is what really matters, rather than whether they were indeed effective.

This represents a harsh burden of proof which falls on the shoulders of the carrier. Evidence must be conclusive, leaving no room for doubt; otherwise, the fault of the carrier in the breach of their obligations shall be presumed, and they shall be held liable.

For illustrative purposes, we would like to share the following three judicial precedents.

Motores y Equipos Ortholan S.A. c/Cipriani S.R.L. s/daños y perjuicios

During these proceedings, the carrier alleged and accredited only the existence of a police report as evidence of the armed robbery of the cargo and truck. The Court stated that they failed to prove having taken dissuasive or preventive measures. Consequently, the report was insufficient to prove the force majeure as an exemption to carrier’s liability.^[5]

Generali Argentina Cia. de Seguros S.A. c/ Transporte de Titta y otro s/ faltante y/o avería de carga transp. terrestre

In this case, the carrier alleged and proved having equipped their truck with a satellite control system. However, the Court considered that such preventive measure was ineffective neither dissuasive, and decided that it was not clear whether the satellite control system aimed to protect the truck or the transported cargo. Furthermore, it was considered that the driver was negligent when getting off the truck at an unsafe area to assist another driver who was experiencing technical problems. Therefore, the carrier was held liable.^[6]

Clorindo Appo S.R.L. c/ Sancor Cooperativa de Seguros Ltda. s/ cobro de pesos

Here, the carrier alleged and proved having hired a satellite control system, maintained constant radio communication with the driver, installed a panic button system, and engaged accompanying security guards during the voyage. The Court considered that, as despite all of those measures, the robbery still occurred, the carrier was diligent by taking all the preventive measures and was therefore exempted from liability.^[7]

The case law described above shows that, in Argentina, the risk of armed robbery of cargo during its transport by land lays on carriers, who would only be able to escape from liability in very specific circumstances and at a great economic cost. In light of this situation, and in an effort to address this phenomenon, the Argentine Law on the Carriage of Goods by Land (No. 24,653) was enacted in 1996.

This law provides for a compulsory insurance which must be obtained by the shipper or the consignee and contain a carrier’s exemption of liability clause; or by the carrier, against who the insurance company cannot bring recovery actions, due to being the assured.

The purpose of this legislation is to channel the liability for consequences of those events on the insurance sector, which is the one specialized in the evaluation and assessment of the risks, counts with relevant information and statistics useful in determining which security measures should be adopted to mitigate losses, and are in a better position to make them compulsory through their incorporation as conditions of cover.

Concluding points

Based on the judicial precedents discussed, several key points may be drawn:

• The concept of force majeure is dynamic and must be evaluated on a case-by-case basis. Courts are particularly stringent in assessing whether the event was truly unavoidable. The admissibility of this defence strictly depends on the circumstances of the case.
• Technological advances and changes in the transport and communication industries have influenced the judicial criteria for determining the admissibility of the force majeure defence and have led to a more flexible approach in assessing the elements of extraordinariness and foreseeability.
• Advances in technology and access to real-time information have influenced judicial criteria, as many risks that were once considered force majeure are now regarded as foreseeable and preventable.
• Particularly, in navigation and shipping-related matters, the requirements of enforceability and unavoidability – as set down by the Civil and Commercial legislations –do not strictly apply, and the criterion may be more flexible. However, the event must necessarily be alien to the carrier’s and their servants’ fault.
• For carriers to invoke a force majeure defence successfully, they must provide substantial evidence of their diligence in taking preventive measures to avoid the risk. The burden of proof rests heavily on the carrier, and any doubt will typically result in liability.
• Prudence should prevail in the judicial criterion when interpreting the defences of a force majeure nature to avoid the risk of promoting carelessness in the fulfilment of the duties of the contracting parties.