Both-to-Blame Collision Clause

What it does

A both-to-blame collision clause deals with the situation where the carrying vessel and another ship are both at fault in a collision and cargo on the carrying ship is damaged. Under the carriage regime the carrier may be exempt from liability to its own cargo for navigational fault, but in some legal systems the cargo can recover in full from the other ship, which then claims a share back from the carrying ship through the collision liability division.

The clause addresses this indirect route by which the carrier could end up bearing cargo loss it was meant to be excepted from. It provides for the cargo interests to indemnify the carrying ship for any such amount passed back to it, restoring the allocation of liability that the carriage exceptions were intended to achieve and preventing the navigational-fault exception from being undone through the collision claim.

Commercial effect

The clause protects the intended balance of liability after a both-to-blame collision, ensuring the carrier is not made to bear, indirectly, cargo loss from which the carriage regime exempts it. Without the clause, in jurisdictions that allow the full recovery and recourse described, the navigational-fault exception could be hollowed out by the mechanics of how collision liability is apportioned between the two ships.

By securing an indemnity from cargo, the clause keeps the risk allocation consistent with the rest of the carriage terms. Its effectiveness can depend on the applicable law, since some systems treat such provisions differently, and it is read alongside the exceptions and paramount provisions that establish the carrier's position on navigational fault in the first place.

Owner's perspective

The owner wants the both-to-blame collision clause to prevent its navigational-fault exception from being defeated indirectly when cargo recovers from the other ship and that loss is passed back through the collision apportionment. It relies on the cargo indemnity to keep its liability position consistent with what the carriage regime provides.

The owner is conscious that the clause may not be effective in every jurisdiction, so it values it most in trades where the relevant recovery and recourse are possible. It treats the clause as protecting the integrity of the liability exceptions, ensuring that what it is excepted from directly is not imposed on it by a roundabout route after a collision.

Charterer's perspective

The charterer and cargo interests accept that the clause is intended to preserve the agreed liability allocation rather than to deprive cargo of genuine rights, since the indemnity only addresses the indirect recourse against the carrying ship. They recognise it as part of the standard carriage framework where the relevant legal mechanics apply.

The charterer ensures that its cargo insurance arrangements take account of the clause, so that the indemnity obligation is covered. It treats the both-to-blame provision as a normal feature complementing the exceptions and paramount clause, and it considers the clause's effectiveness under the applicable law when assessing its real impact.

Negotiation points

• Whether the clause is needed given the law governing the carriage and likely collision claims.
• How the cargo indemnity preserves the carrier's navigational-fault exception.
• The clause's effectiveness under the applicable legal system.
• The interaction with the exceptions and paramount provisions and with cargo insurance.

Common variations

• A standard both-to-blame collision clause with a cargo indemnity.
• A clause included for trades governed by laws permitting the relevant recourse.
• A both-to-blame provision combined with the New Jason clause in a single article.
• A clause expressly subject to the applicable carriage regime.