Polemis (plaintiff) owned a ship and chartered it to the defendants. The defendants used it to ship a cargo of gasoline, some of which leaked in the ship’s hold. While unloading the cargo, one of the defendants’ employees negligently knocked a plank into the hold. When the plank landed, it created a spark that caused an explosion and subsequent fire, destroying the ship. Polemis sued the defendants for the damages. A panel of arbitrators found in favor of Polemis, holding that the defendants' negligence caused the accident, and that although the explosion was not foreseeable, some damage was. The trial judge upheld the award of damages. The defendants appealed.