ED&F Man Sugar Ltd v Unicargo Transportgesellschaft mbH and Another (The Ladytramp)
| Jurisdiction | England & Wales |
| Judge | Patten,Tomlinson,Christopher Clarke L JJ. |
| Judgment Date | 19 November 2013 |
| Date | 19 November 2013 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal (Civil Division).
Patten, Tomlinson and Christopher Clarke L JJ.
Timothy Young QC (instructed by Jackson Parton) for the appellants.
Luke Parsons QC and Nevil Phillips (instructed by Waltons & Morse LLP) for the respondents.
Mark Jones (instructed by Holman Fenwick Willan LLP) for the interested party.
The following cases were referred to in the judgment:
Olbena SA v Psara Maritime Inc (The Thanassis A)UNK(unreported, 22 March 1982).
Portolana Compania Naviera Ltd v Vitol SA Inc (The Afrapearl)UNK[2003] 2 Ll Rep 671; [2004] EWCA Civ 864; [2004] 2 CLC 199; [2004] 1 WLR 311 (CA).
Reardon Smith Line Ltd v Ministry of Agriculture, Fisheries and FoodELR[1963] AC 691.
Traae and Lennard & Sons Ltd's Arbitration, ReELR[1904] 2 KB 377.
Shipping Demurrage Mechanical breakdown Delay in loading Sugar Charter Party 1999 form Conveyor-belt system linking terminal to warehouse destroyed by fire Whether delay in loading caused by mechanical breakdown at mechanical loading plant Charterparty clause requiring mechanical cause of breakdown Complete destruction of conveyor-belt system involved something more than breakdown and any breakdown not necessarily mechanical.
This was an appeal by charterers from a decision of Eder J ([2012] EWHC 2879 (Comm)) that they had failed to show that a delay in loading a vessel at Paranagua was caused by mechanical breakdown within cl. 28 of a charterparty on the Sugar Charter Party 1999 Form.
Clause 28 of the charterparty provided that in the event that whilst at or off the loading place or discharging place the loading and/or discharging of the vessel is prevented or delayed by any of the following occurrences mechanical breakdowns at mechanical loading plants time so lost shall not count as laytime or time on demurrage or detention.
A week before the vessel arrived at the loadport, the local agents advised the parties that a fire had occurred at the CBL terminal normally used by the charterers. The fire had destroyed the conveyor-belt system linking the terminal to the warehouse rendering it inoperable for at least three months. The vessel's berth was changed to the Pasa terminal which had a long waiting time.
The vessel arrived on 20 June 2010 and tendered notice of readiness. In the absence of an available berth the vessel remained off the port until 14 July 2010. On 15 July the vessel berthed at the Centrosul terminal, which was adjacent but unconnected to the CBL warehouse and was judged to provide the charterers with the fastest option to obtain replacement sugar for loading. The berth that was ultimately used was one of the three where the vessel would have berthed had the fire not taken place.
The owners claimed demurrage and the charterers relied on cl. 28 of the charterparty. The tribunal concluded that the inoperability of the conveyor belt appeared to have been the result of physical damage due to the fire rather than any mechanical breakdown. The judge upheld that decision.
Held,dismissing the appeal:
The tribunal was entitled to find that there was no mechanical breakdown of the conveyor belt system. It was possible that further investigation, not undertaken by the parties before the arbitration, might have revealed that the fire had itself been caused by mechanical breakdown, but the charterers advanced no evidence before the arbitrators with a view to establishing that that was the case. The charterers had simply failed to establish that they were entitled to invoke the protection of clause 28. The issue was one of interpretation of the clause: it was not enough that the mechanical loading plant in question simply no longer functioned, or malfunctioned, irrespective of the cause of the malfunction. The nature of the malfunction had to be mechanical. The fact that as a result of the fire the machinery no longer functioned as a conveyor belt system did not compel the conclusion that there had been a mechanical breakdown of the system. Destruction of machinery by fire did not without more amount to a mechanical breakdown for the purpose of cl. 28. The arbitrators' finding was that there was complete destruction of the conveyor belt system, which involved something more than a breakdown. If it involved a breakdown it was not without more a mechanical breakdown.
Tomlinson LJ:
1. By a charterparty on the Sugar Charter Party 1999 Form dated 9 June 2010 the Ladytramp was chartered by her disponent owners Unicargo, the respondents to this appeal, to the well-known sugar trader ED & F Man, the appellants. I will refer to these parties hereafter as simply the owners and the charterers. The charter was for the carriage of bulk sugar on a voyage from 12 safe berth(s), 1 safe port (intention Santos) but not south of Paranagua to the Black Sea (intention Odessa). A dispute has arisen as to charterers' liability for demurrage at the load port, which was in the event Paranagua, as nominated by charterers on the day of the fixture itself. Owners claimed demurrage in the sum of US$ 397,912.77 in respect of a period spent waiting to load at Paranagua. The dispute was referred to arbitration. The arbitrators, Mr John Tsatsas and Mr Christopher Moss, upheld the claim for demurrage and awarded the owners the amount claimed plus interest and costs. On an appeal brought pursuant to s. 69 of the Arbitration Act 1996, Eder J, sitting in the Commercial Court, upheld the award, albeit not on the principal ground relied upon by the arbitrators. Now there is a further appeal to this court, brought with permission of the judge himself. He was persuaded to grant permission to appeal in the light of the circumstance that the charterers face other claims for demurrage arising out of the same circumstances as gave rise to the delay to the Ladytramp.
2. Clause 28 of the charterparty provides as follows:
In the event that whilst at or off the loading place or discharging place the loading and/or discharging of the vessel is prevented or delayed by any of the following occurrences: strikes, riots, civil commotions, lock outs of men, accidents and/or breakdowns on railways, stoppages on railway and/or river and/ or canal by ice or frost, mechanical breakdowns at mechanical loading plants, government interferences, vessel being inoperative or rendered inoperative due to the terms and conditions of employment of the Officers and Crew, time so lost shall not count as laytime or time on demurrage or detention.
3. The issue in this case is whether the charterers have demonstrated, the burden being on them, that the delay in loading the vessel at Paranagua was caused by mechanical breakdown. There is no dispute that the mechanical breakdown, if there was one, was at a mechanical loading plant.
4. As is nowadays common in relation to a relatively modest claim for demurrage, the arbitration was conducted on the basis of written submissions and supporting documents without an oral hearing. The submissions on each side were prepared by experienced shipping solicitors, Waltons & Morse for the owners and Jackson Parton for the charterers.
5. At the time of the fixture the vessel was discharging at Abidjan. It was due to sail for Brazil on 10 or 11 June. The arbitrators made the...
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