AET Inc. Ltd v Arcadia Petroleum Ltd [QBD (Comm)]
| Jurisdiction | England & Wales |
| Judge | Walker J. |
| Judgment Date | 08 October 2009 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 08 October 2009 |
Queen's Bench Division (Commercial Court).
Walker J.
Michael Ashcroft (instructed by Thomas Cooper) for the claimant.
Simon Croall QC (instructed by Clyde & Co) for the defendant.
The following cases were referred to in the judgment:
A-G of Belize v Belize Telecom LtdUNK[2009] UKPC 10.
Babanaft International Co SA v Abant Petroleum Inc (The Oltenia)UNK[1982] 1 Ll Rep 448.
Compania de Naviera Nedelka SA v Tradax Internacional SA (The Tres Flores)ELR[1974] 1 QB 264.
Galaxy Energy International Ltd v Novorossiysk Shipping Co (The Petr Schmidt)[1998] CLC 894.
Mediterranean Salvage & Towage v Seamar Trading & Commerce IncUNK[2009] EWCA Civ 531; [2009] 1 CLC 909.
Transgrain Shipping BV v Global Transporte Oceanico SA (The Mexico I)UNK[1988] 2 Ll Rep 149; [1990] 1 Ll Rep 507 (CA).
Waterfront Shipping Company Ltd v Trafigura AG (The Sabrewing)[2007] 2 CLC 763.
Shipping Demurrage Voyage charterparty Oil tanker Free pratique Shellvoy 5 form Shell Additional Clauses February 1999 Clearance clause required owners to obtain free pratique within six hours of giving notice of readiness Notice of readiness and commencement of laytime not invalid where authorities did not grant free pratique or customs clearance at anchorage or other place but cleared vessel at or before berthing In such circumstances NOR valid unless vessel at fault.
This was a claim by owners for demurrage under a voyage charterparty of an oil tanker.
The charter was based on the Shellvoy 5 form. Demurrage was stated to be: 60,000 USD PDPR. Laytime was 96 running hours. The charter included Part II of the Shellvoy 5 form as amended and Shell Additional Clauses February 1999. Under cl. 13(1)(a2) in Part II of the Shellvoy 5 form, if the vessel did not proceed immediately to berth, time began to run six hours after (i) the vessel was lying in the area where she was ordered to wait or, in the absence of any such specific order, in a usual waiting area and (ii) written notice of readiness had been tendered and (iii) the specified berth was not inaccessible.
Clause 22(1) of the Shell Additional Clauses provided that if owners failed to obtain customs clearance and/or free pratique and/or to have onboard all papers/certificates required to perform the charter, either within the six hours after notice of readiness originally tendered or when time would otherwise normally commence under the charter, then the original notice of readiness would not be valid. However, by cl. 22(5) and (6) the presentation of the notice of readiness and the commencement of laytime would not be invalid where the authorities did not grant free pratique or customs clearance at the anchorage orother place but cleared the vessel when she berthed; under those conditions the NOR would be valid unless the timely clearance of the vessel for customs or free pratique was caused by the fault of the vessel.
Notice of readiness (NOR) was tendered at the second load port, Escravos, at 1148 hours on 15 January 2007. At that stage the vessel was required to wait at anchorage since the berth was occupied. The port health authority representatives boarded the vessel at the anchorage at 0730 hours on 16 January 2007 and free pratique was granted at 0830 hours on that same day. The master protested to all relevant parties, including charterers, that free pratique had not been granted within six hours of the tender of the NOR. The vessel was required to wait at the anchorage until 19 January 2007 when the vessel berthed and commenced loading. The primary case advanced by the claimant owners was that the NOR remained effective with the consequence under the charter that laytime commenced six hours later at 1748 hours on 15 January 2007. When owners made a claim for demurrage charterers asserted that laytime did not commence at Escravos until the vessel was all fast at the berth since free pratique was not obtained within six hours as required by clause 22(1).
The issue was whether laytime commenced at Escravos six hours after the NOR tendered at 1148 hours on 15 January 2007 or, instead, only when the vessel was all fast at the berth, at 1542 hours on 19 January 2007.
The owners submitted that the effect of cl. 22 was that the original NOR was not invalidated if the vessel was cleared by the time that she berthed even though she was not cleared within six hours of the original tender of NOR, through no fault of owners. the final part of cl. 22 could not have been intended to be limited to a case in which the vessel obtained free pratique only when she berthed and to have no application to a case in which the vessel in fact obtained free pratique sooner whilst at anchorage, but still not within six hours of the original tender of NOR.
Held, giving judgment for the owners:
Clause 22 supplemented cl. II.13. The general structure of cl. II.13(1)(a) was to identify when time started to run. The general parts of cl. 22, before one came to cl. 22(5) and (6), were badly expressed. The general parts of cl. 22 were to be distinguished from (5) and (6). Those sentences were not concerned with the position generally. They were only concerned with the position where the authorities did not grant free pratique or customs clearance at the anchorage or other place but cleared the vessel when she berthed. Those words were not concerned with the general practice of the port, but with what happened in relation to the vessel in question. They clearly had in mind the special position found in cl. II.13(1)(a2) where the vessel did not proceed immediately to her berth. The reference to anchorage or other place was a reference to the location of the vessel during the six hours after giving NOR. The absence of customs clearance and free pratique at that stage would cause no loss of time if customs clearance and free pratique could be obtained on berthing or earlier. Owners were right to point out that it would be nonsensical to think that when she berths excluded clearance prior to berthing. Securing clearance prior to berthing only assisted in making sure that there would be no loss of time. The consequence was that in such a case cl. 22(6) prevented the general position under the earlier part of cl. 22 coming into play. The original NOR would be valid, subject to what would in any event otherwise be the case, that owners could not rely upon a delay caused by the fault of the vessel. The history of events in this case plainly brought the vessel within the special provision in cl. 22(5) and (6), so construed. At the expiry of the six hours identified in the second sentence of cl. II.13(1)(a) the authorities had not granted free pratique. When she berthed free pratique had been granted. Thus the NOR remained valid.
Walker J:
1. This case is about how much demurrage is payable under a voyage charterparty (the charter) of an oil tanker, the EAGLE VALENCIA (the vessel). It was an express term of the charter that it was governed by English law. The only substantive matter calling for determination by the court, at least for the time being, concerns when time started to run at the second load port, Escravos.
2. It is common ground that notice of readiness (NOR) was tendered at Escravos at 1148 hours on 15 January 2007. The primary case advanced by the claimant owners (owners) is that the notice remained effective with the consequence under the charter that laytime commenced 6 hours later at 1748 hours on 15 January 2007. Lest their primary case be wrong owners advance alternative cases that further valid NORs were tendered by email at 1539 hours on 16 January 2007 or at 1553 hours on 16 January 2007. Charterers accept that NOR was tendered at 1148 hours on 15 January 2007. They say that it was invalidated because the vessel failed to secure free pratique an official determination by port health authorities that a ship is without infectious disease or plague and that the crew is allowed to make physical contact with shore within contractual time requirements. As to the alternative cases, they say that these are time-barred under the charter, and that in any event the emails of 16 January 2007 did not constitute NORs.
3. There was no dispute as to the principles I should apply when approaching the interpretation of the charter. The principles were set out in paragraph 25 of owners' skeleton argument. Omitting assertions about application of the principles to the present case, that paragraph stated:
a. The Court should not approach the task of interpretation with too nice a concentration upon individual words. Whilst, of course, the words used are important, the language should be construed in a way that best effectuates the objective intention of the parties, with greater regard to the clear objective intention of the parties than to any particular words which they may have used to express their intent.
b. As part of the process of construction, the Court is entitled to restrict, transpose, modify, supply or reject words or terms in a document in order to give effect to the intention of the parties.
c. the Court should strive to avoid an absurd or very unreasonable commercial result, for example one which would impose upon a party a responsibility or loss that it could not reasonably be supposed he meant to assume. Particularly where a contractual provision is badly drafted, the Court should be unwilling to be driven by semantic niceties to attribute to the parties an improbable and unbusinesslike intention if the language used is capable of an interpretation which attributes to the parties an intention to make provision for contingencies on a sensible and business like basis. Commercial documents must be construed in a business fashion and there must be ascribed to the words a meaning that would make good commercial sense.
d. a provision that is solely for the benefit of [one party] and/or which seeks to...
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AET Inc. Ltd v Arcadia Petroleum Ltd (The Eagle Valencia)
...charter — Alternative claim therefore extinguished by terms of charter This was an appeal by charterers from the decision of Walker J ([2009] 2 CLC 567) upholding the owners' claim to demurrage. The charterparty was based on the Shellvoy 5 form and included the “Shell Additional Clauses — F......