Angara Maritime Ltd v Oceanconnect UK Ltd and another (The "Fesco Angara")
| Jurisdiction | England & Wales |
| Judgment Date | 29 March 2010 |
| Neutral Citation | [2010] EWHC 619 (QB) |
| Docket Number | Claim No. 2009 Folio 330 |
| Court | Queen's Bench Division |
| Date | 29 March 2010 |
[2010] EWHC 619 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LONDON MERCANTILE COURT
His Honour Judge Mackie Q.C.
Claim No. 2009 Folio 330
Mr Yash Kulkarni (instructed by Thomas Cooper) appeared for the Claimant
Ms Ms Emma Hilliard (instructed by Chauncy & Co Solicitors) appeared for the Defendants
15 th and 16 th February 2010
This claim is mainly about the application of Section 25 (1) of the Sale of Goods Act 1979 when an unpaid supplier of bunkers to a time charterer claims against the owner of the vessel.
The Claimant ("Angara") is the owner of the M/V FESCO ANGARA ("the vessel"). The Defendants ("Oceanconnect") are an English company engaged in the sale and supply of bunkers for shipping and its US parent. Angara seeks a declaration of non-liability as regards bunkers to the value of $177,305.59 supplied by Oceanconnect to Angara's time charterer, Britannia Bulkers A/S ("Britannia"). Britannia has not paid for the bunkers and is now in administration. Oceanconnect counterclaims for damages for conversion in the sum of $177,305.59. This claim has been hard fought at a cost which must approach the sum in issue. On 8 March 2009 Oceanconnect arrested the Vessel in Amsterdam. An escrow agreement between Angara and Oceanconnect was entered into on 11 March and this action started on 12 March. On 13 September 2009 Oceanconnect arrested the vessel again in the Western District of Louisiana. The vessel was released on 2 October 2009 and on 6 October Mr Justice Simon granted an anti suit injunction restraining the US proceedings. Oceanconnect have obtained permission from the Court of Appeal to appeal against that decision. I refused to adjourn the trial pending the hearing of that Appeal essentially on the grounds that its subject matter was the case brought in the US not this action. However, at my request, the parties reformulated the declaration sought by Angara so that its terms did not impinge on what the Court of Appeal has to decide.
As few of the facts are disputed the only live witness to the trial was Mr Vladimir Chabrov, Head of the Fleet Department at Far Eastern Shipping Company ("Fesco") who acted as managers for the vessel on behalf of Angara.
The Defendants relied on witness statements of Jackie Gooby and Takako Shiozaki, brokers employed by Oceanconnect, and Dennis Gormley and Thomas Reilly, both Oceanconnect Directors.
Mr Chabrov gave evidence by video link from Vladivostok.
Facts agreed or not much in dispute.
By a Time Charter dated 3 July 2008 Angara let the vessel to Britannia for what was intended to be twelve months.
The only term of the charter relevant to this dispute was Clause 40 which reads as follows:-
"The Charterers on delivery, and the Owners on redelivery, shall take over and pay for all bunkers remaining on board the vessel. On delivery quantity of bunkers on board shall be abt 300/100 RME180/DMB respectively. The vessel to be redelivered with about the same quantities of bunkers, however its quantity shall be sufficient to reach major bunkering port.
Prices for bunker on delivery are to be defined as per Bunkerdesk at the port and date of the vessel's delivery (in case if said prices unavailable for the port of delivery then as per Bunkerdesk prices for the major bunkering port nearest to the port of delivery)".
On 30 September 2008 Oceanconnect entered into a contract with Britannia to sell bunkers, 170 mt of IFO and 60 mt of MGO, to be supplied by Petrobras Marine. The bunkers were delivered on 6 October and on 15 October Oceanconnect invoiced Britannia for $177,305.59. Oceanconnect paid Petrobras on 5 November 2008 but Britannia never paid Petrobras. Oceanconnect's standard terms which formed part of their contract with Britannia contained a retention of title clause. As a result Oceanconnect retained title in the bunkers.
On 29 October 2008 Mr David Znak of Britannia telephoned Mr Chabrov to say that because of financial difficulties Britannia was left with no choice other than to redeliver four vessels including the FESCO ANGARA. The conversation was confirmed later that day in an email which read as follows:—
"Good Day
Vladimir/David
Further telecon, Britannia Bulk has been informed that its financiers are not prepared to continue to support us in this current difficult market. Consequently we are not able to pay Hire, D/A's or bunkers are left with no choice other than to redeliver the following vessels to you:—
C/P DTD 30.03.07
She is on her way to the discharging port Hamburg – eta 02.11
D/A's have not been paid
Hire has been paid up to 27.10.08
C/P DTD 29.11.06
She is discharging in Yanbu and ETC is 02.11
Hire has been paid up to 29.10.08
C/P DTD 13.11.06
She is on her way to Hamburg with ETA 29.10.08
D/A for Hamburg has been paid
Hire has been paid up to 30.10.08
- Fesco Angara – C/P DTD
eta 1st Disport Belfast 30th November where d/a has been paid
eta 2nd Disport Glasgow 2nd November and d/a has not been paid.
I sincerely apologise for having to redeliver the above vessels early but unfortunately, as above we have been left with no other option.
Best regards
David Znak
Britannia Bulk"
This led in turn to a Redelivery Notice sent by the Master of the Vessel in the following terms:-
"REDELIVERY NOTICE
This is to certify that the mv "FESCO ANGARA", Marshall Islands flag, registered to port of MAJURO, has been early re-delivered by requirement her Time-Charterer's BRITANNIA BULK, PLS U.K. from charter to her owners "Angara MARITIME LTD", on the 05th November 2008, at 1740OLT/1740UTC
Upon dropping the OUTARD PILOT at the port of Glasgow, Great Britain
The redelivery charterers bunker ROB as follows:
RME180 – 295 MT
MDO – 0 MT
Please be advised preliminary debts due to owners is 197 127,25 usd
Non paid Disb.Account Glasgow attached.
Best regards,
Capt. Mogilyan
Master of m/v "Fesco Angara"
On the following day, 30 October 2008, there was an exchange within the Fleet Department of Fesco. The vessel reported that on arrival in Belfast it would have on board only 9.1 tonnes of diesel of fuel and would need to order bunkers to reach Glasgow safely and there would also be a need for IFO. Fesco responded that bunkers should be ordered "in light of the situation that the vessel is not chartered any more and she is not booked for another voyage".
Angara says that on 21 January 2009 a final hire statement was issued and sent to Britannia. A copy of a "Statement of Account between Angara and Maritime Limited and Britannia Bulk plc as of 21 January 2009" has been disclosed. That statement claims $437,305.29 being 11 days hire with some adjustments and credit is given for "bunker on redelivery" of $235,705.00. No record has been produced to confirm that that statement was submitted by FESCO to Britannia.
As several issues fell away or were agreed immediately before and during the trial it is unnecessary to refer in any detail to the material in the uncontested witness statements. However, the statement of Jackie Gooby exhibits lists showing a substantial number of occasions after September 2004 when Oceanconnect sold bunkers to Britannia for delivery to Fesco vessels. She also lists occasions when bunkers were sold by Oceanconnect to other charterers of Fesco vessels between May 2007 and October 2009. The lists are put forward to substantiate a claim that Angara and Fesco would have been aware of Oceanconnect's standard terms, in particular that for retention of title. The response of Mr Chabrov is that Angara and Fesco would not have been aware of the details of those transactions since Oceanconnect was contracting with charterers and not with owners.
The issues between the parties.
I next summarise the issues between the parties so that the relevance of the evidence of Mr Chabrov, when I refer to it, is clear.
It is now common ground that Oceanconnect's standard terms including a retention of title clause were incorporated into the Britannia contract. As a result Oceanconnect retained title in the bunkers as Britannia did not pay for them. Oceanconnect claim that Angara assumed ownership of the bunkers first when they were consumed during the time charter and secondly after it was terminated and the vessel was redelivered (or as Oceanconnect would put it "returned") by Britannia to Angara.
Angara denies that it converted the bunkers when these were consumed during the charterparty but accepts that there was a conversion after redelivery. Angara contends however that it purchased the bunkers from Britannia which it says was a "buyer in possession", in good faith and without notice of Oceanconnect's rights and that under Section 25 (1) of the Sale of Goods Act 1979 it acquired good title to the bunkers.
Section 25 (1) of the Sale of Goods Act 1979 provides as follows:-
"Where a person having bought or agreed to buy goods obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title, under any sale, pledge, or other disposition thereof, to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods, has the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner."
By Section 61 of the Act "delivery" means voluntary transfer of possession from one person to another. Section 61 (3) provides that "a thing is deemed to be done in good faith within the meaning of this Act when it is in fact done honestly, whether it is done negligently or not". "Possession" is not defined...
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